Chancel Repair Search

G_samy

I am in the process of buying a house. I am a first time buyer. My solicitor has informed that the current seller has provided a chancel indemnity policy which is effectively intends to act as a stop gap between the church and the property owner, should any demands from the church is received.

It is a 'No Search' Indemnity Policy. While I don't want to let this cloud my decision, but I like to understand if this could impact the value in future or deter future selling of the property. Is there anything I need to be aware of before the purchase due to the proximity to the church. I don't want to make things difficult for us should be want to sell the property in future.

Any thoughts will be much appreciated.

bouicca21

chancel repair liability, if it still exists for that particular parish, attaches to former glebe land which may or may not be near the church.  The National Archive has an online  leaflet which will tell you how to conduct a search properly.  The odds are that the parish in question appears in an index held by the National Archives which has been digitised by some enterprising company.  That index is the first stage of a proper search and the next stage identifies (a) whether there is a liablity or whether it has been extinguished and (b) if there is a liability just which bits of the parish are liable.

As an example I can tell you that when we sold my mum's house the buyer's solicitor  asked for such an indemnity policy - it took me less than half an hour to establish that the liability has been extinguished by an enclosure act in 1812. 

The only way such a search would become known would be if you asked the local diocese about their policy on pursuing  such claims. 

gm0

Policies exist (and cover what they cover and do not).

In the last 20 years there were court cases and someone did get a >100k bill - so it can happen - in certain circumstances.  Can it still.  Not for me to say with any certainty.  Lawyers do what they do.  Bill other people to nit pick argumentatively over texts.

The right to register a liability may exist and yet it may not currently be on deeds at LR (although most are by now) per upstream answer.

So while I understand the context has improved in terms of "overriding interest" conceptually. 

Both the possibility of an attempted shakedown of a freeholder (via negotiated settlement to avoid litigation costs over a legally disputable claim) when selling main building for redevelopment - and possible inadequacies of insurance both need careful consideration by someone buying a rectory or other alms house or cottage with chancel clauses or in footprint of same.

As does the buyer perception of such issues.  Some policies sold in this area are valid for a buyer for their period of ownership only.  Others pass along. Care needed about what this is and whether you need to buy one.

Pricing will be impacted by perception regardless of fact.  Matters less on the doer upper than the already done up.  Many a rectory doer upper with a big church roof next door has been left stranded for a long time before someone takes the risk to buy and pump in capital. So how long you plan to enjoy your property and what you spend on it is a factor.

Caveat emptor.  Could be fine.  But careful checking absolutely indicated.  If your lawyer is a chancel virgin - doubly so.  Ask them how many they have done.  Ask them to explicitly confirm any existing policy transfers to you.

Also get a sense of the life stage of the possible chancel building.  In use.  Barely in use.  Rotting awaiting redevelopment.  Size etc. Bounds the shape of the possible downside risk and timing as a practical matter.  A tiny village methodist chapel is a different magnitude to a bigger and listed grander example.

The indemnity policies are quite cheap.  Consider - why - low probabilities.  But my sense is that they are often structured to pay for legal batting off of spurious chancel claims - not multi-million pound replacement roofs to enormous listed buildings. You would have to sell a lot of them at a higher price to cover that off.  And there are only a few tens of thousands of such properties around. 

The general direction I think has been to extinguish these rights as properties are conveyanced for "valuable consideration" so it doesn't hang around much longer.  In such a case as a downstream 2nd/3rd/nth transfer the insurance *would* be cheap as the liability is as "gone" as it is going to get in terms of paper trail.  Until a legal mind picks holes in the legislation as it applies to the specific example.

As I recall a similar thing happens with leasehold.  The initial upstream leaseholder who signed up for 1000 years and then sold it on (lease assignment) can be pursued  *in theory* by freeholder for leasehold obligation issues later - albeit after other options with the subsequent lease assignees are exhausted.  And certain other conditions being met.  It's very very rare.  But what is theoretically legally possible and what typically happens are often different.  Lawyers do love a bit of actionable ambiguity.

Good luck.  Such properties can have excellent sites by modern standards and be super attractive in terms of character.

GDB2222

There’s an excellent Wikipedia article about this 
https://en.wikipedia.org/wiki/Chancel_repair_liability

Well worth a read, as it explains this well. Since 2013, the liability is only valid if registered on the Land Register, although the Law Society expressed doubts about whether the law is valid in this respect. 

TBagpuss

G_samy said:

I am in the process of buying a house. I am a first time buyer. My solicitor has informed that the current seller has provided a chancel indemnity policy which is effectively intends to act as a stop gap between the church and the property owner, should any demands from the church is received.

It is a 'No Search' Indemnity Policy. While I don't want to let this cloud my decision, but I like to understand if this could impact the value in future or deter future selling of the property. Is there anything I need to be aware of before the purchase due to the proximity to the church. I don't want to make things difficult for us should be want to sell the property in future.

Any thoughts will be much appreciated.

It shouldn't affect future sales. In order to bind you or a future buyer, the liability has to be registered on your land. PRe 2013 it was an overriding interest which meant it was binding even if it wasn't registered, in 2013the law changed, and now, if it is not registered (which would be visible when your conveyancer checks the deeds) then it no longer binds you because the property has changed hands for valuable consideration. 

The church could apply at a later stage to register an interest but you would be notified and have the opportunity to object. 

I think the 'no search ' element is that the insurers can refuse to pay if you trigger a claim from the church by asking about liability. 

So - speak to your conveyancer if you are worried, but you should be fine .And the policy should protect you and any future buyer in the unlikely event that the church successfully registered, and then claimed against, the property.