Is the death knell due to sound for chancel repair liability insurance?
Much has been written about the requirement for churches to register land affected by chancel repair liability before this October's deadline, but from an insurance perspective, what effect will these changes have?
Under the Land Registration Act 2002, the Church of England has until midnight on 12th October 2013 to register all chancel repair liabilities against affected properties, to ensure it can claim for contributions towards repairs from future owners.
After the deadline, registered property titles obtained via the Land Registry will be clear about the existence of a liability. The good news for buyers purchasing a property after this date, is that if it has a registered title which has no entry relating to chancel repair, they will be free of any future liability, and therefore have no need for insurance.
However, if a liability has been registered before the deadline, the liability will be enforceable against any owners of that property, indefinitely. Existing owners will remain liable where a liability is already present, regardless of registration, because it remains an overriding interest affecting the property's title.
Chancel repair insurance is something that solicitors and conveyancers have been arranging for their clients for years. Typically, in recent times, cover has been provided after a chancel screening search has revealed a 'potential liability' due to the property's location in relation to historical parish boundaries. But after October, when specific liabilities will be revealed to a buyer, will insurance be harder to obtain, or even disappear completely?
"Definitely not", says Countrywide's Underwriting Development Manager, Kevin Richardson. As he explains: "The changes later this year mean we are likely to come back 'full circle' to where we were a few years ago, and underwrite any risks where a specific liability has been highlighted in the property's title, or from a search of the Record of Ascertainment.
"This might mean that the price of this insurance increases slightly, but we will take into consideration a number of factors that may impact on the premium; such as the extent of liability which attaches to the property, how many others are affected, whether the church has made any demand for payment in the past, and whether any repair appeal fund is currently outstanding. We may also take into account who needs cover and if they wish to restrict cover for a specified period."
We'll be keeping a watching brief on the situation as the deadline approaches, and adjusting our policies in readiness. Whatever happens between now and October, we will keep you informed. If you have any questions in the meantime, feel free to give us a call on 01603 617617, or email email@example.com.