Lender conveyancing panel conditions re Maisonette Indemnity Insurance
Bank of Scotland and Virgin Money, in common with most lenders, have their own requirements when it comes to maisonette indemnity insurance. This page is designed to help property law solicitors on the numerous mortgage company approved list of panel lawyers where the title for the the property to be mortgaged includes maisonette. It is not a alternative for checking the CML handbook requirements for each bank, be it RBS, Lloyds TSB or Leeds Building Society. The information on this page is not focused on maisonette indemnity insurance requirements.
Need help with maisonette indemnity insurance from your lender?
Coventry BS and Halifax like the majority of lenders, obligations require that where maisonette indemnity insurance is to be taken out:
- your firm are responsible for approving the terms of the maisonette policy on behalf of the bank
- the maisonette indemnity insurance policy must not contain conditions which you are aware would void or prejudice the interests of the bank
- the maisonette indemnity insurance policy should be placed on risk without charge to the lender
- the maisonette indemnity insurance policy needs to be for the benefit of the mortgage company and, if possible, in favour of the mortgagor and any next owner or mortgage company. Where the borrower will not be covered by the maisonette indemnity insurance policy, you must advise the mortgagor of this fact.
- your practice is duty bound to point out to the borrower that the borrower is obliged to adhere to any conditions of the maisonette indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in relation to the insurance
- your firm must send a duplicate of the maisonette indemnity insurance to the mortgagor and explain to the mortgagor why the maisonette indemnity insurance policy was effected and that additional insurance may be mandatory if there is supplemental borrowing against the mortgaged property
- your firm is obliged to disclose to the insurer all relevant information which you have gathered
- the level of indemnity must satisfy the requirements for the bank (See Part II Handbook requirements )
| 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 |
| 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. |
| Aviva Equity Release | Full value of the property. |
| Birmingham Bank | completions@birminghambank.com |
| Bluestone Mortgages | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Habito | Higher of purchase price or valuation |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Lloyds | The value of the property. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Progressive BS | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Royal Bank of Scotland -Natwest 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 |
| Whistletree | The value of the property |
| Yorkshire Bank | Open market value of property. |
Non lender-specific considerations
The extent of the terms for maisonette indemnity insurance are set out in the policy paperwork. Conveyancing solicitors should point your non-lender client to the maisonette indemnity insurance policy itself. Maisonette Contingency insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it is essential check the document to ensure it is as it should be. The lifetime of this non-investment insurance agreement is in perpetuity unless otherwise stated in the maisonette indemnity insurance policy. It is well worth checking that the time frame is correct.Significant characteristics and benefits of maisonette indemnity insurance :
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the maisonette indemnity insurance schedule. Maisonette indemnity insurance Cover normally includes- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the maisonette policy.
- The out of pocket expenses 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.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Reimbursement for compensation incurred in any proceedings in respect of the risks specified in the maisonette policy, as well as legal and associated costs.
- Expenses for works (including professional fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the maisonette policy, 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 maisonette policy.
You also need to be sure that the answers on the application form are accurate. However remote the likelihood of a claim on the lender insurance policy might be you can certain that the insurer will check the details on any proposal form very carefully prior to any claim being paid out.
Maisonette Indemnity Insurance has limitations - Supplemental considerations
Maisonette insurance may satisfy lenders such as Godiva Mortgages or Chelsea BS and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the bank conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company 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 maisonette 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.