Chancel liability insurance

BB.

Hi there,


I would be very grateful for your advice on this...


I am in the process of buying a house and my solicitor told me that the search result show "potential chancel repair liability" and offered me insurance at £29 with Aviva.


I read about this and I am happy to pay for the insurance rather than spend my time researching but what I am not happy about is my solicitor wanting to charge me £45 + VAT to arrange it!


So I went on Aviva's web for a quick quote and they've quoted me £63. I wonder where the difference comes from and if anyone can recommend an alternative insurance company?


I would still rather pay £63 directly to Aviva that £45 + VAT to my Solicitors who appear to be particularly greedy not just on this occasion.


My solicitor also says that the policy "must be taken out to satisfy the lender's requirements" - which is Virgin Money which also rings a bit untrue.


Many Thanks!
BB

da_rule

It is completely legitimate to say that the lender insists on the insurance, and yes they will have their own criteria. At the end of the day the lender will only lend if the title is good and marketable. If there is a potential liability there are two options; investigate it fully and present the findings to ensure the lender is satisfied, or just insure against the potential risk/costs.

Whilst I have no doubt you could provide your own insurance you have to remember that your solicitor is also acting on behalf of the lender. He therefore has to be satisfied that the policy protects not just you but also the lender. If you supply your own, he will want to see all of the documents as he will have to supply them to the lender. He will have to check that the cover is up to the required level and does not contain any unusual terms which could stop the policy paying out. And guess what, he'll charge you for reading all of the terms and conditions, and if you've ever seen the terms for an insurance product you'll know that they can run to many pages (my last car insurance one was presented like a book).

Whereas, the one he is offering will comply with all the requirements. And if it doesn't, then he has indemnity insurance that you can claim against.

Hoploz

I don't understand why, assuming the policy is indeed the same, you'd rather pay the insurance company more. Your solicitor is quite reasonably charging for their time spent arranging the policy and checking it over. Standard solicitor's fee is approx £200 per hour, so charging the amount you state seems ok to me. It is additional to standard conveyancing so therefore it's an extra.

And yes, it will be the lender who requires this to protect their interests as well as yours.

BB.

Thanks for this da_rule.


Is that what always happen then? Do all solicitors charge for this? What if I go directly to the company that did the search and also offered to provide this insurance and ask if they can provide the same insurance directly to me?


My solicitor also wanted to charge an additional fee of £150 + VAT for acting on lender's behalf once they got my mortgage offer even thou they already quoted me £99 + VAT for the same service and my mortgage offer stated that £150 is an estimate and inclusive of VAT. Hence why I am not very trusting of them... I challenged it and in vague terms they said that £150 will be inclusive of VAT but not sure whether this will be in addition to £99 already quoted or not. Time will show...

da_rule

Anything that takes the solicitor time will be charged for. Even on a fixed fee, some unusual things, such as this, can be charged for as an extra.

The insurance needs to protect your lender as well as you as they have an interest in the property, and could potentially be liable for paying the chancel liability in certain circumstances. The lender needs to see this (or have their solicitor declare to them that the level of insurance is adequate). The lender will only accept this from their solicitor (who is also your solicitor).

Also, and I really don't want this to sound rude, but buying a property is probably one of the largest and most complex transactions you'll be part of in your life. You are quibbling over essentially £100. For that money, you'll get an insurance policy that does what it needs to do (and be insured by the solicitor if it doesn't) and a satisfied lender that will release the funds for you. One of the last stages of the transaction is the solicitor asking for the lender to release the funds. In doing this, they have to state that everything is in order and they will not do this if they are not completely sure it is as they could lose their practising certificate and therefore their job/business/livelihood.

BB.

Hi Hoploz,


I don't believe the charge is reasonable. I am already paying them a lot for the services they are kindly providing me with. And anyway it wont be the solicitors themselves arranging it but their assistants.


I asked my friends and none of them were charged for this.


£63 is still £20 cheaper than what the solicitor wants to charge me (£29 +(£45+VAT).


Also, I currently live 50 meters away from the property I am buying and when I bought the current one in 2011 the Chancel Liability issue was never highlighted to me. Although this might be due to the omission on behalf of my previous solicitor.

G_M

and to suggest an explanation for the difference in Aviva's 2 quotes, your solicitor will likely receive a discount as he regularly puts business their way.

Just as a retailer pays a lower per unit amount to a manufacturer for buying 100 widgets than a consumer pays for 1 widget.

BB.

I appreciate what you are saying da_rule, I really do but as long as get my insurance sorted and... save myself some money on the way, what is the issue? What is wrong with being savvy and trying to look after my pennies? After all this is the money saving expert forum, no?

G_M

BB. wrote: »

Hi Hoploz,

I don't believe the charge is reasonable. I am already paying them a lot for the services they are kindly providing me with. And anyway it wont be the solicitors themselves arranging it but their assistants.

I asked my friends and none of them were charged for this.

£63 is still £20 cheaper than what the solicitor wants to charge me (£29 +(£45+VAT).

Also, I currently live 50 meters away from the property I am buying and when I bought the current one in 2011 the Chancel Liability issue was never highlighted to me. Although this might be due to the omission on behalf of my previous solicitor.

You are already paying for standard conveyancing. If extra work arises during the process which was not initially known about, it's reasonable for a charge to be added.

Yes, it could be anticipated that this work might be required, but you would not want every initial quote to take it into account since in many (most?) cases it will not be required. That too would doubtless annoy!

But yes, not all conveyancers will charge for this. It will doubtless also depend to some extent on their initial quote - if it was a bottom of the market quote (internet conveyancing warehouse?) with a small profit margin, designed to attract customers by being the lowest quote, then typically they will add all sorts of extras on .......

As for the comparison with your current property:
* even a small geographic difference could make a difference
* different mortgage lenders will have different attitudes to risk (eg chancel risk)
* time has passed and awareness of the risk has become greater, and generalattitudes have changed

eddddy

TBH, even if you arranged your own policy, your solicitor would probably charge you a fee for checking it to make sure it meets the lender's requirements.


Out of interest, how did you find your solicitor?

da_rule

Because you're not just getting insurance to protect yourself but also the lender.

The solicitor has to act in best interest of the lender, therefore if you supply your own policy they have to check it (and guess who's picking up that bill).

Also, do you know exactly what type of cover your lender is willing to accept? Do you know exactly what lender details (as in company name/address etc) need to be noted on the policy? Your solicitor does.