Forfeiture of Superior lease Indemnity Insurance Mortgage Company conveyancing requirements
Birmingham Midshires and HSBC, like most lenders, dictate their own specific instructions when it comes to forfeiture of superior lease indemnity insurance. This page is designed to help domestic conveyancing lawyers on the numerous lender approved list of panel lawyers where the title for the the property to be mortgaged incorporates forfeiture of superior lease. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each bank, whether it be Yorkshire Building Society, Coventry BS or Natwest. The information on this page is not focused on forfeiture of superior lease indemnity insurance requirements.
Need help with forfeiture of superior lease indemnity insurance from your lender?
Accord and Santander in common with most mortgage companies, requirements are that where forfeiture of superior lease indemnity insurance is to be taken out:
- you is obliged to disclose to the insurer all relevant information which you have obtained
- your firm must approve the terms of the forfeiture of superior lease policy on behalf of the lender
- your firm must send a duplicate of the forfeiture of superior lease indemnity insurance to the mortgagor and explain to the mortgagor why the forfeiture of superior lease indemnity insurance policy was effected and that additional insurance may be required if there is additional lending against the mortgaged property
- your firm must explain to the borrower that the borrower must comply with any conditions of the forfeiture of superior lease indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
- the level of indemnity must meet the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- the forfeiture of superior lease indemnity insurance policy should not contain terms that you are aware would void or compromise the interests of the mortgage company
- the forfeiture of superior lease indemnity insurance policy should be effected at no expense to the bank
- the forfeiture of superior lease indemnity insurance policy must be for the benefit of the lender and, if possible, for the benefit of the borrower and any next registered proprietor or mortgagee. If the mortgagor will not be protected by the forfeiture of superior lease indemnity insurance policy, you must advise the borrower of this fact.
| Lender | Requirement |
|---|---|
| April Mortgages | An amount at least equal to the mortgage advance. |
| Chelsea Building Society | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Coventry Building Society | Minimum of the value of the property. |
| Godiva Mortgages | Minimum of the value of the property. |
| Habito | Higher of purchase price or valuation |
| Halifax | An amount at least equal to the mortgage advance. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| JPMorgan | 110% of principal sum. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| Leeds Building Society | An amount at least equal to the amount of the mortgage advance plus 10%. Any indemnity insurance policy must protect the borrowers, any successor in title and any Mortgagee. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| Lloyds | The value of the property. |
| Lloyds TSB Scotland | The value of the property |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Scottish Widows | The value of the property. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Forfeiture of Superior lease Contingency Insurance : Reflections
The full terms, conditions and exclusions for forfeiture of superior lease indemnity insurance are set out in the policy paperwork. Conveyancing solicitors are obliged to direct your non-lender client to the forfeiture of superior lease indemnity insurance policy document. The intention of forfeiture of superior lease indemnity insurance is 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 as it should be. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the forfeiture of superior lease indemnity insurance policy. Adequacy in this regard should be checked.Forfeiture of Superior lease indemnity insurance: Significant aspects 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. Forfeiture of Superior lease indemnity insurance Cover normally includes- Diminution in value resulting from the successful enforcement of the risks specified in the forfeiture of superior lease policy.
- Money paid with consent in writing from the insurance company to liberate the land from the risks specified in the forfeiture of superior lease policy.
- Liability for damages or compensation incurred in any action in respect of the risks specified in the forfeiture of superior lease insurance, as well as incurred costs and expenses.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- 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.
- The cost of works (including professional fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the forfeiture of superior lease policy, to the extent that such costs are rendered abortive by court order.
As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the forfeiture of superior lease policy will be invalidated.
Forfeiture of Superior lease Indemnity Insurance has limitations - Supplemental considerations
Forfeiture of Superior lease 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 forfeiture of superior lease indemnity cover will not necessarily be the right solution. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing 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 superior 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 content set out above covers to properties in England and Wales.