Chancel liability insurance(12 Posts)
Anyone been through this? The house we're buying has a chancel liability attached - how much of a panic should I be in?
None at all. It will cost a small amount to buy cover for it. Am sure it's a rip off but in the scheme of a house purchase it's nothing!
get your solicitor to shop around for the insurance. The Co that does the chancel searches offers insurance as well but you can get much cheaper. Also I don't know your timescales but if the parish hasn't registered a chancel interest on the property via land registry by this Oct they have lost the chance to ever claim from the property owner.
The chancel insurance thing is a scam, all because of one very well known case a few years ago where one property owner got stung by a church for the entire chancel repair. Most people will have no idea they have a potential liability as these searches were only required by the Law Society in the last few years.
Unfortunately our timescales didn't permit us to wait until Oct but our insurance went from being £137 to £35 by asking our solicitor to shop around. If we didn't have a mortgage I wouldn't have bothered but the lender insisted.
Who has told you it has a liability? If it's not stated in the deeds then it's quite likely that it doesn't have a liability. As Prawntoast says, the company who do the searches also sell the liability insurance... a major conflict of interests that should sound huge alarm bells.
If its not in the title deeds from October this year it's won't have a liability but there are many areas of the country where there are potential liabilities, where the parishes haven't yet registered them. It's a mine field of old law that goes back prior to the reformation. If you have a church in your area that predates this, it could well be that there is a potential liability.
I did a fair bit of research on this when our search came back as I was bloody annoyed that although I am not a member of any religious organisation I would be expected to cough up if the chancel roof started leaking ( an interesting point, it's only the chancel of a church that can be caught under this law not any other part).
Unfortunately once a chancel search reveals even a potential liability most lenders will insist on the insurance as a condition of the mortgage.
We can't wait till this October - and it's true, the report says there's a "potential" liability due to location within parish boundaries, rather than a guaranteed liability - and even that only comes into play should the roof need repair etc etc.
Our solicitor's recommending we take out insurance to cover future owners, in order to avoid problems reselling. Price around £130. Of course the current vendors have denied any knowledge of a liability and turned down our request to pay for the insurance.
Thank you all for the advice re shopping around as I'd rather pay much less than £130 which is less than the cost of the more indepth search recommended by the report providers (you're right, they're also the source of the insurance quote).
For those who shopped around - can you remember where you got the cheaper policy from?
Hi Just, the company was called Legal & Contingency. Our quote was £37.50 for initial cover of £480,000 and this cover increases by 5% per annum until it has doubled. It's transferrable to future purchasers.
Thanks for clarifying that toomuch, the whole is a minefield!
It's a complete money making scam rather than a minefield. The liability will be spread among all the houses in the area and calculated to an ancient formula meaning that in the vanishingly unlikely event that the church decides to make itself very unpopular by claiming, the amount you'd be liable for would be very small. I did the research when we bought our house and opted to save my cash by not even doing the search.
I should caveat that by saying, if there is a liability stated in the deeds then it's a different matter. The case the scam artists refer to is one where there was a liability in the deeds that the couple chose to try and fight... they lost and it cost them a lot of money, much of it being legal costs.
I don't think a church will worry about being unpopular.
Under the Charities Act, the PCC, as trustees, have an obligation to exercise their rights under Chancel Liability. If they don't, they are likely to lose out on bona fide insurance claims, grants and other benefits.
Believe me, it's as bewildering to PCCs as much as anyone, but can't be ignored.
BTW, a chancel is a very small part of a church. You would not be expected to put a new roof on a church. It's a part that is meant to only be used by clergy so not really likely to come to much harm.
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