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Chancel Liability Update

March 21, 2016

October 13th 2013 marked the end of overriding interests, including Chancel Liability, or so many people thought. Our original article on this topic can be found here.

It was believed that after October 13th 2013, if a third party with an overriding interest had failed to register their interest at the Land Registry by that date then they would lose the benefit. It would no longer be necessary to carry out a chancel search or purchase an indemnity policy.

However clarification from the Land Registry has stated that just because the 13th October has passed and the Church has not registered the benefit of the overriding interest, this does not mean that the liability is extinguished.  

The Land Registry had stated that these interests should be registered by the deadline to avoid losing the benefit, and even offered an incentive of no registration fee. However, the Land Registry have clarified that the liability will only be extinguished if it has not been registered by the first transaction for valuable consideration.

In effect, the Church can register the interest any time up to the first transaction for valuable consideration after the 13th October. This means that the liability need not be registered until the property is sold and this could well be several years down the line.

Solicitors will probably find that inbetween obtaining office copies at the beginning of a transaction to carrying out the final OS1 search near the end, the liability will have been registered.

To identify and avoid any potential liability, conveyancers should continue to carry out chancel checks and consider chancel repair liability indemnity insurance.

Beverley Knight is a Legal Executive in the Conveyancing Department at BHW Solicitors in Leicester. Beverley can be contacted on 0116 281 6239 or by email at bevk@bhwsolicitors.com.

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