Bank conveyancing panel conditions re Missing Landlord Indemnity Insurance
Chelsea BS and Coventry BS, as with many lenders, dictate their own specific instructions when it comes to missing landlord indemnity insurance. The purpose of this page to assist domestic conveyancing firms on the numerous lender approved list of panel lawyers where the title to be charged contains missing landlord. Solicitors should still check the CML handbook requirements for each bank, whether it be Virgin Money, Nationwide or Barclays. The content on this page is not focused on missing landlord indemnity insurance requirements.
Need help with missing landlord indemnity insurance from your lender?
Santander and Yorkshire Building Society like most mortgage companies, requirements are that where missing landlord indemnity insurance is to be taken out:
- the missing landlord indemnity insurance policy should always be for the benefit of the mortgage company and, if possible, for the benefit of the mortgagor and any future registered proprietor or lender. Where the borrower will not be covered by the missing landlord indemnity insurance policy, you must advise the mortgagor of this fact.
- your practice is duty bound to point out to the mortgagor that the borrower will need to adhere to any conditions of the missing landlord indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
- the missing landlord indemnity insurance policy must not contain terms which you recognise would void or prejudice the interests of the lender
- you must approve the terms of the missing landlord policy on behalf of the bank
- your firm is obliged to disclose to the insurer all relevant information which you have obtained
- the minimum level of cover for the policy must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- the missing landlord indemnity insurance policy must be effected without charge to the lender
- your practice must supply a copy of the missing landlord indemnity insurance to the mortgagor and explain to the mortgagor why the missing landlord indemnity insurance policy was effected and that additional insurance may be necessary if there is further borrowing against the security of the property
| Lender | Requirement |
|---|---|
| Atom Bank | At least the open market value of the property according to the valuation report. |
| Barclays plc | Higher of purchase price or valuation |
| Birmingham Midshires | An amount equal to at least 110% of the purchase price or value, whichever is higher. |
| Bradford & Bingley | Amount of loan + 15% |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Hodge | 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. |
| 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. |
| JPMorgan | 110% of principal sum. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| Mortgage Express | Amount of loan + 15% |
| Perenna | The higher of the purchase price or valuation. |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Santander | The purchase price or (if lower) 110% of the mortgage advance. |
| 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). |
| RBS - Direct Line | An amount equal to the value of the property. |
| Yorkshire Bank | Open market value of property. |
| Zephyr Mortgages | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Missing Landlord Contingency Insurance : Reflections
The full terms, conditions and exclusions for missing landlord indemnity insurance are identified in the policy document. Property lawyers should direct the borrower to the missing landlord indemnity insurance policy itself. Missing Landlord indemnity insurance is devised to afford indemnity in respect of the risks set out in the policy schedule - so it’s important to check the schedule 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. It is well worth checking that the time frame is correct.Important characteristics and benefits of missing landlord indemnity 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 Cover normally includes- The cost 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 other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- The cost of works (including professional fees) for the purpose of the development started, 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 order.
- All sums paid with consent in writing from the insurance company to free the land from the risks specified in the missing landlord policy.
- Cover for compensation incurred in any action regarding the risks specified in the missing landlord policy, as well as legal and associated costs.
- Diminution in value due to the successful enforcement of the risks specified in the missing landlord indemnity insurance.
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.
Supplemental considerations for missing landlord indemnity insurance
There may be consequences arising from the enforcement of the risks identified in the missing landlord insurance which are not adequately covered by financial compensation. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the lender solicitor 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.