I recently transacted a mortgage application for a client for the purchase of a new build property. All offered and ready for exchange. Or so we thought.
The conveyancer then makes a search to determine whether the property has a ‘Chancel Repair Liability’ – a search I have never heard of. They cannot ascertain the exact amount of any potential liability and the lender now considers the property unacceptable security – even with £250,000 of indemnity cover.
If others have not heard of this, type ‘Aston Cantlow Chancel’ into Google or a similar search engine and read as much as you desire.
Essentially this case involved an attempt by a parochial church council to obtain payment from the lay rectors of a parish for the cost of repairs to the chancel of the parish church. The lay rector in this case being an ordinary Joe Public, who had inherited the liable property.
My point is how will HIPs guarantee all relevant searches have been carried out? My client is the only purchaser on this new build development that has encountered a problem, leading me to surmise that no other purchaser’s conveyancer is even making this enquiry, leaving their clients with potentially massive liabilities.
Will HIPs simply bring in a culture of purchasing Indemnity Policies for all unexplored potential liabilities rather than being the explicit and thorough report in to the structural and legal condition of a property that they intend to be?
Steve Langrick
Ashley Law (Ashbourne)
