Indemnity Insurance of Lack of Building Regulation Consent Bank conveyancing instructions

Yorkshire Building Society and Bank of Scotland, in common with the majority of banks, dictate their own specific instructions when it comes to lack of building regulation consent indemnity insurance. This page is designed to help property law firms on the various mortgage company conveyancing panel where the title for the the property to be mortgaged incorporates lack of building regulation consent. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, be it HSBC, Natwest or Coventry BS. The content on this page Is not to be read as lack of building regulation consent indemnity insurance advice.

Need help with lack of building regulation consent indemnity insurance from your lender?

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Skipton and Accord as with most mortgage companies, obligations require that where lack of building regulation consent indemnity insurance is to be put on risk:

• you must explain to the mortgagor that the borrower will need to adhere to any conditions of the lack of building regulation consent indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the policy
• the lack of building regulation consent indemnity insurance policy must not contain terms that you are aware would void or compromise the interests of the mortgage company
• your firm must reveal to the insurer all relevant information which you have obtained
• your firm must approve the terms of the lack of building regulation consent policy on behalf of the mortgage company
• the lack of building regulation consent indemnity insurance policy should be effected without charge to the lender
• your firm must supply a copy of the lack of building regulation consent indemnity insurance to the mortgagor and explain to the borrower why the lack of building regulation consent indemnity insurance policy was effected and that additional insurance may be necessary if there is additional lending against the security of the property
• the minimum level of cover for the policy must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
• the lack of building regulation consent indemnity insurance policy must be in favor of the bank and, wherever possible, in favour of the borrower and any future registered proprietor or bank. If the mortgagor will not be covered by the lack of building regulation consent indemnity insurance policy, you must advise the borrower of this fact.

Regarding the extent of cover for the lack of building regulation consent indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Section 9.2 of the CML handbook PII requirements for banks:

Lack of Building Regulation Consent Contingency Insurance : Reflections

The extent of the terms for lack of building regulation consent indemnity insurance are shown in the policy document. Conveyancing Practitioners should point the borrower to the lack of building regulation consent indemnity insurance policy document. Lack of Building Regulation Consent indemnity insurance is devised to afford 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 agreement is in perpetuity unless otherwise stated in the lack of building regulation consent indemnity insurance policy. It is well worth checking that the time frame is correct.

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Significant aspects and benefits of lack of building regulation consent indemnity insurance :

The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the lack of building regulation consent indemnity insurance schedule. Lack of Building Regulation Consent indemnity insurance Policies should be checked for the following

• All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
• The cost of works (including architects’ and surveyors’ fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the lack of building regulation consent indemnity insurance, to the extent that such costs are rendered abortive by court order.
• Money paid with the written consent of the insurance company to liberate the property from the risks specified in the lack of building regulation consent policy.
• The cost of altering or taking down 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.
• Liability for damages or compensation incurred in any proceedings in respect of the risks specified in the lack of building regulation consent indemnity insurance, as well as fees of a legal nature.
• Market value reduction resulting from the successful enforcement of the risks specified in the lack of building regulation consent policy.

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As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the lack of building regulation consent policy will not be valid.

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Lack of Building Regulation Consent Indemnity Insurance has limitations - Further considerations

There may be consequences arising from the enforcement of the risks identified in the lack of building regulation consent indemnity insurance which are not adequately covered by financial compensation.

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The above information covers to properties in England and Wales.