Chancel Repair Liability
Not Dead But Merely Wounded - Chancel repair liability
13 October 2013
By: Robert Kelly
Those conveyancers who are already building bonfires of old Chancel Searches to celebrate the death of Chancel Repair Liability are in for a rude awakening on 13 October 2013. Chancel Repair Liability is not ending but the means of protecting landowners and buyers are changing significantly.
The Land Registration Act 2002 removed Chancel Repair Liability’s status as an “overriding interest” after 12 October 2013 and required them to be protected at the Land Registry to bind properties. Parochial Church Councils (PCCs) have been taking steps to register liability as a Notice over all affected registered properties or as a caution against first registration in respect of unregistered land. It is estimated that 25 out of the 45 PCCs have been actively registering and presumably this process will continue after 12 October.
So how do we protect landowners and buyers after 12 October 2013?
Official Copies (OCEs) will show if a liability has been registered. If the OCEs do not reveal a liability we have written a new “Chancel Repair Liability Indemnity Insurance” policy which will protect the buyer against any Chancel Repair Liability registered between then and the registration of their transfer, and will also have the additional benefit of protecting the seller’s successors in title against the same liability if for any reason the sale does not proceed. Sellers may want to think about getting this insurance as soon as the OCEs do not show a liability and offer its protection to the buyer.
We can still offer the traditional “No Chancel Search Indemnity Insurance “ policy where the OCEs do not reveal any registration and the seller has confirmed that they have no notice of any potential registration and this can be put in place at exchange.
However, a conveyancer who receives clear OCEs from the seller could choose to save their client the cost of this and protect the buyer by ensuring the contract clearly specifies the date and time of the OCEs provided and then put in place a normal Priority Search immediately after exchange. If the OS1 shows that a PCC has applied to register liability after the date of the OCEs then this becomes an issue for the seller’s conveyancer to deal with (hopefully they will have protected their client as suggested above); and if no entry is revealed by the OS1 then provided registration is applied for before the end of the Priority Period the buyer is protected. The registration of the transfer for value will end the chance for the PCC to register liability against that property forever.
The Land Registration Act 2002 also provides that a voluntary first registration after 12 October will have the same effect as a transfer for value and the PCCs right to register liability will be lost unless they have registered a caution against first registration before the application.
Robert Kelly is Commercial Business Development Manager at Stewart Title Limited. Robert has 25 years of experience as a Commercial Property lawyer specialising in development and portfolio management and in his role works closely with clients to help resolve title problems and facilitate development and use of property.
Telephone: 07415 240 703