Indemnity Insurance of Matrimonial Homes Act Lender conveyancing instructions
Barnsley BS and Yorkshire Bank Home Loans, in common with the majority of banks, set their own specific instructions when it comes to matrimonial homes act indemnity insurance. The purpose of this page to assist property law solicitors on the different mortgage company approved list of panel lawyers where the title for the the property to be mortgaged contains matrimonial homes act. It is not a alternative for checking the CML handbook requirements for each bank, be it Chelsea BS, Coventry BS or Lloyds TSB. The information on this page is not focused on matrimonial homes act indemnity insurance requirements.
Need help with matrimonial homes act indemnity insurance from your lender?
Nationwide and Leeds Building Society as with many mortgage companies, instructions are such that where matrimonial homes act indemnity insurance is to be put on risk:
- the matrimonial homes act indemnity insurance policy should always be in favor of the lender and, if possible, in favour of the mortgagor and any future registered proprietor or mortgage company. If the mortgagor will not be protected by the matrimonial homes act indemnity insurance policy, the borrower must be informed accordingly.
- your practice must provide 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 could be required if there is supplemental lending against the security of the property
- the matrimonial homes act indemnity insurance policy should be effected at no cost to the bank
- your practice are responsible for approving the terms of the matrimonial homes act policy on behalf of the mortgage company
- your firm must explain to the mortgagor that the borrower must comply with any conditions of the matrimonial homes act indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the policy
- the matrimonial homes act indemnity insurance policy must not incorporate terms which you are aware would invalidate or compromise the interests of the mortgage company
- the limit of indemnity must satisfy the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
- your practice is obliged to reveal to the insurer all relevant information which you have gathered
| Lender | Requirement |
|---|---|
| Bluestone Mortgages | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| Britannia | Cover to the full value of the property. |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Coventry Building Society | Minimum of the value of the property. |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| Hampden | The open market value of the property according to the valuation report. |
| 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. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| 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. |
| Lloyds | The value of the property. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| Saffron Building Society | Higher of purchase price or valuation. 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). |
| Scottish Building Society | Amount of mortgage plus 25%. |
| TSB | The value of the property |
| Royal Bank of Scotland -Natwest One | 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. |
General Matrimonial Homes Act indemnity insurance points to consider
The full terms, conditions and exclusions for matrimonial homes act indemnity insurance are set out in the policy document. Conveyancing solicitors should point the borrower to the matrimonial homes act indemnity insurance policy document. The intention of matrimonial homes act indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so it is essential check any draft to ensure it is correct. The lifetime 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.Matrimonial Homes Act indemnity insurance: Important characteristics 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. Matrimonial Homes Act indemnity insurance Cover normally includes- Reimbursement for compensation incurred in any action concerning the risks specified in the matrimonial homes act indemnity insurance, including solicitors charges.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development started, prior to 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 decision.
- All sums paid with consent in writing from the insurance company to free the property from the risks specified in the matrimonial homes act indemnity insurance.
- 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.
- Loss in market value due to the successful enforcement of the risks specified in the matrimonial homes act policy.
Don't forget to check what is not included in the matrimonial homes act policy e.g. does the policy cover any property that has been altered within the 12 months prior to the policy being put on risk? Does it cover legal costs?
Additional considerations for matrimonial homes act indemnity insurance
Matrimonial Homes Act insurance may satisfy lenders such as Barclays or Skipton 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. Information contained within 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 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 is in relation to properties in England and Wales.