Lender conveyancing panel requirements re Obstruction of Right of Way Indemnity Insurance
Godiva Mortgages and HSBC, like the majority of mortgage companies, have their own requirements when it comes to obstruction of right of way indemnity insurance. The purpose of this page to assist property law solicitors on the different bank approved list of panel lawyers where the title for the the property to be mortgaged contains obstruction of right of way. It is not a alternative for checking the Council of Mortgage Lenders’ handbook requirements for each bank, for example Barnsley BS, Chelsea BS or Bank of Scotland. The content on this page is not focused on obstruction of right of way indemnity insurance requirements.
Need help with obstruction of right of way indemnity insurance from your lender?
Birmingham Midshires and RBS as with most lenders, obligations require that where obstruction of right of way indemnity insurance is effected:
- your firm is duty bound to point out to the mortgagor that the borrower is obliged to adhere to any conditions of the obstruction of right of way indemnity insurance policy and that the borrower should notify the lender of any notice or potential claim in relation to the insurance
- the level of indemnity must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- the obstruction of right of way indemnity insurance policy should not contain conditions that you know would invalidate or prejudice the interests of the lender
- the obstruction of right of way indemnity insurance policy should be placed on risk without expense to the mortgage company
- you is obliged to disclose to the insurer all relevant information which you have gathered
- the obstruction of right of way indemnity insurance policy must be in favor of the bank and, if possible, in favour of the borrower and any next owner or mortgage company. Where the borrower will not be protected by the obstruction of right of way indemnity insurance policy, you must advise the mortgagor of this fact.
- you are responsible for approving the terms of the obstruction of right of way policy on behalf of the mortgage company
- you must supply a copy of the obstruction of right of way indemnity insurance to the borrower and explain to the borrower why the obstruction of right of way indemnity insurance policy was effected and that a further policy may be necessary if there is additional borrowing against the mortgaged property
| Lender | Requirement |
|---|---|
| Bank of Scotland Private | [This lender has not published an answer to this question. Please contact the lender.]
|
| Birmingham Bank | Please contact Head of Operations to discuss (Gareth Allen) |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Clydesdale Bank | Open market value of property. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| Family Building Society | An amount at least equal to the mortgage advance. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Harpenden Building Society | 110% of mortgage advance |
| Lloyds | The value of the property. |
| Lloyds TSB Scotland | The value of the property |
| Mortgage Express (No 2) | [This lender has not published an answer to this question. Please contact the lender.]
|
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Saffron Building Society | Higher of purchase price or valuation. 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). |
| 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 Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| RBS - Virgin One | An amount equal to the value of the property. |
| Ulster Bank | An amount equal to the value of the property. |
| Yorkshire Bank | Open market value of property. |
Obstruction of Right of Way Contingency Insurance : Reflections
The full terms, conditions and exclusions for obstruction of right of way indemnity insurance are identified in the policy document. Conveyancing solicitors should point the borrower to the obstruction of right of way indemnity insurance policy document. Obstruction of Right of Way indemnity insurance is devised to afford indemnity in respect of the risks set out in the policy schedule - so you should check any draft to ensure 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 features and benefits of obstruction of right of way Contingency 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. Obstruction of Right of Way indemnity insurance Policies are likely to cover the following- The cost of works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the obstruction of right of way indemnity insurance, to the extent that such costs are rendered abortive by court order.
- Money paid with the written consent of the insurance company to free the land from the risks specified in the obstruction of right of way policy.
- The out of pocket expenses 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.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Loss in market value resulting from the successful enforcement of the risks specified in the obstruction of right of way indemnity insurance.
- Reimbursement for compensation incurred in any proceedings regarding the risks specified in the obstruction of right of way insurance, including incurred costs and expenses.
You also need to be sure that the answers on the application form are correct. However remote the likelihood of a claim on the bank insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly prior to any claim being admitted.
Supplemental considerations for obstruction of right of way indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from obstruction of right of way insurance may be adequate for your client. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank approved 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 obstruction of right of way 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.