Lender conveyancing panel conditions re Maisonette Indemnity Insurance

Nationwide and Chelsea BS, like many banks, dictate their own requirements when it comes to maisonette indemnity insurance. The purpose of this page to assist conveyancing practitioners on the numerous mortgage company conveyancing panel where the title to be charged incorporates maisonette. Lawyers are advised to familiarise themselves with the CML handbook requirements for each lender, whether it be Leeds Building Society, Natwest or Coventry 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?

---

Barnsley BS and Skipton like many banks, requirements are that where maisonette indemnity insurance is effected:

• the maisonette indemnity insurance policy should not incorporate conditions which you recognise would invalidate or prejudice the interests of the lender
• the maisonette indemnity insurance policy should always be in favor of the bank and, wherever possible, for the benefit of the borrower and any future owner or mortgagee. Where the mortgagor will not be covered by the maisonette indemnity insurance policy, the mortgagor needs to be informed accordingly.
• the limit of indemnity must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
• you is duty bound to explain 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 mortgage company of any notice or potential claim in respect of the insurance
• you must provide 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 a further policy may be necessary if there is additional borrowing against the security of the property
• the maisonette indemnity insurance policy must be effected without cost to the bank
• your firm is required to disclose to the insurer all relevant information which you have acquired
• your practice must approve the terms of the maisonette policy on behalf of the bank

As to the level of cover for the maisonette indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Section 9.2 of the Part 2 requirements for mortgage companies:

Non lender-specific considerations

The extent of the terms for maisonette indemnity insurance are set out in the policy paperwork. Conveyancing Practitioners should direct the borrower to the maisonette indemnity insurance policy paperwork. The intention of maisonette indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so it is essential check any draft to ensure it is as it should be. The continuance 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.

---

Important features and benefits of maisonette 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. Maisonette indemnity insurance Policies are likely to cover the following

• Money paid with consent in writing from the insurance company to free the property from the risks specified in the maisonette policy.
• Reimbursement for compensation incurred in any proceedings concerning the risks specified in the maisonette indemnity insurance, including fees of a legal nature.
• Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, 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.
• The out of pocket expenses 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.
• All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
• Market value reduction due to the successful enforcement of the risks specified in the maisonette insurance.

---

You also need to be sure 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 met.

---

Supplemental considerations for maisonette indemnity insurance

Maisonette insurance may satisfy lenders such as Yorkshire Bank Home Loans or Godiva Mortgages 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.

---

The above information covers to properties in England and Wales.