Forfeiture of Superior lease Indemnity Insurance Lender conveyancing requirements
Barnsley BS and Yorkshire Building Society, as with most mortgage companies, have their own specific instructions when it comes to forfeiture of superior lease indemnity insurance. This page is designed to help conveyancing lawyers on the various lender conveyancing panel where the title for the the property to be mortgaged contains forfeiture of superior lease. It is not a alternative for checking the Council of Mortgage Lenders’ handbook requirements for each lender, for example Virgin Money, Nationwide or Bank of Scotland. 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?
Skipton and Yorkshire Bank Home Loans like the majority of mortgage companies, requirements are that where forfeiture of superior lease indemnity insurance is effected:
- your practice must send a copy 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 a further policy could be necessary if there is additional lending against the security of the property
- the minimum level of cover for the policy must meet the requirements for the bank (See Part II Handbook requirements )
- the forfeiture of superior lease indemnity insurance policy must not incorporate conditions which you know would invalidate or prejudice the interests of the mortgage company
- your firm is required to reveal to the insurer all relevant information which you have obtained
- your practice must approve the terms of the forfeiture of superior lease policy on behalf of the lender
- your practice is duty bound to spell out to the borrower that the borrower must adhere to any conditions of the forfeiture of superior lease indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the insurance
- the forfeiture of superior lease indemnity insurance policy should be placed on risk without charge to the mortgage company
- the forfeiture of superior lease indemnity insurance policy should always be in favor of the mortgage company and, wherever possible, for the benefit of the borrower and any next registered proprietor or mortgage company. If the borrower will not be covered by the forfeiture of superior lease indemnity insurance policy, you must advise the mortgagor of this fact.
| Lender | Requirement |
|---|---|
| Cynergy Bank | The market value of the property. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Landmark | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express | Amount of loan + 15% |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Reliance Bank | \xA31,000,000.00 |
| Sainsbury's Bank | An amount equal to the higher of the value of the property or the purchase price. |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| The Mortgage Lender | An amount at least equal to the mortgage advance. |
| RBS - Direct Line | An amount equal to the value of the property. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| Topaz Finance | 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. |
| Yorkshire 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. |
Forfeiture of Superior lease Contingency Insurance : Reflections
The extent of the terms for forfeiture of superior lease indemnity insurance are identified in the policy paperwork. Conveyancing solicitors should point your non-lender client to the forfeiture of superior lease indemnity insurance policy itself. The intention of forfeiture of superior lease indemnity insurance is to grant indemnity in respect of the risks specified in the policy schedule - so it is essential check the document to ensure it is in order. The lifetime 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 superior lease 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. Forfeiture of Superior lease indemnity insurance Policies are likely to cover the following- Cover for compensation incurred in any proceedings regarding the risks specified in the forfeiture of superior lease policy, as well as incurred costs and expenses.
- Expenses for works (including professional fees) for the purpose of the development commenced, prior to 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.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Money paid with consent in writing from the insurance company to free the property from the risks specified in the forfeiture of superior lease indemnity insurance.
- The cost of altering or demolishing 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.
- Market value reduction due to the successful enforcement of the risks specified in the forfeiture of superior lease indemnity insurance.
Always consider what is excluded from the forfeiture of superior lease insurance e.g. does the policy cover any residence that has been altered within the year prior to the policy being put on risk? Does it cover legal costs?
Forfeiture of Superior lease Indemnity Insurance has limitations - Supplemental considerations
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from forfeiture of superior lease insurance may be adequate for your client. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the bank 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 above information covers to properties in England and Wales.