Forfeiture of Superior lease Indemnity Insurance Mortgage Company conveyancing requirements

Barclays and Chelsea BS, in common with the majority of mortgage companies, have their own requirements when it comes to forfeiture of superior lease indemnity insurance. This page sets out to enlighten property law lawyers on the various lender solicitors panel where the title to be charged includes forfeiture of superior lease. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each lender, for example Yorkshire Bank Home Loans, Skipton or Godiva Mortgages. 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?

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Leeds Building Society and Halifax like the majority of lenders, instructions are such that where forfeiture of superior lease indemnity insurance is to be taken out:

• the forfeiture of superior lease indemnity insurance policy must be in favor of the mortgage company and, wherever possible, for the benefit of the borrower and any subsequent registered proprietor or mortgagee. If the borrower will not be covered by the forfeiture of superior lease indemnity insurance policy, the mortgagor needs to be informed accordingly.
• the forfeiture of superior lease indemnity insurance policy must be placed on risk at no charge to the lender
• the limit of indemnity must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
• your practice is duty bound to spell out to the mortgagor that the borrower will need to adhere to any conditions of the forfeiture of superior lease indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in respect of the policy
• your firm is required to disclose to the insurer all relevant information which you have obtained
• the forfeiture of superior lease indemnity insurance policy must not contain conditions which you know would void or prejudice the interests of the lender
• you must supply a duplicate of the forfeiture of superior lease indemnity insurance to the borrower and explain to the borrower why the forfeiture of superior lease indemnity insurance policy was effected and that additional insurance could be mandatory if there is further lending against the security of the property
• your firm must approve the terms of the forfeiture of superior lease policy on behalf of the mortgage company

As to the level of cover for the forfeiture of superior lease indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Paragraph 9.2 of the Part 2 requirements for banks:

Forfeiture of Superior lease Contingency Insurance : Reflections

The extent of the terms for forfeiture of superior lease indemnity insurance are set out in the policy document. Property lawyers should direct the borrower to the forfeiture of superior lease indemnity insurance policy paperwork. The intention of forfeiture of superior lease indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so it’s important to check the schedule to ensure it is in order. 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.

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Important aspects and benefits of forfeiture of superior lease Contingency insurance :

The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the forfeiture of superior lease indemnity insurance schedule. Forfeiture of Superior lease indemnity insurance Policies should be checked for the following

• The cost 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 superior lease insurance, as well as fees of a legal nature.
• All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the forfeiture of superior lease insurance.
• All other costs and expenses incurred by the Insured with the written consent of the relevant insurer
• Diminution in value resulting from the successful enforcement of the risks specified in the forfeiture of superior lease insurance.
• Expenses for 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 indemnity insurance, to the extent that such costs are rendered abortive by court order.

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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.

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Forfeiture of Superior lease Indemnity Insurance has limitations - Additional considerations

Forfeiture of Superior lease insurance may satisfy lenders such as Nationwide or Bank of Scotland 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.

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The above information is in relation to properties in England and Wales.