Absentee Landlord Indemnity Insurance Mortgage Company conveyancing requirements
Skipton and HSBC, in common with the majority of banks, dictate their own requirements when it comes to absentee landlord indemnity insurance. The content herein aims to help property law lawyers on the different mortgage company solicitors panel where the title to be charged incorporates absentee landlord. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each lender, whether it be Accord, Yorkshire Building Society or RBS. The information on this page Is not to be read as absentee landlord indemnity insurance advice.
Need help with absentee landlord indemnity insurance from your lender?
As a property lawyer on a mortgage company panel you must notify to the mortgage company (see Section two of the UK Finance Lenders’ Handbook) if it becomes apparent that the landlord is either absent or insolvent. If the bank are to lend, they may require absentee landlord indemnity insurance. In some conveyancing matters a purchaser or lender might accept a missing landlord indemnity insurance but many purchasers or lenders will not be willing to move forward. See 5.14.15 to see if the lender accept indemnity insurance if the landlord is absent or insolvent. Examples of such requirements as follows:
| Lender | Requirement |
|---|---|
| Godiva Mortgages | |
| National Counties Building Society | |
| The Mortgage Business | |
| RBS - Virgin One | |
| Together Personal Finance | |
| Topaz Finance | |
| Yorkshire Building Society |
About Absentee Landlord Indemnity Insurance
Missing Landlord Insurance is normally needed when the freeholder or landlord of land or property is insolvent, absent or where the company is no longer in existence. This results in an inability to pay ground rent and seek consent to lease assignments and alterations to the property. The potential risk is that the landlord may request ground rent or take action for forfeiture of the lease on the premise of breach of covenant should they subsequently re-appear.
Birmingham Midshires and Santander like many mortgage companies, instructions are such that where absentee landlord indemnity insurance is to be taken out:
- your practice is obliged to disclose to the insurer all relevant information which you have gathered
- the absentee landlord indemnity insurance policy must be in favor of the bank and, if possible, in favour of the borrower and any next registered proprietor or mortgagee. Where the borrower will not be protected by the absentee landlord indemnity insurance policy, you must advise the borrower of this fact.
- the level of indemnity must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- your practice are responsible for approving the terms of the absentee landlord policy on behalf of the mortgage company
- the absentee landlord indemnity insurance policy should not contain conditions that you are aware would invalidate or prejudice the interests of the mortgage company
- your practice must point out to the borrower that the borrower is obliged to adhere to any conditions of the absentee landlord indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in respect of the policy
- you must send a copy of the absentee landlord indemnity insurance to the mortgagor and explain to the mortgagor why the absentee landlord indemnity insurance policy was effected and that a further policy may be necessary if there is supplemental borrowing against the security of the property
- the absentee landlord indemnity insurance policy must be effected without charge to the lender
| Lender | Requirement |
|---|---|
| Britannia | |
| Cynergy Bank | |
| Furness Building Society | |
| Godiva Mortgages | |
| Investec | |
| Market Harborough Building Society | |
| Molo Finance Buy to Let | |
| National Counties Building Society | |
| New Street Mortgages | |
| Perenna | |
| Precise Mortgages 2026 | |
| Principality Building Society | |
| State Bank of India UK | |
| The Mortgage Business | |
| RBS - Direct Line One | |
| RBS - Virgin One | |
| Together Personal Finance | |
| Topaz Finance | |
| Vida Homeloans | |
| Yorkshire Building Society |
Absentee Landlord Contingency Insurance : Reflections
The full terms, conditions and exclusions for absentee landlord indemnity insurance are shown in the policy document. Conveyancing Practitioners should direct your non-lender client to the absentee landlord indemnity insurance policy paperwork. Absentee Landlord Contingency insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it’s important to check the document to ensure it is in order. The lifetime of this non-investment insurance agreement is in perpetuity unless otherwise stated in the absentee landlord indemnity insurance policy. It is well worth checking that the time frame is correct.Important characteristics and benefits of absentee landlord indemnity insurance :
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Absentee Landlord indemnity insurance Cover normally includes- Reimbursement for compensation incurred in any action concerning the risks specified in the absentee landlord insurance, as well as solicitors charges.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurer
- The cost of altering or taking down all, or part of the development and the reinstatement of the land, insofar as such alteration, demolition or re-instatement is made necessary by court order.
- Diminution in value due to the successful enforcement of the risks specified in the absentee landlord indemnity insurance.
- Money paid with the written consent of the insurance company to free the property from the risks specified in the absentee landlord indemnity insurance.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the absentee landlord indemnity insurance, to the extent that such costs are rendered abortive by court decision.
You also need to be sure that the answers on the application form are correct. However remote the likelihood of a claim on the bank insurance policy might be you can be sure that the insurer will check the details on any proposal form very carefully prior to any claim being met.
Additional considerations for absentee landlord indemnity insurance
Absentee Landlord Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that absentee landlord indemnity cover will not necessarily be the right solution.The content set out above covers to properties in England and Wales.