Bank conveyancing panel requirements re Mining and Mineral Rights Indemnity Insurance
Yorkshire Building Society and Santander, in common with the majority of lenders, set their own specific instructions when it comes to mining and mineral rights indemnity insurance. This page is designed to help residential conveyancing firms on the various bank approved list of panel lawyers where the title for the the property to be mortgaged contains mining and mineral rights. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each lender, for example Bank of Scotland, RBS or Leeds Building Society. 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?
HSBC and Yorkshire Bank Home Loans in common with the majority of banks, requirements are that where mining and mineral rights indemnity insurance is to be put on risk:
- your practice must disclose to the insurer all relevant information which you have gathered
- you must send a duplicate of the mining and mineral rights indemnity insurance to the mortgagor and explain to the borrower why the mining and mineral rights indemnity insurance policy was effected and that a further policy could be mandatory if there is further borrowing against the mortgaged property
- the limit of indemnity must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- you must approve the terms of the mining and mineral rights policy on behalf of the lender
- your practice must point out to the borrower that the borrower is obliged to comply with any conditions of the mining and mineral rights indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the insurance
- the mining and mineral rights indemnity insurance policy needs to be for the benefit of the lender and, wherever possible, for the benefit of the mortgagor and any subsequent owner or mortgage company. If the mortgagor will not be protected by the mining and mineral rights indemnity insurance policy, the borrower needs to be informed accordingly.
- the mining and mineral rights indemnity insurance policy should not contain terms which you know would void or compromise the interests of the bank
- the mining and mineral rights indemnity insurance policy must be placed on risk at no expense to the bank
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| 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. |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Coventry Building Society | Minimum of the value of the property. |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| 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. |
| National Counties Building Society | An amount at least equal to the mortgage advance. |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Perenna | The higher of the purchase price or valuation. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS- First Active | An amount equal to the value of the property. |
General Mining and Mineral Rights indemnity insurance points to consider
The full terms, conditions and exclusions for mining and mineral rights indemnity insurance are identified in the policy document. Conveyancing Practitioners should direct your non-lender client to the mining and mineral rights indemnity insurance policy itself. Mining and Mineral Rights Contingency insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check the document to ensure it is in order. The duration of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Significant features and benefits of mining and mineral rights indemnity 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. Mining and Mineral Rights indemnity insurance Cover normally includes- Cover for compensation incurred in any proceedings in respect of the risks specified in the mining and mineral rights policy, as well as incurred costs and expenses.
- Expenses for works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the mining and mineral rights policy, to the extent that such costs are rendered abortive by court decision.
- Market value reduction resulting from the successful enforcement of the risks specified in the mining and mineral rights insurance.
- 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 consent in writing from the insurance company to free the land from the risks specified in the mining and mineral rights indemnity insurance.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
Always check what is not included in the mining and mineral rights indemnity insurance e.g. does the policy cover any property that has been altered within the 12 months prior to the policy being put on risk? Are legal costs covered?
Mining and Mineral Rights Indemnity Insurance has limitations - Additional considerations
Mining and Mineral Rights 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 mining and mineral rights indemnity cover will not necessarily be the answer. Information provided on 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 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 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 content set out above is in relation to properties in England and Wales.