Mortgage Company conveyancing panel requirements re Good Leasehold Title Indemnity Insurance
Chelsea BS and Godiva Mortgages, as with many banks, dictate their own specific instructions when it comes to good leasehold title indemnity insurance. The content herein aims to help conveyancing lawyers on the different bank approved list of panel lawyers where the title to be charged contains good leasehold title. It is not a alternative for checking the Council of Mortgage Lenders’ handbook requirements for each lender, for example Yorkshire Building Society, Barclays or Virgin Money. The content on this page Is not to be read as good leasehold title indemnity insurance advice.
Need help with good leasehold title indemnity insurance from your lender?
Leeds Building Society and Lloyds TSB like most banks, instructions are such that where good leasehold title indemnity insurance is effected:
- the good leasehold title indemnity insurance policy should not incorporate conditions that you recognise would invalidate or compromise the interests of the lender
- you must send a duplicate of the good leasehold title indemnity insurance to the mortgagor and explain to the mortgagor why the good leasehold title indemnity insurance policy was effected and that additional insurance may be required if there is supplemental borrowing against the security of the property
- the good leasehold title indemnity insurance policy should be effected without cost to the bank
- your practice must approve the terms of the good leasehold title policy on behalf of the lender
- you is obliged to disclose to the insurer all relevant information which you have acquired
- the minimum level of cover for the policy must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the good leasehold title indemnity insurance policy must be for the benefit of the lender and, wherever possible, in favour of the mortgagor and any subsequent registered proprietor or lender. If the borrower will not be covered by the good leasehold title indemnity insurance policy, the borrower must be informed accordingly.
- your firm is duty bound to point out to the borrower that the borrower will need to adhere to any conditions of the good leasehold title indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the insurance
| Lender | Requirement |
|---|---|
| Bank of China | Cover to full value of the property or the Mortgage Advance, whichever is the higher. |
| 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.]
|
| Barnsley 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. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Bradford & Bingley | Amount of loan + 15% |
| Co operative Bank | An amount equal to at least 110% of the mortgage advance. |
| Habito | Higher of purchase price or valuation |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| 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. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Principality Building Society | Full market value of the property is preferred but if this is not available we will accept the loan advance amount as minimum. You must approve the policy on our behalf. The estimated property value is stated in the Mortgage Offer in remortgage cases. Otherwise it will be stipulated in the Valuation. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Sainsbury's Bank | An amount equal to the higher of the value of the property or the purchase price. |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Whistletree | The value of the property |
Non lender-specific considerations
The full terms, conditions and exclusions for good leasehold title indemnity insurance are identified in the policy document. Conveyancing solicitors are obliged to point your non-lender client to the good leasehold title indemnity insurance policy paperwork. Good Leasehold Title indemnity insurance is designed 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 in order. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Important aspects and benefits of good leasehold title indemnity insurance :
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 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.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, 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.
- All sums paid with the written consent of the insurance company to free the land from the risks specified in the good leasehold title policy.
- Reimbursement for compensation incurred in any action in respect of the risks specified in the good leasehold title indemnity insurance, including fees of a legal nature.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Market value reduction due to the successful enforcement of the risks specified in the good leasehold title insurance.
Don't forget to consider what is not included in the good leasehold title insurance e.g. does the policy cover any property that has been altered within the 12 months prior to the commencement of the policy? Are legal costs covered?
Good Leasehold Title Indemnity Insurance has limitations - Additional considerations
Good Leasehold Title 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 good leasehold title indemnity cover will not necessarily be the right solution. Information provided on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender 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.