Lender conveyancing panel requirements re Matrimonial Homes Act Indemnity Insurance
Leeds Building Society and Virgin Money, as with the majority of banks, dictate their own specific instructions when it comes to matrimonial homes act indemnity insurance. The content herein aims to help property law practitioners on the different lender conveyancing panel where the title for the the property to be mortgaged incorporates matrimonial homes act. Solicitors should still check the CML handbook requirements for each mortgage company, for example Coventry BS, Yorkshire Building Society or Barnsley BS. 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?
Skipton and Natwest like the majority of lenders, requirements are that where matrimonial homes act indemnity insurance is to be put on risk:
- the minimum level of cover for the policy must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- you are responsible for approving the terms of the matrimonial homes act policy on behalf of the lender
- your firm is required to disclose to the insurer all relevant information which you have gathered
- the matrimonial homes act indemnity insurance policy should not contain conditions which you are aware would void or prejudice the interests of the lender
- the matrimonial homes act indemnity insurance policy must be effected at no cost to the mortgage company
- the matrimonial homes act indemnity insurance policy needs to be in favor of the lender and, wherever possible, in favour of the borrower and any subsequent registered proprietor or bank. If the mortgagor will not be covered by the matrimonial homes act indemnity insurance policy, the mortgagor should be informed accordingly.
- you is duty bound to point out to the borrower that the borrower must adhere to 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 relation to the policy
- you must provide a duplicate of the matrimonial homes act indemnity insurance to the borrower and explain to the borrower why the matrimonial homes act indemnity insurance policy was effected and that a further policy might be mandatory if there is further borrowing against the security of the property
| Lender | Requirement |
|---|---|
| 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 (Jackie Burchill) |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| 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 |
| 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. |
| Gen H | An amount equal to the value of the property unless specifically agreed in writing otherwise. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Halifax | An amount at least equal to the mortgage advance. |
| Hampden | The open market value of the property according to the valuation report. |
| Holmesdale Building Society | 110% |
| Investec | The open market value of the property according to the valuation report. |
| Magellan Homeloans | At least equal to the value of the property |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Principality Building Society | Full market value of the property is preferred but if this is not available we will accept the loan advance amount as minimum. You must approve the policy on our behalf. The estimated property value is stated in the Mortgage Offer in remortgage cases. Otherwise it will be stipulated in the Valuation. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
| Whistletree | 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. |
Non lender-specific considerations
The extent of the terms for matrimonial homes act indemnity insurance are set out in the policy document. Conveyancing Practitioners are obliged to direct the borrower to the matrimonial homes act indemnity insurance policy paperwork. The intention of matrimonial homes act indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check the schedule to ensure it is correct. The continuance of this non-investment insurance contract is in perpetuity unless otherwise stated in the matrimonial homes act indemnity insurance policy. Adequacy in this regard should be checked.Matrimonial Homes Act Contingency insurance: Important 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. Matrimonial Homes Act indemnity insurance Policies are likely to cover the following- Loss in market value due to the successful enforcement of the risks specified in the matrimonial homes act indemnity insurance.
- The cost of works (including architects’ and surveyors’ 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 indemnity insurance, to the extent that such costs are rendered abortive by court order.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- 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.
- Money paid with the written consent of the insurance company to free the land from the risks specified in the matrimonial homes act indemnity insurance.
- Cover for compensation incurred in any proceedings concerning the risks specified in the matrimonial homes act insurance, as well as solicitors charges.
Don't forget to check what is excluded from the matrimonial homes act indemnity insurance e.g. does the policy cover any property that has been altered within the year prior to the policy being put on risk? Does it cover legal costs?
Other considerations for matrimonial homes act indemnity insurance
Matrimonial Homes Act insurance may satisfy lenders such as Accord or Yorkshire Bank Home Loans 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 Regulated law firms in England and Wales on the the bank conveyancing 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.