Indemnity Insurance of Lack of Building Regulation Consent Mortgage Company conveyancing instructions
Yorkshire Bank Home Loans and Coventry BS, like the majority of mortgage companies, have their own requirements when it comes to lack of building regulation consent indemnity insurance. The content herein aims to help conveyancing firms on the various bank solicitors panel where the title to be charged incorporates lack of building regulation consent. Lawyers are advised to familiarise themselves with the CML handbook requirements for each lender, be it Barclays, Halifax or Lloyds TSB. 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?
RBS and Skipton as with many lenders, requirements are that where lack of building regulation consent indemnity insurance is effected:
- the lack of building regulation consent indemnity insurance policy must be for the benefit of the mortgage company and, if possible, for the benefit of the borrower and any subsequent owner or bank. Where the mortgagor will not be covered by the lack of building regulation consent indemnity insurance policy, you must advise the borrower of this fact.
- you is obliged to reveal to the insurer all relevant information which you have obtained
- your practice 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 must be placed on risk without charge to the mortgage company
- you must supply a copy 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 a further policy might be mandatory if there is additional borrowing against the mortgaged property
- your practice is duty bound to explain to the mortgagor that the borrower must adhere to any conditions of the lack of building regulation consent indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the insurance
- the limit of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the lack of building regulation consent indemnity insurance policy must not contain conditions that you recognise would invalidate or compromise the interests of the mortgage company
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| DB UK Bank | An amount at least equal to the mortgage advance or credit limit, whichever the higher. The policy must be assignable |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Investec | The open market value of the property according to the valuation report. |
| JPMorgan | 110% of principal sum. |
| Magellan Homeloans | At least equal to the value of the property |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| 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). |
| Secure Trust Bank | An amount at least equal to the market value. 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). |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| RBS - Direct Line One | An amount equal to the value of the property. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
General Lack of Building Regulation Consent indemnity insurance points to consider
The extent of the terms for lack of building regulation consent indemnity insurance are identified in the policy document. Conveyancing solicitors are obliged to point your non-lender client to the lack of building regulation consent indemnity insurance policy document. Lack of Building Regulation Consent indemnity insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so it’s important to check the document to ensure it is in order. The lifetime 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.Significant aspects and benefits of lack of building regulation consent indemnity insurance :
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 Policies are likely to cover the following- 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.
- 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.
- Market value reduction resulting from the successful enforcement of the risks specified in the lack of building regulation consent policy.
- Cover for compensation incurred in any action regarding the risks specified in the lack of building regulation consent insurance, as well as solicitors charges.
- 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 policy, to the extent that such costs are rendered abortive by court decision.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
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.
Further considerations for lack of building regulation consent indemnity insurance
Lack of Building Regulation Consent Indemnity insurance isn’t a solution to all of the relevant problems. Content on this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing 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 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 above information is in relation to properties in England and Wales.