Indemnity Insurance of Maisonette Mortgage Company conveyancing obligations
HSBC and Virgin Money, as with the majority of banks, set their own requirements when it comes to maisonette indemnity insurance. This page sets out to enlighten property law lawyers on the different mortgage company approved list of panel lawyers where the title for the the property to be mortgaged incorporates maisonette. Solicitors should still check the CML handbook requirements for each bank, whether it be Birmingham Midshires, Accord or Godiva Mortgages. The information on this page is not focused on maisonette indemnity insurance requirements.
Need help with maisonette indemnity insurance from your lender?
Bank of Scotland and Barnsley BS in common with many mortgage companies, instructions are such that where maisonette indemnity insurance is effected:
- your practice must provide 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 necessary if there is additional lending against the security of the property
- your practice must approve the terms of the maisonette policy on behalf of the bank
- the maisonette indemnity insurance policy must be placed on risk without charge to the mortgage company
- your practice is duty bound to point out to the borrower that the borrower is obliged to 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 respect of the insurance
- the minimum level of cover for the policy must satisfy the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- the maisonette indemnity insurance policy must not incorporate terms which you recognise would void or compromise the interests of the lender
- the maisonette indemnity insurance policy must be in favor of the bank and, wherever possible, for the benefit of the borrower and any next registered proprietor or bank. If the borrower will not be covered by the maisonette indemnity insurance policy, the mortgagor must be informed accordingly.
- you is required to reveal to the insurer all relevant information which you have acquired
| Lender | Requirement |
|---|---|
| Adam & Company | The open market value of the property according to the valuation report. |
| April Mortgages | An amount at least equal to the mortgage advance. |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Bradford & Bingley | Amount of loan + 15% |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Chelsea Building Society | 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 mortgagee. |
| Clydesdale Bank | Open market value of property. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| JPMorgan | 110% of principal sum. |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| NRAM Ltd | 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. |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Paragon Mortgages Ltd | An amount at least equal to the stated 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 |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| RBS - Virgin One | An amount equal to the value of the property. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
Maisonette Contingency Insurance : Reflections
The full terms, conditions and exclusions for maisonette indemnity insurance are explained in the policy paperwork. Property lawyers are obliged to point the borrower to the maisonette indemnity insurance policy itself. Maisonette Contingency insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so you should check any draft to ensure it is as it should be. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the maisonette indemnity insurance policy. Again, please check that this is as you expected.Significant aspects and benefits of maisonette Contingency 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- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Money paid with consent in writing from the insurance company to liberate the land from the risks specified in the maisonette insurance.
- Cover for compensation incurred in any action in respect of the risks specified in the maisonette insurance, as well as solicitors charges.
- 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.
- Diminution in value due to the successful enforcement of the risks specified in the maisonette policy.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the maisonette insurance, to the extent that such costs are rendered abortive by court decision.
You also need to be sure that the answers on the application form are correct. However remote the likelihood of a claim on the bank insurance policy might be you can be sure that the insurer will check the details on any proposal form very carefully before any claim is paid out.
Supplemental considerations for maisonette indemnity insurance
Maisonette 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 maisonette indemnity cover will not necessarily be the right solution. Content on this webpage is for general information for Regulated law firms 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 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 is in relation to properties in England and Wales.