Lack of Building Regulation Consent Indemnity Insurance Mortgage Company conveyancing requirements

Santander and Halifax, as with the majority of mortgage companies, set their own requirements when it comes to lack of building regulation consent indemnity insurance. The purpose of this page to assist property law solicitors on the various lender approved list of panel lawyers where the title to be charged contains lack of building regulation consent. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, whether it be Birmingham Midshires, Yorkshire Building Society or Nationwide. The content 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?

---

HSBC and Accord in common with many lenders, instructions are such that where lack of building regulation consent indemnity insurance is effected:

• the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
• your practice must send 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 a further policy may be necessary if there is supplemental lending against the security of the property
• you is obliged to reveal to the insurer all relevant information which you have acquired
• your firm are responsible for approving the terms of the lack of building regulation consent policy on behalf of the bank
• your firm must spell out to the mortgagor that the borrower is obliged 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 needs to be for the benefit of the mortgage company and, if possible, in favour of the borrower and any future registered proprietor or mortgagee. If the borrower will not be protected by the lack of building regulation consent indemnity insurance policy, you must advise the mortgagor of this fact.
• 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 must not incorporate terms that you recognise would invalidate or prejudice the interests of the bank

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 Paragraph 9.2 of the Part 2 requirements for banks:

Non lender-specific considerations

The extent of the terms for lack of building regulation consent indemnity insurance are set out in the policy document. Conveyancing solicitors are obliged to point your non-lender client to the lack of building regulation consent indemnity insurance policy itself. 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 as it should be. The lifetime of this non-investment insurance contract 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.

---

Lack of Building Regulation Consent Contingency insurance: Important characteristics 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

• All sums 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.
• Reimbursement for compensation incurred in any proceedings concerning the risks specified in the lack of building regulation consent indemnity insurance, including solicitors charges.
• 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 insurance company
• Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development commenced, 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.
• The out of pocket expenses 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.

---

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 be invalidated.

---

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 insurance which are not adequately covered by financial compensation.

---

The above information covers to properties in England and Wales.