Bank conveyancing panel conditions re Mining and Mineral Rights Indemnity Insurance
Coventry BS and Nationwide, like the majority of mortgage companies, dictate their own requirements when it comes to mining and mineral rights indemnity insurance. The purpose of this page to assist conveyancing practitioners on the numerous mortgage company conveyancing panel where the title to be charged contains mining and mineral rights. It is not a substitute for checking the CML handbook requirements for each bank, whether it be Skipton, Santander or Natwest. The content on this page is not focused on mining and mineral rights indemnity insurance requirements.
Need help with mining and mineral rights indemnity insurance from your lender?
RBS and Yorkshire Building Society like most mortgage companies, requirements are that where mining and mineral rights indemnity insurance is effected:
- the limit of indemnity must satisfy the requirements for the bank (See Part II Handbook requirements )
- the mining and mineral rights indemnity insurance policy should always be in favor of the lender and, if possible, in favour of the mortgagor and any next registered proprietor or mortgagee. Where the borrower will not be covered by the mining and mineral rights indemnity insurance policy, the mortgagor must be advised accordingly.
- your firm is duty bound to spell out to the mortgagor that the borrower must adhere to any conditions of the mining and mineral rights indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the insurance
- your practice must disclose to the insurer all relevant information which you have obtained
- the mining and mineral rights indemnity insurance policy must not incorporate terms which you are aware would invalidate or compromise the interests of the bank
- your firm must provide a duplicate of the mining and mineral rights indemnity insurance to the borrower and explain to the borrower why the mining and mineral rights indemnity insurance policy was effected and that a further policy may be necessary if there is supplemental lending against the security of the property
- your firm must approve the terms of the mining and mineral rights policy on behalf of the lender
- the mining and mineral rights indemnity insurance policy should be effected without cost to the mortgage company
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Clydesdale Bank | Open market value of property. |
| Coventry Building Society | Minimum of the value of the property. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| HSBC UK Bank | The value of the insurance must be for at least the full value of the property |
| Habito | Higher of purchase price or valuation |
| Harpenden Building Society | 110% of mortgage advance |
| ITL Mortgages | Minimum of the value of the property. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Lloyds | The value of the property. |
| Masthaven Bank | 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. |
| 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. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| 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. |
| Reliance Bank | \xA31,000,000.00 |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
General Mining and Mineral Rights indemnity insurance points to consider
The full terms, conditions and exclusions for mining and mineral rights indemnity insurance are shown in the policy paperwork. Conveyancing Practitioners should point your non-lender client to the mining and mineral rights indemnity insurance policy paperwork. The intention of mining and mineral rights indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so it’s important to check any draft to ensure it is correct. The continuance of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Mining and Mineral Rights Contingency insurance: Important characteristics and benefits:
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. Mining and Mineral Rights indemnity insurance Cover normally includes- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Reimbursement for compensation incurred in any action regarding the risks specified in the mining and mineral rights policy, as well as incurred costs and expenses.
- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the mining and mineral rights insurance.
- Expenses for 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 mining and mineral rights indemnity insurance, to the extent that such costs are rendered abortive by court order.
- The cost 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.
- Loss in market value due to the successful enforcement of the risks specified in the mining and mineral rights insurance.
Always check what is not included in the mining and mineral rights insurance e.g. does the policy cover any residence that has been altered within the 12 months prior to the commencement of the policy? Are legal costs covered?
Supplemental considerations for mining and mineral rights indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from mining and mineral rights insurance may be adequate for your client. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender conveyancing 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 mining and mineral rights 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.