Indemnity Insurance of Missing Landlord Lender conveyancing instructions
RBS and Nationwide, like many banks, dictate their own requirements when it comes to missing landlord indemnity insurance. The content herein aims to help property law firms on the numerous mortgage company approved list of panel lawyers where the title for the the property to be mortgaged includes missing landlord. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each bank, for example Birmingham Midshires, Halifax or Godiva Mortgages. 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?
Accord and Lloyds TSB as with most mortgage companies, requirements are that where missing landlord indemnity insurance is to be put on risk:
- you must send a duplicate of the missing landlord indemnity insurance to the mortgagor and explain to the borrower why the missing landlord indemnity insurance policy was effected and that a further policy could be required if there is additional lending against the mortgaged property
- your firm must approve the terms of the missing landlord policy on behalf of the mortgage company
- your practice must reveal to the insurer all relevant information which you have gathered
- the level of indemnity must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- the missing landlord indemnity insurance policy must be placed on risk at no cost to the bank
- the missing landlord indemnity insurance policy must be in favor of the mortgage company and, if possible, in favour of the mortgagor and any subsequent registered proprietor or lender. Where the borrower will not be covered by the missing landlord indemnity insurance policy, you must advise the borrower of this fact.
- you is duty bound to explain to the borrower that the borrower must comply with any conditions of the missing landlord indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the insurance
- the missing landlord indemnity insurance policy must not incorporate terms that you recognise would invalidate or prejudice the interests of the lender
| Lender | Requirement |
|---|---|
| Bank of China | Cover to full value of the property or the Mortgage Advance, whichever is the higher. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Barclays plc | Higher of purchase price or valuation |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| Lloyds TSB Scotland | The value of the property |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| 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. |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Secure Trust Bank | An amount at least equal to the market value. 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). |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| 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 |
| 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. |
General Missing Landlord indemnity insurance points to consider
The extent of the terms for missing landlord indemnity insurance are identified in the policy document. Property lawyers should 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 set out in the policy schedule - so it is essential check any draft to determine that it is in order. The duration of this non-investment insurance contract is in perpetuity unless otherwise stated in the missing landlord indemnity insurance policy. Adequacy in this regard should be checked.Missing Landlord Contingency insurance: Important features and benefits:
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the missing landlord indemnity insurance schedule. Missing Landlord indemnity insurance Cover normally includes- All ancillary costs and expenses incurred by the Insured with the written consent of the relevant insurance company
- Cover for compensation incurred in any proceedings regarding the risks specified in the missing landlord insurance, as well as solicitors charges.
- Loss in market value resulting from the successful enforcement of the risks specified in the missing landlord policy.
- 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.
- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the missing landlord indemnity insurance.
- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the missing landlord policy, to the extent that such costs are rendered abortive by court order.
Always check what is not included in the missing landlord insurance e.g. does the policy cover any property that has been altered within the 12 months prior to the policy being put on risk? Does it cover legal costs?
Supplemental considerations for missing landlord indemnity insurance
Missing Landlord Indemnity insurance isn’t a solution to all of the relevant problems. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender approved 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 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 content set out above covers to properties in England and Wales.