Indemnity Insurance of Lack of Building Regulation Consent Bank conveyancing requirements
Barnsley BS and Natwest, like most lenders, dictate their own requirements when it comes to lack of building regulation consent indemnity insurance. The content herein aims to help conveyancing practitioners on the different lender approved list of panel lawyers where the title for the the property to be mortgaged contains lack of building regulation consent. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each lender, for example Birmingham Midshires, Coventry BS or Yorkshire Building Society. The information on this page is not focused on lack of building regulation consent indemnity insurance requirements.
Need help with lack of building regulation consent indemnity insurance from your lender?
Yorkshire Bank Home Loans and RBS like most lenders, obligations require that where lack of building regulation consent indemnity insurance is to be put on risk:
- the minimum level of cover for the policy must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the lack of building regulation consent indemnity insurance policy must be effected without charge to the lender
- the lack of building regulation consent indemnity insurance policy should not contain terms which you are aware would void or compromise the interests of the mortgage company
- the lack of building regulation consent indemnity insurance policy should always be for the benefit of the mortgage company and, wherever possible, for the benefit of the mortgagor and any future registered proprietor or mortgagee. Where the mortgagor will not be covered by the lack of building regulation consent indemnity insurance policy, the mortgagor needs to be advised accordingly.
- you must point out to the borrower that the borrower must adhere to any conditions of the lack of building regulation consent indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in relation to the policy
- your firm are responsible for approving the terms of the lack of building regulation consent policy on behalf of the lender
- your practice must reveal to the insurer all relevant information which you have acquired
- your firm must send a duplicate of the lack of building regulation consent indemnity insurance to the borrower and explain to the borrower why the lack of building regulation consent indemnity insurance policy was effected and that additional insurance might be required if there is supplemental borrowing against the security of the property
| Lender | Requirement |
|---|---|
| Aldermore Bank | 110% of the purchase price or valuation, whichever is greater. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). Where a property is being sold at undervalue and an equity gift is being provided, the conveyancer must ensure the seller obtains an Insolvency Act Indemnity Insurance Policy and provides evidence to you, so that you are comfortable an appropriate policy is in place to Aldermore’s satisfaction. This indemnity insurance aims to cover Aldermore against any future claims by creditors of the seller that may challenge the sale. |
| Bank of Ireland | The limit of indemnity must be an amount not less than the market value of the property. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Hampden | The open market value of the property according to the valuation report. |
| ITL Mortgages | Minimum of the value of the property. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Metro Bank | The open market value of the property according to the valuation report. |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Saffron Building Society | Higher of purchase price or valuation. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage and also the borrower(s). |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| RBS - Virgin One | An amount equal to the value of the property. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
| Yorkshire Bank | Open market value of property. |
Non lender-specific considerations
The full terms, conditions and exclusions for lack of building regulation consent indemnity insurance are explained in the policy document. Property lawyers are obliged to point your non-lender client to the lack of building regulation consent indemnity insurance policy paperwork. The intention of lack of building regulation consent indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so you should check the schedule to determine that it is correct. The continuance of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Lack of Building Regulation Consent indemnity insurance: Important 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. Lack of Building Regulation Consent indemnity insurance Cover normally includes- 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 started, prior to proceedings for the enforcement of the risks specified in the lack of building regulation consent insurance, to the extent that such costs are rendered abortive by court order.
- Diminution in value resulting from the successful enforcement of the risks specified in the lack of building regulation consent indemnity insurance.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Cover for compensation incurred in any action in respect of the risks specified in the lack of building regulation consent indemnity insurance, as well as solicitors charges.
- Money paid with the written consent of the insurance company to free the property from the risks specified in the lack of building regulation consent insurance.
Always consider what is not included in the lack of building regulation consent policy e.g. does the policy cover any residence that has been altered within the 12 months prior to the policy being put on risk? Does it cover legal costs?
Additional considerations for lack of building regulation consent indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from lack of building regulation consent 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 bank approved 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 lack of building regulation consent 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.