Indemnity Insurance of Missing Deeds Lender conveyancing requirements
Yorkshire Bank Home Loans and Halifax, in common with the majority of mortgage companies, set their own requirements when it comes to missing deeds indemnity insurance. This page is designed to help conveyancing firms on the different lender approved list of panel lawyers where the title to be charged includes missing deeds. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, be it Leeds Building Society, Skipton or Birmingham Midshires. The information on this page is not focused on missing deeds indemnity insurance requirements.
Need help with missing deeds indemnity insurance from your lender?
RBS and Chelsea BS like most lenders, instructions are such that where missing deeds indemnity insurance is to be taken out:
- you must send a copy of the missing deeds indemnity insurance to the mortgagor and explain to the mortgagor why the missing deeds indemnity insurance policy was effected and that additional insurance may be necessary if there is further lending against the security of the property
- the missing deeds indemnity insurance policy must be placed on risk at no cost to the mortgage company
- your firm must reveal to the insurer all relevant information which you have obtained
- the missing deeds indemnity insurance policy should not contain conditions which you know would void or compromise the interests of the bank
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- the missing deeds indemnity insurance policy needs to be for the benefit of the bank and, if possible, in favour of the mortgagor and any next owner or mortgagee. Where the mortgagor will not be protected by the missing deeds indemnity insurance policy, you must advise the mortgagor of this fact.
- your firm must explain to the borrower that the borrower is obliged to comply with any conditions of the missing deeds indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in relation to the insurance
- your practice are responsible for approving the terms of the missing deeds policy on behalf of 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. |
| Adam & Company International | The open market value of the property according to the valuation report. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Aldermore Bank | 110% of the purchase price or valuation, whichever is greater. 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). |
| 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. |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| Habito | Higher of purchase price or valuation |
| Holmesdale Building Society | 110% |
| 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. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| 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 TSB Scotland | The value of the property |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| 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. |
| Ulster Bank | An amount equal to the value of the property. |
| 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 |
Non lender-specific considerations
The extent of the terms for missing deeds indemnity insurance are set out in the policy paperwork. Conveyancing solicitors are obliged to direct the borrower to the missing deeds indemnity insurance policy itself. Missing Deeds indemnity insurance is devised to provide indemnity in respect of the risks set out in the policy schedule - so you should check the schedule to determine that it is in order. The lifetime of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Missing Deeds Contingency insurance: Important aspects 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. Missing Deeds indemnity insurance Policies are likely to cover the following- Money paid with the written consent of the insurance company to free the property from the risks specified in the missing deeds policy.
- 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.
- Diminution in value resulting from the successful enforcement of the risks specified in the missing deeds indemnity insurance.
- The cost of works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the missing deeds insurance, to the extent that such costs are rendered abortive by court order.
- Liability for damages or compensation incurred in any proceedings regarding the risks specified in the missing deeds indemnity insurance, as well as legal and associated costs.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the missing deeds policy will not be valid.
Missing Deeds Indemnity Insurance has limitations - Supplemental considerations
Missing Deeds insurance may satisfy lenders such as Godiva Mortgages or Yorkshire Building Society 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 provided on 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 missing deeds 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.