Bank conveyancing panel requirements re Forfeiture of Lease Indemnity Insurance
Barnsley BS and HSBC, like the majority of lenders, dictate their own specific instructions when it comes to forfeiture of lease indemnity insurance. The purpose of this page to assist conveyancing lawyers on the different lender approved list of panel lawyers where the title to be charged contains forfeiture of lease. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, be it Nationwide, Natwest or Chelsea BS. The information on this page is not focused on forfeiture of lease indemnity insurance requirements.
Need help with forfeiture of lease indemnity insurance from your lender?
Skipton and RBS like many lenders, instructions are such that where forfeiture of lease indemnity insurance is to be put on risk:
- the forfeiture of lease indemnity insurance policy should always be in favor of the lender and, if possible, for the benefit of the borrower and any next registered proprietor or mortgagee. Where the borrower will not be covered by the forfeiture of lease indemnity insurance policy, the borrower must be advised accordingly.
- your firm must approve the terms of the forfeiture of lease policy on behalf of the lender
- the forfeiture of lease indemnity insurance policy should be effected without expense to the lender
- the forfeiture of lease indemnity insurance policy must not contain terms that you know would invalidate or prejudice the interests of the lender
- your practice must disclose to the insurer all relevant information which you have gathered
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- your practice is duty bound to point out to the mortgagor that the borrower will need to adhere to any conditions of the forfeiture of lease indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in respect of the policy
- you must provide a duplicate of the forfeiture of lease indemnity insurance to the borrower and explain to the borrower why the forfeiture of lease indemnity insurance policy was effected and that a further policy might be necessary if there is further borrowing against the security of the property
| Lender | Requirement |
|---|---|
| April Mortgages | |
| Bank of Scotland | |
| Cynergy Bank | |
| Danske Bank | |
| Family Building Society | |
| HSBC UK Bank | |
| Investec | |
| Landbay Partners | |
| Lloyds Bank Private Banking | |
| M&S Bank | |
| Masthaven Bank | |
| Nationwide Building Society | |
| Paratus | |
| Principality Building Society | |
| Rely Mortgages | |
| Saffron Building Society | |
| Santander | |
| RBS- First Active | |
| Royal Bank of Scotland -Natwest One | |
| Tipton Coseley Building Society |
Forfeiture of Lease Contingency Insurance : Reflections
The full terms, conditions and exclusions for forfeiture of lease indemnity insurance are shown in the policy paperwork. Conveyancing Practitioners should point the borrower to the forfeiture of lease indemnity insurance policy paperwork. Forfeiture of Lease indemnity insurance is designed to provide indemnity in respect of the risks set out in the policy schedule - so you should check the document to ensure it is as it should be. The duration of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Important characteristics and benefits of forfeiture of lease indemnity insurance :
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the forfeiture of lease indemnity insurance schedule. Forfeiture of Lease indemnity insurance Policies should be checked for the following- Diminution in value resulting from the successful enforcement of the risks specified in the forfeiture of lease policy.
- Expenses for works (including professional fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the forfeiture of lease insurance, to the extent that such costs are rendered abortive by court decision.
- 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.
- Reimbursement for compensation incurred in any action regarding the risks specified in the forfeiture of lease indemnity insurance, including solicitors charges.
- All sums paid with the written consent of the insurance company to liberate the property from the risks specified in the forfeiture of lease policy.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurer
Don't forget to check what is not included in the forfeiture of lease insurance e.g. does the policy cover any property that has been altered within the year prior to the commencement of the policy? Are legal costs covered?
Supplemental considerations for forfeiture of lease indemnity insurance
Forfeiture of Lease insurance may satisfy lenders such as Lloyds TSB or Yorkshire Building Society and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the mortgage company approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company 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 forfeiture of lease 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 covers to properties in England and Wales.