Mortgage Company conveyancing panel conditions re Missing Landlord Indemnity Insurance
Yorkshire Building Society and Natwest, in common with many banks, dictate their own specific instructions when it comes to missing landlord indemnity insurance. This page is designed to help residential conveyancing practitioners on the different bank approved list of panel lawyers where the title for the the property to be mortgaged contains missing landlord. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each bank, be it Godiva Mortgages, Barclays or Yorkshire Bank Home Loans. The information on this page Is not to be read as missing landlord indemnity insurance advice.
Need help with missing landlord indemnity insurance from your lender?
Lloyds TSB and Halifax as with most lenders, requirements are that where missing landlord indemnity insurance is effected:
- your practice must supply a duplicate of the missing landlord indemnity insurance to the borrower and explain to the mortgagor why the missing landlord indemnity insurance policy was effected and that a further policy might be mandatory if there is additional borrowing against the mortgaged property
- the limit of indemnity must satisfy the requirements for the bank (See Part II Handbook requirements )
- the missing landlord indemnity insurance policy must be effected without cost to the lender
- your practice is required to reveal to the insurer all relevant information which you have gathered
- you must point out to the borrower that the borrower must adhere to any conditions of the missing landlord indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in respect of the policy
- the missing landlord indemnity insurance policy must not contain conditions which you are aware would void or prejudice the interests of the lender
- the missing landlord indemnity insurance policy must be for the benefit of the lender and, wherever possible, for the benefit of the mortgagor and any subsequent registered proprietor or bank. If the mortgagor will not be protected by the missing landlord indemnity insurance policy, the mortgagor must be informed accordingly.
- your practice are responsible for approving the terms of the missing landlord 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. |
| Aviva Equity Release | Full value of the property. |
| Birmingham Bank | Please contact Head of Operations to discuss (Jackie Burchill) |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| 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. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Godiva Mortgages | Minimum of the value of the property. |
| Halifax | An amount at least equal to the mortgage advance. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| Investec | The open market value of the property according to the valuation report. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| 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. |
| Reliance Bank | \xA31,000,000.00 |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS - Virgin One | 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. |
Missing Landlord Contingency Insurance : Reflections
The extent of the terms for missing landlord indemnity insurance are explained in the policy paperwork. Conveyancing solicitors are obliged to point your non-lender client to the missing landlord indemnity insurance policy paperwork. The intention of missing landlord indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so you should check the schedule to determine that it is in order. The continuance of this non-investment insurance contract is in perpetuity unless otherwise stated in the missing landlord indemnity insurance policy. Again, please check that this is as you expected.Important characteristics and benefits of missing landlord Contingency insurance :
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 Landlord indemnity insurance Policies should be checked for the following- Market value reduction due to the successful enforcement of the risks specified in the missing landlord indemnity insurance.
- Money paid with consent in writing from the insurance company to free the land from the risks specified in the missing landlord indemnity insurance.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurer
- Liability for damages or compensation incurred in any proceedings in respect of the risks specified in the missing landlord indemnity insurance, including legal and associated costs.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the missing landlord insurance, to the extent that such costs are rendered abortive by court decision.
- The cost 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.
Always consider what is excluded from the missing landlord insurance e.g. does the policy cover any residence that has been altered within the 12 months prior to the policy being put on risk? Does it cover legal costs?
Other considerations for missing landlord indemnity insurance
Missing Landlord Indemnity insurance isn’t a solution to all of the relevant problems. Content on 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 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 landlord 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.