Good Leasehold Title Indemnity Insurance Bank conveyancing requirements
Birmingham Midshires and Chelsea BS, like many banks, dictate their own specific instructions when it comes to good leasehold title indemnity insurance. The content herein aims to help property law lawyers on the numerous bank solicitors panel where the title for the the property to be mortgaged incorporates good leasehold title. It is not a alternative for checking the Council of Mortgage Lenders’ handbook requirements for each lender, whether it be RBS, Coventry BS or Natwest. The information on this page is not focused on good leasehold title indemnity insurance requirements.
Need help with good leasehold title indemnity insurance from your lender?
Lloyds TSB and Halifax like most mortgage companies, obligations require that where good leasehold title indemnity insurance is to be put on risk:
- your practice is obliged to reveal to the insurer all relevant information which you have acquired
- you are responsible for approving the terms of the good leasehold title policy on behalf of the lender
- the good leasehold title indemnity insurance policy should be effected without expense to the lender
- the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- the good leasehold title indemnity insurance policy should not incorporate conditions that you recognise would invalidate or compromise the interests of the lender
- the good leasehold title indemnity insurance policy needs to be for the benefit of the bank and, wherever possible, in favour of the borrower and any future owner or mortgage company. If the borrower will not be covered by the good leasehold title indemnity insurance policy, you must advise the mortgagor of this fact.
- your practice must point out to the borrower that the borrower must adhere to any conditions of the good leasehold title indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in respect of the policy
- your practice must supply a duplicate of the good leasehold title indemnity insurance to the borrower and explain to the mortgagor why the good leasehold title indemnity insurance policy was effected and that a further policy could be required if there is supplemental lending against the security of the property
| Lender | Requirement |
|---|---|
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Barclays plc | Higher of purchase price or valuation |
| Clydesdale Bank | Open market value of property. |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Gen H | An amount equal to the value of the property unless specifically agreed in writing otherwise. |
| 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. |
| Lloyds | The value of the property. |
| Lloyds TSB Scotland | The value of the property |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| The Mortgage Lender | An amount at least equal to the mortgage advance. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
| Yorkshire Bank | Open market value of property. |
General Good Leasehold Title indemnity insurance points to consider
The extent of the terms for good leasehold title indemnity insurance are set out in the policy paperwork. Property lawyers should direct the borrower to the good leasehold title indemnity insurance policy itself. Good Leasehold Title Contingency insurance is devised to afford indemnity in respect of the risks set out in the policy schedule - so it’s important to check any draft to ensure it is correct. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Good Leasehold Title indemnity insurance: Significant features and benefits:
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the good leasehold title indemnity insurance schedule. Good Leasehold Title indemnity insurance Policies are likely to cover the following- 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.
- All sums paid with consent in writing from the insurance company to free the property from the risks specified in the good leasehold title insurance.
- The cost of works (including professional fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the good leasehold title insurance, to the extent that such costs are rendered abortive by court order.
- Reimbursement for compensation incurred in any proceedings regarding the risks specified in the good leasehold title indemnity insurance, including incurred costs and expenses.
- Market value reduction resulting from the successful enforcement of the risks specified in the good leasehold title indemnity insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
Always consider what is excluded from the good leasehold title indemnity insurance e.g. does the policy cover any residence that has been altered within the 12 months prior to the policy being put on risk? Are legal costs covered?
Good Leasehold Title 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 good leasehold title insurance may be adequate for your client. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company 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 good leasehold title 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.