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?

[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...

[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...

[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?

[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.