Chancel Indemnity insurance – What is the risk and do you still need it?

What is chancel repair liability?

Chancel repair liability is a legal obligation on some property owners in England and Wales to pay for repairs to the local parish church.

The historic right to impose these charges goes back hundreds of years and was often thought it was unlikely a church could force property owners to pay repair costs. However, that train of thought was challenged by The Wallbank case which, in 2003, found in favour of the Church Council who won the right to impose a £100,000 charge on a homeowner.

What changed in 2013?

In 2012, the government reviewed chancel repair liability and whilst they decided against abolishing it completely did introduce some changes intended to make it easier to identify affected properties.

Previously, there was no need for churches to protect the right to claim for chancel repairs, the very existence of the right was sufficient to enable them to make a claim. But the new changes meant that chancel repair liability (along with may other overriding interests) had to be registered by 13 October 2013. Several churches therefore applied to the Land Registry to place a notice onto affected registered titles. These notices ensure that churches do not lose their tight to make a chancel repair claim at a later date.

However, if the church did not register a notice by October 2013, that does not mean they have lost their right to apply for registration. The right would only be lost once a property with registered titles changes hands for “valuable consideration.”

Do my clients still need Chancel Indemnity insurance?

Yes. Conveyancing solicitors need to continue to recommend chancel repair liability searches and indemnity insurance on properties that are currently unregistered or that have not been transferred for valuable consideration since 13 October 2013.

A church could still register a notice at any point up until a priority search is made just before completion. If this happens, it will jeopardise the completion of the transaction and incur unrecoverable costs for the buyer such as legal and survey fees.

How to purchase Chancel Indemnity insurance

Chancel Indemnity insurance is a one-off payment and covers the named buyers for the duration of their ownership of the property. The policy should be purchased from a specialist provider and can be purchased alone or in conjunction with other Legal Indemnity policies.

You can obtain quotations from Hayes Parsons Insurance Broker’s online shop.

Alternatively, get in touch with your Legal Indemnities expert, Paul Guest:

Paul Guest Cert CII
Account Executive
0117 930 1651 | 07736 929 023