Maisonette Indemnity Insurance Mortgage Company conveyancing requirements
Natwest and Godiva Mortgages, like most lenders, dictate their own requirements when it comes to maisonette indemnity insurance. The content herein aims to help conveyancing lawyers on the numerous lender conveyancing panel where the title to be charged includes maisonette. Solicitors should still check the CML handbook requirements for each bank, whether it be Virgin Money, Yorkshire Building Society or Barnsley BS. The content on this page Is not to be read as maisonette indemnity insurance advice.
Need help with maisonette indemnity insurance from your lender?
HSBC and Barclays like many mortgage companies, obligations require that where maisonette indemnity insurance is to be put on risk:
- your practice 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 might be mandatory if there is additional borrowing against the security of the property
- the level of indemnity must meet the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- your practice is duty bound to explain to the borrower that the borrower will need 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 respect of the policy
- the maisonette indemnity insurance policy should be placed on risk at no expense to the lender
- the maisonette indemnity insurance policy should always be in favor of the mortgage company and, wherever possible, in favour of the borrower and any next owner or mortgagee. If the borrower will not be covered by the maisonette indemnity insurance policy, you must advise the mortgagor of this fact.
- your firm must approve the terms of the maisonette policy on behalf of the mortgage company
- your firm is required to reveal to the insurer all relevant information which you have acquired
- the maisonette indemnity insurance policy must not contain terms which you know 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. |
| 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. |
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| Britannia | Cover to the full value of the property. |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Godiva Mortgages | Minimum of the value of the property. |
| Habito | Higher of purchase price or valuation |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| Lloyds | The value of the property. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Reliance Bank | \xA31,000,000.00 |
| Scottish Building Society | Amount of mortgage plus 25%. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| 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 |
Maisonette Contingency Insurance : Reflections
The extent of the terms for maisonette indemnity insurance are shown in the policy document. Property lawyers are obliged to direct the borrower to the maisonette indemnity insurance policy document. Maisonette indemnity insurance is devised to provide 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 lifetime of this non-investment insurance agreement is in perpetuity unless otherwise stated in the maisonette indemnity insurance policy. Adequacy in this regard should be checked.Maisonette Contingency insurance: Significant features 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. Maisonette indemnity insurance Cover normally includes- Cover for compensation incurred in any proceedings in respect of the risks specified in the maisonette insurance, as well as fees of a legal nature.
- Market value reduction due to the successful enforcement of the risks specified in the maisonette policy.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the maisonette insurance.
- Expenses for works (including professional fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the maisonette insurance, to the extent that such costs are rendered abortive by court order.
- The cost 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.
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 maisonette policy will be invalidated.
Supplemental considerations for maisonette indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from maisonette insurance may be adequate for your client. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the mortgage company solicitor 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 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 above information is in relation to properties in England and Wales.