Bank conveyancing panel requirements re Unknown Rights and Easements Indemnity Insurance
Birmingham Midshires and HSBC, as with the majority of lenders, have their own specific instructions when it comes to unknown rights and easements indemnity insurance. The purpose of this page to assist domestic conveyancing practitioners on the different lender solicitors panel where the title for the the property to be mortgaged incorporates unknown rights and easements. Solicitors should still check the CML handbook requirements for each bank, whether it be Chelsea BS, Santander or Godiva Mortgages. The content on this page is not focused on unknown rights and easements indemnity insurance requirements.
Need help with unknown rights and easements indemnity insurance from your lender?
Leeds Building Society and Barnsley BS like most mortgage companies, instructions are such that where unknown rights and easements indemnity insurance is to be taken out:
- your firm is duty bound to point out to the mortgagor that the borrower will need to adhere to any conditions of the unknown rights and easements indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in relation to the policy
- the unknown rights and easements indemnity insurance policy should be placed on risk without expense to the lender
- your firm must supply a copy of the unknown rights and easements indemnity insurance to the borrower and explain to the borrower why the unknown rights and easements indemnity insurance policy was effected and that a further policy may be necessary if there is additional borrowing against the security of the property
- the unknown rights and easements indemnity insurance policy should not incorporate terms which you know would invalidate or prejudice the interests of the bank
- the minimum level of cover for the policy must meet the requirements for the lender (See Part II Handbook requirements )
- the unknown rights and easements indemnity insurance policy must be for the benefit of the lender and, wherever possible, in favour of the mortgagor and any next owner or mortgage company. If the borrower will not be covered by the unknown rights and easements indemnity insurance policy, the mortgagor needs to be informed accordingly.
- your practice are responsible for approving the terms of the unknown rights and easements policy on behalf of the bank
- your firm is obliged to disclose to the insurer all relevant information which you have acquired
| Lender | Requirement |
|---|---|
| Accord Mortgages | 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. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Coventry Building Society | Minimum of the value of the property. |
| Halifax | An amount at least equal to the mortgage advance. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| 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. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| LendInvest | An amount at least equal to the valuation of the property. |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| 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. |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| TSB | The value of the property |
| Royal Bank of Scotland | An amount equal to the value of the property. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Whistletree | The value of the property |
General Unknown Rights and Easements indemnity insurance points to consider
The extent of the terms for unknown rights and easements indemnity insurance are set out in the policy document. Conveyancing Practitioners should point the borrower to the unknown rights and easements indemnity insurance policy paperwork. The intention of unknown rights and easements indemnity insurance is to grant indemnity in respect of the risks specified in the policy schedule - so it is essential check any draft to ensure it is as it should be. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Unknown Rights and Easements Contingency insurance: Significant aspects and benefits:
The policy will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the unknown rights and easements indemnity insurance schedule. Unknown Rights and Easements indemnity insurance Cover normally includes- Liability for damages or compensation incurred in any action regarding the risks specified in the unknown rights and easements insurance, as well as legal and associated costs.
- All other costs and expenses incurred by the Insured with consent in writing from 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 unknown rights and easements indemnity insurance, to the extent that such costs are rendered abortive by court order.
- Loss in market value resulting from the successful enforcement of the risks specified in the unknown rights and easements indemnity insurance.
- 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.
- Money paid with the written consent of the insurance company to liberate the land from the risks specified in the unknown rights and easements indemnity insurance.
Due diligence should extend to checking that the answers on the application form are correct. However remote the likelihood of a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly before any claim is met.
Further considerations for unknown rights and easements indemnity insurance
Unknown Rights and Easements 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 unknown rights and easements indemnity cover will not necessarily be the right solution. Information provided 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 unknown rights and easements 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.