Outstanding Leasehold Interest Indemnity Insurance Bank conveyancing requirements
Lloyds TSB and Barnsley BS, like most banks, have their own requirements when it comes to outstanding leasehold interest indemnity insurance. The purpose of this page to assist domestic conveyancing firms on the various lender approved list of panel lawyers where the title to be charged includes outstanding leasehold interest. It is not a substitute for checking the CML handbook requirements for each bank, be it Virgin Money, Yorkshire Building Society or Leeds Building Society. The content on this page Is not to be read as outstanding leasehold interest indemnity insurance advice.
Need help with outstanding leasehold interest indemnity insurance from your lender?
Skipton and Chelsea BS in common with most lenders, instructions are such that where outstanding leasehold interest indemnity insurance is to be put on risk:
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- you must supply a copy of the outstanding leasehold interest indemnity insurance to the borrower and explain to the borrower why the outstanding leasehold interest indemnity insurance policy was effected and that a further policy may be required if there is supplemental borrowing against the mortgaged property
- your practice must approve the terms of the outstanding leasehold interest policy on behalf of the bank
- the outstanding leasehold interest indemnity insurance policy must be for the benefit of the mortgage company 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 outstanding leasehold interest indemnity insurance policy, the mortgagor needs to be informed accordingly.
- the outstanding leasehold interest indemnity insurance policy must be effected at no expense to the mortgage company
- your firm must disclose to the insurer all relevant information which you have acquired
- the outstanding leasehold interest indemnity insurance policy should not incorporate conditions which you recognise would invalidate or prejudice the interests of the mortgage company
- your firm must point out to the borrower that the borrower will need to adhere to any conditions of the outstanding leasehold interest indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
| Lender | Requirement |
|---|---|
| Accord Buy to Let | 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. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| 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.]
|
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Godiva Mortgages | Minimum of the value of the property. |
| Halifax | An amount at least equal to the mortgage advance. |
| LendInvest | An amount at least equal to the valuation of the property. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| National Westminster Bank | An amount equal to the value of the property. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Platform | 110% of principal sum. |
| Precise 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. |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| Ulster Bank | An amount equal to the value of the property. |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
Non lender-specific considerations
The full terms, conditions and exclusions for outstanding leasehold interest indemnity insurance are identified in the policy document. Conveyancing solicitors should direct the borrower to the outstanding leasehold interest indemnity insurance policy itself. Outstanding Leasehold Interest Contingency insurance is designed to afford indemnity in respect of the risks specified in the policy schedule - so it is essential check the document to determine that it is as it should be. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the outstanding leasehold interest indemnity insurance policy. Adequacy in this regard should be checked.Significant characteristics and benefits of outstanding leasehold interest Contingency insurance :
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the outstanding leasehold interest indemnity insurance schedule. Outstanding Leasehold Interest indemnity insurance Policies should be checked for the following- 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 the written consent of the relevant insurer
- 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 outstanding leasehold interest indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- All sums paid with the written consent of the insurance company to liberate the land from the risks specified in the outstanding leasehold interest indemnity insurance.
- Reimbursement for compensation incurred in any action concerning the risks specified in the outstanding leasehold interest indemnity insurance, including solicitors charges.
- Market value reduction resulting from the successful enforcement of the risks specified in the outstanding leasehold interest indemnity insurance.
Always consider what is not included in the outstanding leasehold interest policy e.g. does the policy cover any residence that has been altered within the 12 months prior to the commencement of the policy? Does it cover legal costs?
Outstanding Leasehold Interest Indemnity Insurance has limitations - Supplemental considerations
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from outstanding leasehold interest insurance may be adequate for your client. Information provided on this webpage is for general information for Regulated law firms in England and Wales on the the mortgage company 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 outstanding leasehold interest 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 is in relation to properties in England and Wales.