Maisonette Indemnity Insurance Bank conveyancing requirements
Coventry BS and Barclays, like many mortgage companies, set their own specific instructions when it comes to maisonette indemnity insurance. The purpose of this page to assist conveyancing solicitors on the numerous bank approved list of panel lawyers where the title for the the property to be mortgaged contains maisonette. Solicitors should still check the CML handbook requirements for each lender, whether it be Leeds Building Society, Skipton or Barnsley BS. The information on this page is not focused on maisonette indemnity insurance requirements.
Need help with maisonette indemnity insurance from your lender?
Santander and Bank of Scotland as with the majority of mortgage companies, requirements are that where maisonette indemnity insurance is to be taken out:
- your practice is required to reveal to the insurer all relevant information which you have obtained
- you must supply a duplicate of the maisonette indemnity insurance to the mortgagor and explain to the borrower why the maisonette indemnity insurance policy was effected and that additional insurance could be mandatory if there is further borrowing against the security of the property
- the limit of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the maisonette indemnity insurance policy should be placed on risk without expense to the lender
- the maisonette indemnity insurance policy must not contain conditions which you recognise would void or compromise the interests of the lender
- your practice must explain to the borrower that the borrower must comply with 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
- the maisonette indemnity insurance policy must be for the benefit of the mortgage company and, if possible, for the benefit of the borrower and any next owner or mortgage company. Where the borrower will not be protected by the maisonette indemnity insurance policy, the borrower should be informed accordingly.
- you are responsible for approving the terms of the maisonette policy on behalf of the bank
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Bank of Ireland Mortgages | The limit of indemnity must be an amount not less than the market value of the property. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| DB UK Bank | An amount at least equal to the mortgage advance or credit limit, whichever the higher. The policy must be assignable |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| Metro Bank | The open market value of the property according to the valuation report. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Molo Finance Buy to Let | An amount at least equal to the amount of the mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgages. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Mortgage Express | Amount of loan + 15% |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Pepper Money (UK) | An amount equal to at least 110% of 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 and also the borrower(s). |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS - Virgin One | An amount equal to the value of the property. |
Non lender-specific considerations
The full terms, conditions and exclusions for maisonette indemnity insurance are explained in the policy paperwork. Conveyancing solicitors should direct the borrower to the maisonette indemnity insurance policy itself. The intention of maisonette indemnity insurance is to grant indemnity in respect of the risks set out in the policy schedule - so you should check any draft to determine that it is in order. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Significant characteristics and benefits of maisonette indemnity insurance :
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. Maisonette indemnity insurance Policies are likely to cover the following- Loss in market value due to the successful enforcement of the risks specified in the maisonette indemnity insurance.
- 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.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the maisonette indemnity insurance, to the extent that such costs are rendered abortive by court order.
- All sums paid with the written consent of the insurance company to liberate the property from the risks specified in the maisonette policy.
- Cover for compensation incurred in any proceedings in respect of the risks specified in the maisonette insurance, including fees of a legal nature.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
Always check what is excluded from the maisonette insurance e.g. does the policy cover any residence that has been altered within the 12 months prior to the policy being put on risk? Does it cover legal costs?
Maisonette Indemnity Insurance has limitations - Additional considerations
There may be consequences arising from the enforcement of the risks identified in the maisonette insurance which are not adequately covered by financial compensation. Content on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company approved 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.