Mining and Mineral Rights Indemnity Insurance Lender conveyancing requirements
Natwest and Lloyds TSB, as with many banks, dictate their own requirements when it comes to mining and mineral rights indemnity insurance. This page is designed to help domestic conveyancing solicitors on the numerous bank solicitors panel where the title for the the property to be mortgaged contains mining and mineral rights. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each mortgage company, for example Leeds Building Society, HSBC or Barnsley BS. The information on this page Is not to be read as mining and mineral rights indemnity insurance advice.
Need help with mining and mineral rights indemnity insurance from your lender?
Santander and Barclays as with most mortgage companies, requirements are that where mining and mineral rights indemnity insurance is to be put on risk:
- you is duty bound to spell out to the borrower that the borrower must comply with 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 relation to the policy
- the mining and mineral rights indemnity insurance policy should not incorporate conditions that you know would void or compromise the interests of the lender
- the level of indemnity must meet the requirements for the bank (See Part II Handbook requirements )
- your practice must send a copy of the mining and mineral rights indemnity insurance to the borrower and explain to the mortgagor why the mining and mineral rights indemnity insurance policy was effected and that additional insurance might be required if there is supplemental lending against the mortgaged property
- you must reveal to the insurer all relevant information which you have gathered
- the mining and mineral rights indemnity insurance policy must be for the benefit of the mortgage company and, if possible, for the benefit of the mortgagor and any future owner or mortgagee. Where the mortgagor will not be protected by the mining and mineral rights indemnity insurance policy, the borrower needs to be informed accordingly.
- your practice are responsible for approving the terms of the mining and mineral rights policy on behalf of the mortgage company
- the mining and mineral rights indemnity insurance policy must be effected without cost to the lender
| Lender | Requirement |
|---|---|
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Atom Bank | At least the open market value of the property according to the valuation report. |
| Bank of Ireland Mortgages | The limit of indemnity must be an amount not less than the market value of the property. |
| Clydesdale Bank | Open market value of property. |
| Co operative Bank | An amount equal to at least 110% of the mortgage advance. |
| Cynergy Bank | The market value of the property. |
| Darlington Building Society | The higher of value or purchase price of the property. |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| 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. |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| Magellan Homeloans | At least equal to the value of the property |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Pepper Money | An amount equal to at least 110% of the purchase price or value, whichever is higher. 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). |
| 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. |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| Topaz Finance | 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. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
| Whistletree | The value of the property |
Mining and Mineral Rights Contingency Insurance : Reflections
The full terms, conditions and exclusions for mining and mineral rights indemnity insurance are identified in the policy paperwork. Conveyancing Practitioners should point the borrower to the mining and mineral rights indemnity insurance policy itself. Mining and Mineral Rights indemnity insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check any draft 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. Adequacy in this regard should be checked.Mining and Mineral Rights indemnity insurance: Important aspects 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 Policies should be checked for the following- 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.
- The cost of works (including professional fees) for the purpose of the development commenced, 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 order.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- The cost of altering or demolishing 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.
- Cover for compensation incurred in any proceedings concerning the risks specified in the mining and mineral rights indemnity insurance, including fees of a legal nature.
- Diminution in value resulting from the successful enforcement of the risks specified in the mining and mineral rights insurance.
You also need to be sure that the answers on the application form are correct. Regardless of how remote a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form very carefully before any claim is admitted.
Mining and Mineral Rights Indemnity Insurance has limitations - Further considerations
There may be consequences arising from the enforcement of the risks identified in the mining and mineral rights indemnity insurance which are not adequately covered by financial compensation. Information contained within 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 is in relation to properties in England and Wales.