chancel liability; sign government petition! + advice needed

[ptcottage]

Hello,

Like many others I have been reading with (obsessive) interest and horror about the woolly laws surrounding chancel repairs liability. Before I get into my comments and questions, I urge everyone to sign this petition to sway the government into making reforms. At present, there are under 300 signatures, yet this liability may seriously affect the value and saleability of many thousands of homes.

http://petitions.pm.gov.uk/Chancel-Repair/


For anyone who has followed previous threads, it should be noted that it is unclear just how useful liability insurance is for property owners who do not intend to sell their property, since any benefit from a parish not registering a claim on a property by 2013 only applies once a property changes hands. In other words, if no claim is registered and you do not sell your property, you may still be liable if a claim is registered post 2013.

Further, if you do carry liability insurance but an interest is then registered, you may not then renew your policy after its expiration date (policies typically 25 years).

As for my question - I am currently trying to purchase a property, which I know was once owned by the church. The building was not the rectory, but it was originally sold by the church under the Endowments and Glebe Measure of 1976. I am waiting (impatiently) for our solicitor to shed some light about whether this is a good thing or a bad thing (I'm guessing bad), but I have found a document about this measure which states:

Repair of chancels

39 Liability to repair certain chancels transferred to parochial church councils

The liability to repair, or to pay a proportion of the cost of repairing, the chancel of a church, being a liability—

(a) arising from the ownership immediately before the appointed day of glebe land or any other property constituting part of the endowments of a benefice and held by or in trust for the incumbent of the benefice, or

(b) arising from the ownership of any tithe rentcharge which was extinguished on 2 October 1936 by the Tithe Act 1936 and immediately before that date was held by Queen Anne’s Bounty in trust for the incumbent of a benefice,

shall on the appointed day and without any assurance be transferred to and become the liability of the parochial church council of the parish in which the church is situated.

Since I do not speak legalese, can anyone let me know if this means the property is doomed or liberated? Does this mean the parish church must find their own funds, or that it empowers them to come after property owners?

Regardless of whether I get this property, I feel on a bit of a mission to educate everyone about these risks...

Any help, clarifications, etc., most welcome. Thank you!

 

[skier-hughes]

I don't think it is doomed or liberated......

Why not get your solicitor to write to the church and ask them to tell you if they are going to make a claim or not.

 

[ptcottage]

Good suggestion, but alas if an enquiry is made directly to the church, you are alerting them that the property in question may be liable, thus prompting them to register a claim (effectively doing their work for them in searching for liable properties).

Further, if a solicitor then has concrete knowledge of a claim - or intent to claim - they are obliged to inform the land registry. Thus making it impossible to get insurance (and rendering the property unsaleable but for people who are unafraid of £200,000 bills). Catch 22! Hence why many people are asking these questions from experienced property owners rather than from the officials...

The best thing a solicitor can do is ensure a property owner gets liability insurance, but as stated before this cover only goes so far - which is not made clear from the chancel insurance websites.

 

[skier-hughes]

Well if it was me I'd like to know and then not bother buying it, or if I just had to have it I'd take the chance of being caught out.

As far as alerting them goes, if they get so desperate for mney adn this starts to get publicity, via the last case/the petition etc, I think any cluded up church is going to start looking hard at how to raise some cash, so in the end unless I wa happy to run the risk of bankruptcy, I'd either want to know before buying or leave it...... back to my first sentence!!!!

 

[Penners]

Like SH, I urge you to take qualified legal advice on this. I can't believe that you wouldn't do this, for fear of alerting the church. If the property carries a chancel repair liability, you need to know that for certain - regardless of whether you're alerting the church or not.

After all, if it transpires that the property does carry this liability, you're not going to buy it, are you?

Talk to your solicitor.

 

[ptcottage]

I am indeed seeking legal advice on this and of course I will not be proceeding with the sale if anything is thrown up that makes the house uninsurable. However, it is important that everyone who is liable realise that raising queries directly with the church is NOT the way to gain this information. It's completely perverse, but any query can render a home uninsurable.

Consider this questionnaire from First Title insurance group for chancel liability insurance - note what I have highlighted in bold:

UNDERWRITING INFORMATION

Please note that cover for this risk is restricted to 25 years

Please supply a copy of the title (including reference to the liability) together with a filed plan

Are the current owners aware of any appeal to raise funds for the chancel repair? Yes / No
Is the property built on former glebe land? Yes / No
Is the chancel in good repair? Yes / No / Not Known
Has a chancel repair search been carried out? (If yes, please supply a copy) Yes / No
Is the property in the immediate vicinity of the church? Yes / No
Have the owners (or to their knowledge their predecessors) made any payments or received any
demands for chancel repairs? Yes / No

Any cover provided will be on the assumptions that:
there has been no approach to the parochial authorities regarding the liability to repair the chancel

The property has been and will be owner occupied

A minefield, eh?
[/i]

 

[Penners]

A minefield indeed. But in the case of your own prospective purchase, if it transpires that the property does or might carry this liability, would you proceed with the purchase, even if the church hasn't been alerted, and even if you have access to indemnity insurance?

Personally, I don't think I would. There are far too many other things to worry about in purchasing a property, without adding another one!

 

[ptcottage]

That is my thinking indeed. The question really is whether anyone knew much about the Endowments and Glebe Measure of 1976, as mentioned, and whether this may in effect negate any chancel liability. I am asking my solicitor about it, but if anyone else has any experience of it in might help inform me to ask the right questions of my solicitor.

 

[Flyfisher]

For anyone who has followed previous threads, it should be noted that it is unclear just how useful liability insurance is for property owners who do not intend to sell their property, since any benefit from a parish not registering a claim on a property by 2013 only applies once a property changes hands. In other words, if no claim is registered and you do not sell your property, you may still be liable if a claim is registered post 2013.

First, I'm no expert on all this, but I have also been reading up on this whole issue.

My understanding is that potential liability after 2013 only applies to unregistered property. So, if your property is registered at Land Registry and the Church does not 'stake a claim' before 2013, then you are in the clear. Unfortunately, I can't remember the legal website where I read this - I've been reading so many recently!

Also, this whole issue is not limited to people currently buying property; it applies to anyone who already owns property. I've read that 35% of parishes may be able to make such claims, so it's likely to affect a lot of people and I assume the church will be working towards registering as many claims as it can before 2013.

As for "Chancel Checks", these seem to be worse than a waste of time and money because they will prevent you from buying insurance if it turns out you have a liability. It is also curious that the insurance policies I've seen are actually cheaper than a full check, so why bother checking instead of just buying the insurance?

My current approach to all this is to just buy the insurance on the basis that it's actually the only useful thing any property owner can actually do . . . . although I'd love to hear of any better suggestions!

 

[ptcottage]

hi flyfisher,

you are right - to a point. here's the very scary fine print...

you say:

My understanding is that potential liability after 2013 only applies to unregistered property. So, if your property is registered at Land Registry and the Church does not 'stake a claim' before 2013, then you are in the clear.

if a property does not have a claim by 2013, the current property owner is NOT free and clear. however, if they sell after this date (and there is no claim), then the benefit is good ONLY to the new owner. the current owner may still be liable if a claim is made after 2013, thus leaving the property extremely veulnerable if not sold.

Yes, you can get insurance, but as I said this is only good for 25 years, and is null and void after expiration if a claim is made and the current owner still has posession.

So, free and clear only if:
a) No claim is made by 2013 AND
b) The occupying owner then sells up

In other words, anyone who currently owns a property at risk (and keeps it), and anyone who purchases a property at risk up until 2013 (and keeps it) will never be free and clear.
[/quote]

 

[Flyfisher]

Yes, that was my understanding too until I found this site which states "After October 2013, chancel repair liability will still be enforceable against any freehold title which is unregistered. ", which rather implies that any freehold title already registered cannot, after 2013, have a chancel liability imposed upon it.

But it's all a confusing mess, that's for sure.

In the end it all boils down to what you can actually do about it. It seems to me that any property owner may have this liability, and there is nothing you can do to change that fact. Therefore, I can only see three courses of action:

1. Do nothing, and just let events play their course (even if you have a liability, there may never be an actual claim)
2. Seek confirmation, which prevents option 3 from being taken
3. Buy insurance, which should last for 25 years.

The issue about the post 2013 position will no doubt be clarified in due course, but whatever the outcome it will happen irrespective of any action by the property owner (as I understand things).

As I said before, option 2 seems to me to be worse than a waste of time as it restricts your other options, so you either do nothing or buy the insurance. Given that the insurance is around £100 then I'd say it was a 'no-brainer' when buying a new house, and is seriously worth considering by all property owners anyway (having said that, I've yet to properly read a policy in detail).

In practice, my bet is that most people buying a new property will buy the insurance and most existing property owners will ignore the issue, either out of ignorance or complacency.

Even if it turns out that chancel liability can still be imposed after 2013 for existing owners, then one possibility might be to implement a change of ownership where possible (e.g. from husband to wife etc), which would require a re-registration at Land Registry. However, I suspect this might require the payment of stamp duty, so it might not be a cheap option.

 

[biffvernon]

Given that the insurance is around £100 then I'd say it was a 'no-brainer' when buying a new house, and is seriously worth considering by all property owners anyway

So you're suggesting that the insurance industry should suddenly gain £100 x 10 million in premiums - That's a BILLION pounds!

Should fix a few church roofs.

 

[Flyfisher]

Er, yes, that's the whole point . . . the insurance companies pick up the chancel repair liabilities.

Anyway, how much do you already pay for your house insurance? Whatever it is, you pay it every year. This insurance is less than £100 for 25 years - less than £4 per year. It's a drop in the ocean compared with how much is already spent on domestic insurance each and every year.

You may still think this is a waste of money, but I suspect the Wallbank family would have a different view.

Still, no one is forcing you . . . it all depends on your attitude to risk and how lucky you feel.

 

[biffvernon]

But it's such a scam. Let's pay the £billion to the church roof fund or whatever and leave the insurance industry out of it.

 

[Nemesis]

Better still - let's lobby for a change in the law.

 

[ptcottage]

Remember, too, that under the new legislation churches are not only highly incentivised to seek out and register properties that may be liable, they are actively being advised by their own law council to protect their "assets". While these are not physical assets (your home), they are indeed important sources of potential revenue that they cannot ignore. That could very well mean you. Not a risk anyone who has even the vaguest hint that they might be liable should take... If you are a property owner in a liable parish, you'd be nuts not to take out the insurance because if your home gets registered as liable (we're not even talking bills yet), it's all over.

But again, my point here is that even this insurance may not be enough to protect yourself. It may cover the costs if there is an actual claim, but whether you've had an actual claim or have just been identified, after 25 years - THAT'S IT, no more insurance (unless the law changes so sign the petition!). No possibility of insurance means you can't sell your house.

This is not some strange tangential issue that only affects a couple of homes, this is a very real and very worrying prospect for tens of thousands of homes (about 5200 parishes are liable, and an unknown number of homes within each are being identified) and not just in rural areas.

You don't actually need to ever have a bill sent through your door to render your house worthless, all it takes is for the church to make a notification of potential liability. Scary stuff.

 

[ptcottage]

But it's such a scam. Let's pay the £billion to the church roof fund or whatever and leave the insurance industry out of it.

Better still - let's lobby for a change in the law.

precisely!!

sign ye here and let's get noisy. this should stay in the news until it's abolished.

http://petitions.pm.gov.uk/Chancel-Repair/

 

[Flyfisher]

But it's such a scam.

Depends on your definition of 'scam' I suppose. I tend to think of 'scams' as something illegal - so far, chancel liability has stood the test of many legal challenges in just one case. A disgrace, yes, but not a scam.

Let's pay the £billion to the church roof fund or whatever and leave the insurance industry out of it.

And how, in the real world, do you suggest that could be organised in practice? If you can achieve that then you could do the same for fire risks; leave the insurance industry out of it and if your house burns down all the other householders in the country would send you a few pennies to cover your re-build costs. Yeah, right.

 

[Flyfisher]

Better still - let's lobby for a change in the law.

Well yes (have you signed the petition?), but are you happy to rely on this method alone?

As ptcottage has pointed out, every property owner, town or country, old or new, is at risk of having a chancel liability registered against their property in the next 6 years.

Indeed, the church will be working hard to assert these rights before the 2013 deadline because ". . . the statutory responsibility for maintaining parish churches falls upon the Parochial Church Councils. These are subject to the provisions of charity and trust law and they are under a duty in carrying out their statutory responsibility to seek what funds are legally available to them of which they are aware. " as explained in this letter from the Bishop of Coventry in which he acknowledges that chancel repair liability is outdated and should be replaced but until then the church has a legal duty to maximise its revenue from this source.

Against that background, £100 or so for 25 years of protection starts to seem like a bargain - to me anyway.

 

[biffvernon]

My point was that insurance is the wrong vehicle for this kind of problem. We obviously need a legal fix. Insurance is for stuff like fire and theft not the law being an ass.