Missing Deeds Indemnity Insurance Bank conveyancing requirements
Coventry BS and Lloyds TSB, as with most banks, have their own specific instructions when it comes to missing deeds indemnity insurance. The content herein aims to help property law solicitors on the various lender approved list of panel lawyers where the title to be charged contains missing deeds. Lawyers are advised to familiarise themselves with the CML handbook requirements for each mortgage company, be it Bank of Scotland, Barnsley BS or Chelsea BS. The information on this page is not focused on missing deeds indemnity insurance requirements.
Need help with missing deeds indemnity insurance from your lender?
Nationwide and Leeds Building Society as with the majority of mortgage companies, instructions are such that where missing deeds indemnity insurance is to be taken out:
- the missing deeds indemnity insurance policy should not contain conditions that you know would void or compromise the interests of the bank
- you must reveal to the insurer all relevant information which you have gathered
- the missing deeds indemnity insurance policy should be effected without charge to the bank
- your practice are responsible for approving the terms of the missing deeds policy on behalf of the lender
- the level of indemnity must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the missing deeds indemnity insurance policy needs to be in favor of the bank and, wherever possible, in favour of the mortgagor and any future registered proprietor or mortgagee. Where the borrower will not be covered by the missing deeds indemnity insurance policy, the mortgagor must be informed accordingly.
- your practice must provide a copy of the missing deeds indemnity insurance to the borrower and explain to the mortgagor why the missing deeds indemnity insurance policy was effected and that additional insurance may be required if there is further borrowing against the security of the property
- your firm is duty bound to spell out to the borrower that the borrower will need to comply with any conditions of the missing deeds indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in relation to the policy
| Lender | Requirement |
|---|---|
| Bank of China | Cover to full value of the property or the Mortgage Advance, whichever is the higher. |
| Barclays plc | Higher of purchase price or valuation |
| Bluestone Mortgages | 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. |
| Bradford & Bingley | Amount of loan + 15% |
| Darlington Building Society | The higher of value or purchase price of the property. |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Halifax | An amount at least equal to the mortgage advance. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Hampden | The open market value of the property according to the valuation report. |
| Harpenden Building Society | 110% of mortgage advance |
| 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. |
| Investec | The open market value of the property according to the valuation report. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Lloyds | The value of the property. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Platform | 110% of principal sum. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Yorkshire 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. |
Non lender-specific considerations
The full terms, conditions and exclusions for missing deeds indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners are obliged to point your non-lender client to the missing deeds indemnity insurance policy itself. Missing Deeds Contingency insurance is designed to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check the document to determine that it is as it should be. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the missing deeds indemnity insurance policy. It is well worth checking that the time frame is correct.Significant features and benefits of missing deeds Contingency insurance :
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 land from the risks specified in the missing deeds indemnity insurance.
- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development started, before the commencement of 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.
- Loss in market value due to the successful enforcement of 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.
- Cover for compensation incurred in any proceedings in respect of the risks specified in the missing deeds indemnity insurance, including legal and associated costs.
You also need to be sure that the answers on the application form are accurate. However remote the likelihood of a claim on the mortgage company insurance policy might be you can be sure that the insurer will check the details on any proposal form very carefully prior to any claim being met.
Missing Deeds Indemnity Insurance has limitations - Additional considerations
Missing Deeds insurance may satisfy lenders such as Birmingham Midshires or Virgin Money 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 contained within this webpage is for general information for Regulated law firms 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 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 above information is in relation to properties in England and Wales.