Chancel Repair Liability - a few quick questions

YellowStarling

Evening all,

In the process of buying our first property and it is located directly opposite a church, so would more than likely be affected by CRL. I've read the insurance fees involved are relatively small, however I have a few questions that I would appreciate any assistance with before proceeding with conveyancing checks:

1. Am I right in thinking that, if the church in question had NOT registered our potential property before the deadline of 13/10/2013, then the act of us buying the property now (i.e. post-deadline) rules us invalid for CR liabilities? FYI, the last exchange of the property was pre-deadline in 2009.

2. If so, is there a free way to check if/when the property was registered by the church (we have asked the estate agents and vendors and neither know/can recall) rather than pay for the CRL checks as part of our conveyancing?

3. If not, in your experiences, is the CRL check usually performed as an additional check and that, if we were provided with a breakdown of the costs for the separate conveyancing checks, actually decline the CRL check in favour of insuring against an unknown liability if it proved cheaper (I've read the premium can be a one-off payment of circa £30 for 30 years indemnity?)


Thanks in advance!

fed_up_and_stressed

No if the property did not have liabilities logged by the PCC by 13/10/14 then they only have until the property is next sold to do it. So in theory they could still register their interest up to the day of completion when you buy the property.

I am in the same boat on a property i am buying in addition to my main home. The chancel repair liability report flagged that the property was within the parishes historical tithe area based on parish boundary data and the relevant Inland Revenue Indices held by the National Archives.


I am taking out the insurance as the last thing I want is post exchange (when i am contractually obligated to purchase the property) to then find the PCC have slapped the liabilities on. I'd rather pay a few quid for the insurance and have piece of mind than risk up with a legal bill of thousands like the Wallbanks did in the infamous chancel repair liability case.

Any prior liability logged by the PCC will be on the existing land registry information ... Do not approach your local Pariochial Council as this will alert them there is a potential liability for the property. Get your conveyancer to check existing land registry info ..then pay for the insurance or you can take your chances the PCC don't register their interest before you complete.

Most conveyancers will do potential chancel serach liability searches as a matter of their usual searches for you.

YellowStarling

Thanks for your reply, I understand your point and agree that it is a relatively small price to pay for piece of mind.

Out of interest, how do you take out the insurance? Is it part of the buildings insurance package taken out when buying the property or can it be a standalone premium we could shop around for a good deal on?

If it's the latter, I'm thinking I could find a premium now and earmark buying that at completion rather than paying a solicitor to check for liability and tell me:

1. No, it's not registered but it may be in the next few weeks so I would recommend taking a policy out at completion

2. Yes, it is registered and therefore I would recommend taking out a policy at completion

The above, of course, assumes that the CRL check costs an additional amount to the usual council searches, etc. that conveyancing firms do. If not, then this is post may be ignored but I'd like to know if that's the case in your experiences!

Btw, best of luck with your additional home purchase.

YellowStarling

fed_up_and_stressed wrote: »

Most conveyancers will do potential chancel search liability searches as a matter of their usual searches for you.

Didn't see this as I was writing my response - thanks a lot (and yes, good heads up on not approaching the parish!)

fed_up_and_stressed

My responses are in red ....

YellowStarling wrote: »

Thanks for your reply, I understand your point and agree that it is a relatively small price to pay for piece of mind.

Out of interest, how do you take out the insurance? Is it part of the buildings insurance package taken out when buying the property or can it be a standalone premium we could shop around for a good deal on? no its seperate to your buildings insurance and yes you can shop around -however i am not bothering as my solicitor has recommended a reasonable rate for their preferred supplier which i am happy with- cheaper than one's ive found via google.

If it's the latter, I'm thinking I could find a premium now and earmark buying that at completion rather than paying a solicitor to check for liability and tell me:

1. No, it's not registered but it may be in the next few weeks so I would recommend taking a policy out at completion

2. Yes, it is registered and therefore I would recommend taking out a policy at completion. they wouldn't advise this this - if the PCC has already registered liability with land registry then you would not be eligible under most chancel liability insurance policies as they cover for unfoceable costs however if you haven't got your conveyancer to check through a chancel search in advance or even worse the PCC has already registered a liability then you may find your insurance wouldn't pay out as you haven't taken "reasonable" steps to mitigate liability .

At point of completion where no Liability has been registered is when you are "off the hook" under the new laws... The time you NEED in my opinion the insurance is the period between exchange and contract - because prior to exchange its the current vendors responsibility and harsh I know you could walk away from the deal. Post completion - if the PCC haven't registered their interest - tough too late they are outta luck under the recent law change for circumstances such as ours.

The danger time and why I'm taking out the insurance is for the period exchange to completion - where if the PCC registers liability in this time, you are legally obligated to purchase the property and the liability would remain even once completed with you (because the liability was registered BEFORE the sale was completed if that makes sense

The above, of course, assumes that the CRL check costs an additional amount to the usual council searches, etc. that conveyancing firms do. If not, then this is post may be ignored but I'd like to know if that's the case in your experiences! the cost of this was included in my standard search bundle as is it is classed as "usual and required search for conveyancers to comply with their obligations under the council of mortgage lenders handbook

Btw, best of luck with your additional home purchase.

and good luck to you fingers crossed our respective purchases go smoothly !!

YellowStarling

Thanks man, those responses and advice were spot on.

YellowStarling

fed_up_and_stressed wrote: »

The time you NEED in my opinion the insurance is the period between exchange and contract - because prior to exchange its the current vendors responsibility and harsh I know you could walk away from the deal. Post completion - if the PCC haven't registered their interest - tough too late they are outta luck under the recent law change for circumstances such as ours.

The danger time and why I'm taking out the insurance is for the period exchange to completion - where if the PCC registers liability in this time, you are legally obligated to purchase the property and the liability would remain even once completed with you (because the liability was registered BEFORE the sale was completed if that makes sense

Have had a further look into this and it looks as though most policies would only take effect from the completion date, not the exchange date, so you may not be able to carry out the above plan (or at least, not utilise the insurance as intended in the extremely unlucky event you'd need a payout).

One method you could adopt is to request a priority search on the Land Registry through conveyancing, which (I believe, but may be slightly inaccurate) would 'freeze' the deeds so that no new amendments could be made (i.e. your local PCC registering an interest in your property) whilst your purchase went through, after which the PPC would be free to register an interest, but of course you would be exempt from liability.

Either way, I cannot see this insurance being at all worthwhile/usable for buyers of properties being sold after 13 October 2013 as:

1. If the interest was already registered before the sale goes through, you may struggle to acquire insurance against the risk of claim rather than against the risk of liability, unless you inherit a 'successor' CRL policy from your seller that they purchased before the interest was registered by the PPC

2. If the interest has not yet been registered, then your purchase post-13/10/13 rules you exempt from liability. There is no use in attempting to insure the period between exchange and completion, as the policy would not actually take effect until completion

I can only see the insurance being useful for existing owners of properties bought before 13/10/13 that have not been registered by a PPC.

But to be honest, my brain is frazzled by all of it!