Indemnity Insurance of Missing Deeds Bank conveyancing instructions
Barnsley BS and Leeds Building Society, as with the majority of mortgage companies, have their own requirements when it comes to missing deeds indemnity insurance. The purpose of this page to assist conveyancing solicitors on the different bank conveyancing panel where the title for the the property to be mortgaged includes missing deeds. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, whether it be Birmingham Midshires, Barclays or Halifax. The information on this page is not focused on missing deeds indemnity insurance requirements.
Need help with missing deeds indemnity insurance from your lender?
Accord and Virgin Money as with many banks, instructions are such that where missing deeds indemnity insurance is effected:
- you are responsible for approving the terms of the missing deeds policy on behalf of the bank
- the missing deeds indemnity insurance policy must be for the benefit of the lender and, wherever possible, in favour of the borrower and any subsequent owner or mortgagee. Where the borrower will not be covered by the missing deeds indemnity insurance policy, you must advise the borrower of this fact.
- you must supply a duplicate of the missing deeds indemnity insurance to the borrower and explain to the borrower why the missing deeds indemnity insurance policy was effected and that a further policy might be required if there is additional lending against the mortgaged property
- the limit of indemnity must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- the missing deeds indemnity insurance policy should be placed on risk without expense to the bank
- you is duty bound to explain to the mortgagor that the borrower is obliged to comply with any conditions of the missing deeds indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in relation to the policy
- your firm is obliged to disclose to the insurer all relevant information which you have gathered
- the missing deeds indemnity insurance policy should not incorporate conditions that you recognise would void or prejudice the interests of the bank
| Lender | Requirement |
|---|---|
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Britannia | Cover to the full value of the property. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| Fleet Mortgages | An amount at least equal to the valuation 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. |
| Habito | Higher of purchase price or valuation |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Hodge Equity Release | An amount equal to 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, the borrower(s) and any successor in Title. |
| Lloyds | The value of the property. |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Metro Bank | The open market value of the property according to the valuation report. |
| Molo Finance Buy to Let | 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 mortgages. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| NRAM Ltd | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| 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). |
| Royal Bank of Scotland -Natwest One | An amount equal to the value of the property. |
| RBS (One Account) | An amount equal to the value of the property. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
Non lender-specific considerations
The extent of the terms for missing deeds indemnity insurance are shown in the policy document. Conveyancing solicitors should direct the borrower to the missing deeds indemnity insurance policy document. Missing Deeds Contingency insurance is designed to grant indemnity in respect of the risks set out in the policy schedule - so you should check the document to ensure it is correct. The lifetime of this non-investment insurance contract is in perpetuity unless otherwise stated in the missing deeds indemnity insurance policy. Adequacy in this regard should be checked.Missing Deeds indemnity insurance: Important characteristics and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the missing deeds indemnity insurance schedule. Missing Deeds indemnity insurance Cover normally includes- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the missing deeds indemnity insurance.
- The cost of altering or destroying 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.
- Market value reduction resulting from the successful enforcement of the risks specified in the missing deeds policy.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Reimbursement for compensation incurred in any proceedings regarding the risks specified in the missing deeds indemnity insurance, including fees of a legal nature.
- The cost of works (including professional fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the missing deeds indemnity insurance, to the extent that such costs are rendered abortive by court order.
Always consider what is excluded from the missing deeds policy e.g. does the policy cover any residence that has been altered within the year prior to the policy being put on risk? Does it cover legal costs?
Missing Deeds Indemnity Insurance has limitations - Other considerations
Missing Deeds 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 missing deeds indemnity cover will not necessarily be the right solution. 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 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.