Lender conveyancing panel conditions re Missing Landlord Indemnity Insurance
Lloyds TSB and Yorkshire Bank Home Loans, as with the majority of banks, dictate their own requirements when it comes to missing landlord indemnity insurance. The content herein aims to help domestic conveyancing practitioners on the different bank solicitors panel where the title to be charged contains missing landlord. Lawyers are advised to familiarise themselves with the CML handbook requirements for each bank, be it Barclays, Godiva Mortgages or Halifax. The content on this page Is not to be read as missing landlord indemnity insurance advice.
Need help with missing landlord indemnity insurance from your lender?
Natwest and Leeds Building Society in common with many banks, obligations require that where missing landlord indemnity insurance is effected:
- the missing landlord indemnity insurance policy should not incorporate conditions that you know would void or prejudice the interests of the lender
- the missing landlord indemnity insurance policy must be placed on risk without expense to the bank
- the missing landlord indemnity insurance policy should always be for the benefit of the bank and, if possible, for the benefit of the mortgagor and any next registered proprietor or mortgage company. Where the borrower will not be covered by the missing landlord indemnity insurance policy, the borrower must be informed accordingly.
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- your firm is duty bound to spell out to the mortgagor 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 relation to the policy
- your practice 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 additional insurance could be necessary if there is supplemental borrowing against the mortgaged property
- you is obliged to reveal to the insurer all relevant information which you have acquired
- you must approve the terms of the missing landlord policy on behalf of the bank
| Lender | Requirement |
|---|---|
| Bank of Ireland Mortgages | The limit of indemnity must be an amount not less than the market value of the property. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| 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 |
| Cynergy Bank | The market value of the property. |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| Habito | Higher of purchase price or valuation |
| Hampden | The open market value of the property according to the valuation report. |
| JPMorgan | 110% of principal sum. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| 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. |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the valuation. |
| St James Place | 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. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| RBS - Direct Line One | An amount equal to the value of the property. |
| RBS- First Active | An amount equal to the value of the property. |
| Yorkshire Bank | Open market value of property. |
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 grant indemnity in respect of the risks set out in the policy schedule - so you should check any draft to determine that it is in order. The duration 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.Significant characteristics and benefits of missing landlord indemnity insurance :
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Missing Landlord indemnity insurance Policies are likely to cover the following- Diminution in value due to the successful enforcement of the risks specified in the missing landlord indemnity insurance.
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development commenced, before the commencement of proceedings for the enforcement of the risks specified in the missing landlord indemnity insurance, to the extent that such costs are rendered abortive by court order.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- The out of pocket expenses of altering or demolishing 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.
- All sums paid with the written consent of the insurance company to liberate the property from the risks specified in the missing landlord indemnity insurance.
- Cover for compensation incurred in any proceedings concerning the risks specified in the missing landlord insurance, including incurred costs and expenses.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the missing landlord policy will not be valid.
Missing Landlord Indemnity Insurance has limitations - Supplemental considerations
Missing Landlord insurance may satisfy lenders such as Chelsea BS or Skipton 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. Content on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company 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 content set out above covers to properties in England and Wales.