Bank conveyancing panel requirements re Lack of Consent Indemnity Insurance
Godiva Mortgages and Accord, in common with many lenders, dictate their own requirements when it comes to lack of consent indemnity insurance. The purpose of this page to assist property law firms on the various lender approved list of panel lawyers where the title to be charged includes lack of consent. It is not a substitute for checking the CML handbook requirements for each lender, whether it be Barnsley BS, Skipton or Yorkshire Bank Home Loans. The content on this page is not focused on lack of consent indemnity insurance requirements.
Need help with lack of consent indemnity insurance from your lender?
Halifax and Natwest like many lenders, obligations require that where lack of consent indemnity insurance is effected:
- your firm must supply a copy of the lack of consent indemnity insurance to the borrower and explain to the mortgagor why the lack of consent indemnity insurance policy was effected and that a further policy may be mandatory if there is additional lending against the mortgaged property
- your firm are responsible for approving the terms of the lack of consent policy on behalf of the mortgage company
- you must point out to the borrower that the borrower is obliged to adhere to any conditions of the lack of consent indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in respect of the insurance
- the lack of consent indemnity insurance policy must be for the benefit of the mortgage company and, wherever possible, in favour of the mortgagor and any future owner or bank. Where the mortgagor will not be covered by the lack of consent indemnity insurance policy, you must advise the borrower of this fact.
- your firm must reveal to the insurer all relevant information which you have gathered
- the lack of consent indemnity insurance policy should be placed on risk at no cost to the mortgage company
- the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- the lack of consent indemnity insurance policy should not contain terms which you recognise would void or prejudice the interests of the lender
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Bradford & Bingley | Amount of loan + 15% |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| 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. |
| ITL Mortgages | Minimum of the value of the property. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| 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. |
| Lloyds | The value of the property. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Platform | 110% of principal sum. |
| 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. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| RBS (One Account) | An amount equal to the value of the property. |
Non lender-specific considerations
The full terms, conditions and exclusions for lack of consent indemnity insurance are shown in the policy document. Conveyancing solicitors should direct your non-lender client to the lack of consent indemnity insurance policy paperwork. The intention of lack of consent indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so it’s important to check any draft to ensure it is correct. 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.Lack of Consent indemnity insurance: Significant aspects and benefits:
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Lack of Consent indemnity insurance Policies are likely to cover the following- The out of pocket expenses of altering or demolishing 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 professional fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the lack of consent indemnity insurance, to the extent that such costs are rendered abortive by court order.
- Market value reduction resulting from the successful enforcement of the risks specified in the lack of consent policy.
- Cover for compensation incurred in any action concerning the risks specified in the lack of consent policy, as well as incurred costs and expenses.
- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the lack of consent indemnity insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
Due diligence should extend to checking that the answers on the application form are accurate. Regardless of how remote a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form very carefully before any claim is admitted.
Other considerations for lack of consent indemnity insurance
Lack of Consent 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 lack of consent indemnity cover will not necessarily be the answer. Content on this webpage is for general information for conveyancers and solicitors 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 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 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 is in relation to properties in England and Wales.