Do I need Chancel Repair Indemnity Insurance?
Some properties in England and Wales have a legal obligation to contribute to the repair of local church buildings. This is an historic right dating back hundreds of years and while it may seem unlikely that churches would force today’s homeowners to pay repair costs, the courts have ruled in favour of Church Councils to impose the repair charges on property owners.
There is no complete record of which properties have the chancel repair liability. And because it is not recorded against the property’s title register it is likely that neither you nor your lawyer would be aware.
The UK government introduced legislation in 2002 that gave the Anglican Church until the 13th October 2013 to register chancel repair liability against individual properties. The intention was that buyers after that date, where no liability had previously been registered, would be safe from future liability – though the protection would not be afforded to any property that was still unregistered at that date.
However, Land Registry Practice has given cause for concern that there may still be loopholes in this legislation that might entitle the church to register a liability against properties, and which might make future buyers liable to payment for chancel repairs. For instance, churches still retain their right to register this liability after the 2013 deadline until the time that a registered property is sold and changes hands.
The chances of an actual liability arising are remote, and this risk will probably be of very little importance to you in making a decision as to whether to proceed with purchasing your property. Your lawyer will however bring the risk to your attention before exchange of contracts, and make you aware that it is possible to obtain specialist chancel repair indemnity insurance.
Chancel repair indemnity insurance insures the owner of a property against any risks associated with a legal obligation to contribute to the cost of repairing local church buildings. The insurance protects against any financial claim from a church and will meet the repair costs should the church impose any charges on you. This insurance is particularly relevant when you are purchasing unregistered property. In most cases, the one-off policy premium will be less than £50, and you should ask your lawyer for a quote if you would like them to arrange a policy.
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