Chancel repair – exchange or completion?
We all know that chancel repair liability ceased to be an overriding interest on 13 October 2013. Now, a purchaser of land will only be bound if the chancel repair liability is registered against the title.
But, what if the parochial church council registers its claim between exchange and completion – is it the seller or the buyer who bears the burden? This is the point explored in an excellent letter from Lightfoots in the LSG, which notes that the Standard conditions of Sale (and Standard Commercial Property Conditions) say the property is sold subject to ‘public requirements’ which means a notice given by a body acting on statutory authority such as a parochial church council). Likewise, both sets of conditions make it clear that the property is at the risk of the buyer from the date of contract, and the end result of these provisions is that the risk of a claim arising between exchange and completion would seem to lie with the buyer.
How should this risk be addressed? One option is for the buyer to take out insurance to cover the period between exchange and completion (i.e until the transfer is registered); another would be to persuade the seller that it would be responsible for meeting any chancel repair liability arising during that time period; and another possibility might be to allow for rescission if such a claim is made. Nevertheless to say, none of these are particularly attractive. Another possibility is to avoid a long completion period, so you can have a clear priority search (carried out before exchange) that runs for a sufficient time post-completion for you to complete the registration of the transaction.
For any further information or help with your Residential Property issues please contact Norma Allison on 01189 478638.