Chancel liability - worth insuring

[Blue Oval84]

As part of my ongoing flat purchase, it's been identified that virtually the whole of Brighton is in an "at risk" area for Chancel Liability. The risk is apparently very small, but it still exists.

Convieniently, a company is available to ride to the rescue with the form of an insurance policy that covers you against any potential liability, the policy can even be passed on to successive owners.

http://www.clsl.co.uk/contentmanagement/Page.aspx?...

Has anyone got any experience of this? I'm sure no one has ever claimed yet, my main concern is reduction in property value should a liability turn out to exist.

It seems that the buyer is in a poor position as although the church only had until October 2013 to register their interest, it won't show up on the Land Registry until a subsequent sale takes place.

From what I can gather the options are to either run a search (expensive and slow), or to buy insurance (in theory great, but will you ever get them to pay out?), or of course ignore the risk and then potentially be up the creek if it turns out there is a liability.

Have I summed it up or is there something I'm missing?

[Ray Singh]

When i bought my house in rural wiltshire, a similar liability was shown.
I just bought a one off policy for £60 which covers me for life agains the house up to about £300k.

Job done.

[Gren]

Same here. Bought the policy. Was 99% sure it was a waste of money but as a proportion of the total cost of the house move it was tiny. Peace of mind is worth a few quid when you're shelling out that kind of money

[Blue Oval84]

Cool, think I'll just buy one then, it's about £145 for a £250K policy with ongoing coverage and that passes to successive owners, not really much of an issue in a £200K+ purchase...

[Miocene]

When I bought a flat a few years back I think it cost me less than £20...

[Blue Oval84]

I guess the reason I was concerned is that there only seems to be that one company offering the cover, and they're underwritten by someone I've never heard of (albeit they're probably huge). I imagined that there would be several insurers if the cover was genuine.

I guess there is appropriate legislation in place to ensure that this is actually a kosher insurance product and not just a scam though...

[Jobbo]

Some solicitors' firms have an arrangement to get cover for a tenner. It's going to cover you for a pretty brief period anyway - between completion (when it's taken out) and registration of the title in your name a couple of weeks later, so while a tenner is neither here nor there, over £100 is mad.

Tell your solicitor to shop around for a cheaper quote, at the very least. If they need a prompt, refer them to www.conveyancinginsurance.co.uk which gives an indicative premium of £15 for cover up to £250k.

[Andy OH]

When I bought my last house, February this year, a similar liability was shown.
I bought a one off policy for around £65 which covers me for life against the house up to about £300k.

Your solicitor should be able to advise you on suitable cover.

[Rude-boy]

Speak to your solicitors and be guide by their advice.

Assuming registered title.

The answer to your question is longer than I have time to write and there is further information I would require to advise you properly which I don't have time to do today.

In short your solicitors should be asking the sellers to pony up for the cost of this is the 100% CYA answer. The reality is that if the church has not registered a Notice or any other entry in relation to such an obligation against the title to your property by the time you register your purchase as a bonafide purchaser for open market value they (church) are FUBAR'd for even more.

[Rude-boy]

Jobbo said:

Some solicitors' firms have an arrangement to get cover for a tenner. It's going to cover you for a pretty brief period anyway - between completion (when it's taken out) and registration of the title in your name a couple of weeks later, so while a tenner is neither here nor there, over £100 is mad.

Tell your solicitor to shop around for a cheaper quote, at the very least. If they need a prompt, refer them to www.conveyancinginsurance.co.uk which gives an indicative premium of £15 for cover up to £250k.

Get your OS1 in on the morning of exchange and on the usual timeframes you will have enough on the priority to get the sellers charge vacated and submit application within time. In any event you can always submit prior to eDS1 and go for early completion of the reg. if you are running out of priority. Better to know than have JIC insurance is my view.

[Vocal Minority]

As above - speak to your solicitors, but policies tend to cost absolute buttons. Make sure your solicitors find you a good one.

[Jobbo]

Rude-boy said:

Get your OS1 in on the morning of exchange and on the usual timeframes you will have enough on the priority to get the sellers charge vacated and submit application within time. In any event you can always submit prior to eDS1 and go for early completion of the reg. if you are running out of priority. Better to know than have JIC insurance is my view.

That's identical to advice I've given and I still agree with it - the problem being that PI insurers don't like the risk that the OS1 might expire. Delayed completion can cut into your priority period.

[Blue Oval84]

Jobbo said:

Rude-boy said:

Get your OS1 in on the morning of exchange and on the usual timeframes you will have enough on the priority to get the sellers charge vacated and submit application within time. In any event you can always submit prior to eDS1 and go for early completion of the reg. if you are running out of priority. Better to know than have JIC insurance is my view.

That's identical to advice I've given and I still agree with it - the problem being that PI insurers don't like the risk that the OS1 might expire. Delayed completion can cut into your priority period.

Sorry to sound numb, and I very much appreciate the advice, but could you explain what those forms are and what it means?

[Jobbo]

Blue Oval84 said:

Sorry to sound numb, and I very much appreciate the advice, but could you explain what those forms are and what it means?

Not particularly relevant to you directly, but the OS1 is the priority search which your solicitor carries out (prevents any other dealing with the property being registered before it is in your name) and a DS1 is the proof of discharge of the seller's mortgage. eDS1 is an electronic version of the discharge.

[Blue Oval84]

Jobbo said:

Not particularly relevant to you directly, but the OS1 is the priority search which your solicitor carries out (prevents any other dealing with the property being registered before it is in your name) and a DS1 is the proof of discharge of the seller's mortgage. eDS1 is an electronic version of the discharge.

Right, think I get it. Because I was told that because the property hasn't been sold since Oct 2013, we'd only see a registration by the church show up following completion. So this procedure would allow me to stop the churches interest being registered.

For reference, and in case it's relevant, the flat is one of 50 in a block built in the 70's and redeveloped in 2001. The Lang Registry documents from the sale of the land in 1929 don't seem to reference anything about it (but I suspect they wouldn't have back then) I really do think it's a low risk but would like to have a way of being sure.

[Jobbo]

Blue Oval84 said:

Right, think I get it. Because I was told that because the property hasn't been sold since Oct 2013, we'd only see a registration by the church show up following completion. So this procedure would allow me to stop the churches interest being registered.

That is absolutely right - if you carry out the OS1 search before you are committed to buy (i.e. before you exchange contracts) then nobody can register anything on the title before you. Provided your solicitor registers the transfer to you before that OS1 search expires, of course.

If you could see any reference already on the title to chancel liability:
1. You'd not be able to get insurance, and therefore
2. You'd be mad to consider proceeding.
So the lack of anything currently isn't unexpected; but what you need to cover off is the risk that something is registered on the title before you become the owner.

[XCP]

I am currently buying an old vicarage. My solicitor has told me that Chancel Liability no longer exists, or at least not on property purchased since last year.
I am a bit worried now by all this talk of insurance as we specifically asked about this and he told us categorically that no liability existed.

[Jobbo]

XCP said:

I am currently buying an old vicarage. My solicitor has told me that Chancel Liability no longer exists, or at least not on property purchased since last year.
I am a bit worried now by all this talk of insurance as we specifically asked about this and he told us categorically that no liability existed.

Sounds like you can rely on his PI insurance rather than needing to buy your own cover

[85Carrera]

Solicitor should advise you (that what's your paying him/her for) but my understanding is that the insurance is pretty cheap compared to the potential liabilities so if there's any doubt take out the insurance. If it's a significant amount, speak to the seller about sharing the cost.

[Ray Singh]

I took it out via these lot:

{url]http://www.clsl.co.uk/find-out-more/chancelcheck/[/url]

As stated before, i think its a waste of money, but you never know and it is costing so little compared to larger costs like moving, stamp duty etc....

Take it on the chin and buy the cover - its a one off payment.