Lender conveyancing panel requirements re Obstruction of Access Indemnity Insurance
Barnsley BS and Godiva Mortgages, as with the majority of mortgage companies, have their own specific instructions when it comes to obstruction of access indemnity insurance. This page sets out to enlighten conveyancing firms on the different mortgage company approved list of panel lawyers where the title for the the property to be mortgaged incorporates obstruction of access. Solicitors should still check the CML handbook requirements for each bank, whether it be Yorkshire Building Society, Accord or Yorkshire Bank Home Loans. The content on this page is not focused on obstruction of access indemnity insurance requirements.
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Coventry BS and Santander as with many banks, obligations require that where obstruction of access indemnity insurance is effected:
- the obstruction of access indemnity insurance policy should be effected at no charge to the mortgage company
- your firm is obliged to reveal to the insurer all relevant information which you have obtained
- the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- the obstruction of access indemnity insurance policy should not contain conditions which you know would invalidate or prejudice the interests of the bank
- your firm must approve the terms of the obstruction of access policy on behalf of the bank
- the obstruction of access indemnity insurance policy should always be in favor of the bank and, wherever possible, for the benefit of the mortgagor and any subsequent registered proprietor or bank. If the borrower will not be protected by the obstruction of access indemnity insurance policy, the borrower should be informed accordingly.
- you must provide a duplicate of the obstruction of access indemnity insurance to the borrower and explain to the borrower why the obstruction of access indemnity insurance policy was effected and that a further policy may be mandatory if there is additional borrowing against the security of the property
- your practice must point out to the borrower that the borrower will need to comply with any conditions of the obstruction of access indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in respect of the insurance
| Lender | Requirement |
|---|---|
| Aldermore Bank | |
| Bank of Scotland | |
| DB UK Bank | |
| Dudley Building Society | |
| First Direct | |
| Fleet Mortgages | |
| Hodge | |
| JPMorgan | |
| Landbay Partners | |
| Landmark | |
| Market Harborough Building Society | |
| Masthaven Bank | |
| Monmouthshire Building Society | |
| Mortgage Agency Services | |
| Parity Trust | |
| Rely Mortgages | |
| Saffron Building Society | |
| Scottish Widows | |
| RBS - Direct Line One |
Obstruction of Access Contingency Insurance : Reflections
The full terms, conditions and exclusions for obstruction of access indemnity insurance are identified in the policy paperwork. Property lawyers should direct the borrower to the obstruction of access indemnity insurance policy document. The intention of obstruction of access indemnity insurance is to provide indemnity in respect of the risks set out in the policy schedule - so it is essential check the schedule to ensure it is correct. The duration of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Significant aspects and benefits of obstruction of access 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. Obstruction of Access indemnity insurance Policies should be checked for the following- Money paid with consent in writing from the insurance company to free the property from the risks specified in the obstruction of access policy.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- 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.
- Expenses for works (including professional fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the obstruction of access policy, to the extent that such costs are rendered abortive by court order.
- Liability for damages or compensation incurred in any proceedings regarding the risks specified in the obstruction of access indemnity insurance, as well as fees of a legal nature.
- Loss in market value resulting from the successful enforcement of the risks specified in the obstruction of access policy.
As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the obstruction of access policy will be invalidated.
Supplemental considerations for obstruction of access indemnity insurance
Obstruction of Access Indemnity policies can provide effective protection, but non-lender clients should be asked to give pause for thought and consider that the consequences of not being able to enjoy the property as anticipated may mean that obstruction of access indemnity cover will not necessarily be the answer. Content on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company 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 obstruction of access 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 covers to properties in England and Wales.