Purchasing a house with a Chancel Repair Liability

SmashedAvacado

This is likely to be reportable to your lender, and i would ask your solicitor to confirm the lender's view on this

The people saying it is no big deal have not actually read your OP carefully enough. You have a situation where a church has identified liability for your property. whilst this might be insured, your solicitor should be checking the policy to ensure that it properly covers the likely value of works. In addition, the policy might only run for a period of time and after then, you may find it difficult to get another one given the knowledge you have.

This isnt a simple easy fix issue.

TN1984

Thanks all for the responses.

My mortgage lender (Santander) have made this easier for me, and pulled our mortgage offer upon hearing of the charge. As I am porting a large chunk of existing mortgage with a 5% ERC, this is pretty much end of the line for this property, unless I can get it removed.

Robin9 wrote: »

TN1984 - since the Aston Cantlow case there isn't a church in the land that will pursue chancel liability.

As a Church we registered our liability in 2013 but have no intention of implementing any claim.

Can you imagine if say an estate of 100 houses all with identified liability - how would the church pursue this if say just one said "take a running jump"?

Hope you don't mind me asking, but if you never have any intention of enforcing the liability, why bother to register? Secondly, if someone in your parish approached you and asked this exact question, and also asked, 'Would you accept a one off payment to release the property of its liability in perpetuity?', would you be open to a discussion in that regard? I am no doubt oversimplifying, but the thought that occurs to me is if it will not be enforced, surely an agreed upon one off payment is more value to the church than a charge they will never enforce anyway, and also allows the owner to get on with their life without the worry.

SIk9803

@TN1984
I am in similar situation like yours. My solicitor has found about the liability in Chancel searches and when my solicitor ask for the indemnity policy copy from seller solicitor, the request is turned down.
Not sure, if I should go ahead and but this property, even if I get some insurance covering liability, just considering this will put off some future buyers.

What you have concluded in your searches? Please share your experience.

Cheers

TN1984

SIk9803 wrote: »

@TN1984
I am in similar situation like yours. My solicitor has found about the liability in Chancel searches and when my solicitor ask for the indemnity policy copy from seller solicitor, the request is turned down.
Not sure, if I should go ahead and but this property, even if I get some insurance covering liability, just considering this will put off some future buyers.

What you have concluded in your searches? Please share your experience.

Cheers

Is it listed as a charge on the deeds for the house you are buying? This is the problem we have, the church registered the charge on the deeds in June 2013. Many churches seemingly did not register it and actively took the decision not to do so. If it is not on the deeds, I believe the risk is pretty minimal and if the property is sold post-13th October 2013, you're probably in the clear (I think). Once it is noted on the deeds, as I understand it, it becomes more difficult/expensive (and sometimes not even possible) to get the indemnity policy, which is where we are.

Any reason the other side's solicitor has turned down the request to see the indemnity policy? I guess that is their prerogative but it hardly seems likely to encourage you to proceed.

SIk9803

Thanks for your reply.
I am not sure why seller solicitor has decline to share the policy document but I have decided not to invest on this property. There are so many house in market and when you are buying a new house, why to invest with any doubt.

Thanks again and all the best with your finding.

Tx

TN1984

SmashedAvacado said:

This is likely to be reportable to your lender, and i would ask your solicitor to confirm the lender's view on this

The people saying it is no big deal have not actually read your OP carefully enough. You have a situation where a church has identified liability for your property. whilst this might be insured, your solicitor should be checking the policy to ensure that it properly covers the likely value of works. In addition, the policy might only run for a period of time and after then, you may find it difficult to get another one given the knowledge you have.

This isnt a simple easy fix issue.

Unfortunately you were absolutely right. This is certainly not a simple issue to fix. Our lender have flat out refused to lend against the property whilst the charge exists, even when presented with an indemnity policy (which incidentally was quoted at nearly £400 compared to the usual £15 to £20 where there is a possible but not confirmed liability). I have spoken to other banks that might be more flexible, however, our early repayment charge on the element we are porting breaks the overall affordability. Our only remaining option is to write to the church and hope we can somehow come to an agreement.

bouicca21

The £15-£20 indemnities are for the areas where the useless search results are overwhelmingly false positives.  OP’s case is different as there is a genuine risk.

TN1984

bouicca21 said:

The £15-£20 indemnities are for the areas where the useless search results are overwhelmingly false positives.  OP’s case is different as there is a genuine risk.

I know, I am the OP.  I just thought it was interesting to note how big a difference is makes when there is a genuine risk. Friend of mine recently had a 'possible liability' come up in a search; £15 insurance and he was home free. Sadly, that is not an option for us.

Incidentally, even at nearly £400 the insurance only covers a relatively small % of any total liability (it assumes liability is spread across the village, as there are several other properties in the area with the same registered charge), and has a fixed end date. I think to get 100% coverage when there is a genuine risk would cost thousands.

bucksbloke

If your buyer already has a policy, your solicitor will be able to get this transferred to you. 

TN1984

bucksbloke said:

If your buyer already has a policy, your solicitor will be able to get this transferred to you. 

Getting insurance is not the issue. We can get the vendor's insurance transferred to us easily enough. The problem is our lender will not lend on the property, regardless of whether or not we have insurance, as the charge is actually registered against the deeds. They would not be bothered if it had come up as a possible liability from a solicitor search, but here it is a definite liability, and they just don't want to get involved.