MOFS Guide to Legal Indemnity Insurance - Flipbook - Page 8
Chancel Repair Liability
The risk that refuses to go away: we still find cover is required long after
the changes to the law in 2013. Chancel Repair is required to protect
against the risk that the local Parochial Church Council (PCC) requests a
contribution toward repairs to the chancel area of the church.
Contingent Buildings cover is designed to provide comfort where you
are insufficiently indemnified under an existing comprehensive All Risks
material damage building insurance policy, because:
Whilst the 2013 registration of an overriding interest was meant to clear
up the question over rights such as chancel repair, a property only ceases
to be subject to such liability when the property is sold for value without
a prior registration of the liability against the title or caution in the case of
unregistered land. PCCs can still register the chancel repair liability against
properties post-2013 so there is a risk until the property is sold, between
exchange and completion or if the property is gifted, that an overriding
interest can still be created.
Cover is generally extremely reasonable and Legal Representatives
should consider that in many cases this is cheaper than the search to
find out whether cover is required! Terms are also available where there
is a registered liability, though this is naturally more expensive and often
for a reduced period e.g. 25 years. Some insurers place a restriction on
particularly remote properties or where there is significant acreage, so this
should be borne in mind for large estates or agricultural land.
•The insurance provisions in your lease are either missing or irrelevant/
insufficient for the protection of the property.
•A third party who is responsible for maintaining Buildings Insurance for
the property and/or building fails to do so.
•The buildings insurance covering the property and/or building is
invalidated by the actions of someone other than yourselves, for
example another tenant.
•Your lease contains insufficient rights to compel the Landlord or owner
to reinstate the building following a Loss.
•Your lease is forfeited because the property and/or building can not be
reinstated within the timescales set out in your lease.
•Planning and/or other necessary consents required for repair or
reinstatement of the building can not be obtained.
Cover is generally only available on the basis that comprehensive all risks
insurance is in place at Policy Commencement, and insurers won’t cover
losses resulting from any Peril for which insurance cover is not actually
available at the date of the loss, for example Force Majeure.
Did you know...
The church themselves are responsible for the maintenance
of the rest of the structure other than the chancel, and most
cover from the market specifically limits claims relating to
anything other than the chancel. Case law is minimal and
therefore hazy in this regard, but there remains a question
mark as to where the chancel starts and stops…
Contingent Buildings cover does not step in, and is
not designed to assist, where the main building insurer
Liverpool 0151 255 2600 | Norwich 01603 393 701 | email@example.com