Matrimonial Homes Act Indemnity Insurance Lender conveyancing requirements
Lloyds TSB and Nationwide, like the majority of lenders, have their own specific instructions when it comes to matrimonial homes act indemnity insurance. This page is designed to help property law practitioners on the various lender approved list of panel lawyers where the title to be charged contains matrimonial homes act. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each mortgage company, be it Santander, Bank of Scotland or Virgin Money. The content on this page Is not to be read as matrimonial homes act indemnity insurance advice.
Need help with matrimonial homes act indemnity insurance from your lender?
Skipton and Birmingham Midshires in common with most banks, instructions are such that where matrimonial homes act indemnity insurance is to be put on risk:
- the matrimonial homes act indemnity insurance policy should not incorporate terms which you know would void or prejudice the interests of the lender
- your practice must supply a copy of the matrimonial homes act indemnity insurance to the mortgagor and explain to the borrower why the matrimonial homes act indemnity insurance policy was effected and that a further policy may be mandatory if there is further lending against the mortgaged property
- your firm is obliged to disclose to the insurer all relevant information which you have obtained
- the matrimonial homes act indemnity insurance policy should be effected at no expense to the bank
- the matrimonial homes act indemnity insurance policy must be for the benefit of the lender and, wherever possible, in favour of the mortgagor and any subsequent registered proprietor or mortgage company. If the borrower will not be protected by the matrimonial homes act indemnity insurance policy, the mortgagor needs to be advised accordingly.
- the level of indemnity must meet the requirements for the lender (See Part II Handbook requirements )
- your practice must approve the terms of the matrimonial homes act policy on behalf of the lender
- you must point out to the mortgagor that the borrower is obliged to comply with any conditions of the matrimonial homes act indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in respect of the policy
| Lender | Requirement |
|---|---|
| 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. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Barnsley 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. |
| Birmingham Bank | Please contact Head of Operations to discuss (Gareth Allen) |
| Clydesdale Bank | Open market value of property. |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| ITL Mortgages | Minimum of the value of the property. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| Magellan Homeloans | At least equal to the value of the property |
| 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. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Scottish Widows | The value of the property. |
| Royal Bank of Scotland | An amount equal to the value of the property. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| RBS (One Account) | An amount equal to the value of the property. |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Matrimonial Homes Act Contingency Insurance : Reflections
The extent of the terms for matrimonial homes act indemnity insurance are explained in the policy paperwork. Conveyancing solicitors should direct your non-lender client to the matrimonial homes act indemnity insurance policy paperwork. Matrimonial Homes Act indemnity insurance is designed to afford indemnity in respect of the risks set out in the policy schedule - so you should check the document to ensure it is correct. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the matrimonial homes act indemnity insurance policy. It is well worth checking that the time frame is correct.Important features and benefits of matrimonial homes act Contingency 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. Matrimonial Homes Act indemnity insurance Policies should be checked for the following- Money paid with consent in writing from the insurance company to liberate the property from the risks specified in the matrimonial homes act policy.
- Reimbursement for compensation incurred in any action regarding the risks specified in the matrimonial homes act insurance, as well as fees of a legal nature.
- Market value reduction resulting from the successful enforcement of the risks specified in the matrimonial homes act policy.
- 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.
- Expenses for works (including professional fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the matrimonial homes act policy, to the extent that such costs are rendered abortive by court order.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
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 matrimonial homes act policy will be invalidated.
Further considerations for matrimonial homes act indemnity insurance
Matrimonial Homes Act insurance may satisfy lenders such as Halifax 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. Content on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company conveyancing panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the lender 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 matrimonial homes act 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 covers to properties in England and Wales.