Contaminated Land Indemnity Insurance Bank conveyancing requirements
Natwest and Leeds Building Society, in common with the majority of lenders, set their own specific instructions when it comes to contaminated land indemnity insurance. The content herein aims to help conveyancing solicitors on the various lender approved list of panel lawyers where the title to be charged incorporates contaminated land. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each mortgage company, for example Santander, Virgin Money or Lloyds TSB. The content on this page is not focused on contaminated land indemnity insurance requirements.
Need help with contaminated land indemnity insurance from your lender?
Godiva Mortgages and RBS as with the majority of lenders, obligations require that where contaminated land indemnity insurance is effected:
- your practice must reveal to the insurer all relevant information which you have obtained
- the contaminated land indemnity insurance policy should not incorporate terms that you are aware would void or prejudice the interests of the mortgage company
- you must send a copy of the contaminated land indemnity insurance to the mortgagor and explain to the borrower why the contaminated land indemnity insurance policy was effected and that a further policy could be mandatory if there is further borrowing against the mortgaged property
- the contaminated land indemnity insurance policy should be effected without expense to the lender
- the contaminated land indemnity insurance policy should always be in favor of the lender and, if possible, for the benefit of the borrower and any future registered proprietor or lender. Where the mortgagor will not be protected by the contaminated land indemnity insurance policy, the mortgagor should be advised accordingly.
- your firm are responsible for approving the terms of the contaminated land policy on behalf of the mortgage company
- the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- you must explain to the borrower that the borrower will need to adhere to any conditions of the contaminated land indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
| Lender | Requirement |
|---|---|
| Adam & Company | The open market value of the property according to the valuation report. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Atom Bank | At least the open market value of the property according to the valuation report. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| Godiva Mortgages | Minimum of the value of the property. |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Investec | The open market value of the property according to the valuation report. |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| RBS - Direct Line | An amount equal to the value of the property. |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS- First Active | An amount equal to the value of the property. |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Ulster Bank | An amount equal to the value of the property. |
General Contaminated Land indemnity insurance points to consider
The full terms, conditions and exclusions for contaminated land indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners should point your non-lender client to the contaminated land indemnity insurance policy paperwork. Contaminated Land Contingency insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check the schedule to determine that it is in order. The lifetime of this non-investment insurance agreement is in perpetuity unless otherwise stated in the contaminated land indemnity insurance policy. Again, please check that this is as you expected.Contaminated Land indemnity insurance: Important features and benefits:
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Contaminated Land indemnity insurance Policies should be checked for the following- Reimbursement for compensation incurred in any proceedings regarding the risks specified in the contaminated land policy, as well as legal and associated costs.
- Loss in market value resulting from the successful enforcement of the risks specified in the contaminated land policy.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the contaminated land indemnity insurance, to the extent that such costs are rendered abortive by court order.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Money paid with the written consent of the insurance company to free the land from the risks specified in the contaminated land indemnity insurance.
- The out of pocket expenses of altering or destroying 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.
Due diligence should extend to checking that the answers on the application form are accurate. However remote the likelihood of a claim on the bank insurance policy might be you can certain that the insurer will check the details on any proposal form thoroughly before any claim is met.
Contaminated Land Indemnity Insurance has limitations - Further considerations
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from contaminated land insurance may be adequate for your client. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the bank solicitor panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender indemnity insurance. Whilst we endeavour to keep the information up to date and correct we do not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Lexsure will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
An important exclusion applying to most contaminated land Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The above information is in relation to properties in England and Wales.