Lender conveyancing panel conditions re Unknown Rights and Easements Indemnity Insurance
Virgin Money and RBS, like the majority of mortgage companies, dictate their own requirements when it comes to unknown rights and easements indemnity insurance. The purpose of this page to assist property law firms on the different bank solicitors panel where the title to be charged incorporates unknown rights and easements. It is not a substitute for checking the CML handbook requirements for each lender, for example Bank of Scotland, Coventry BS or Natwest. The information on this page Is not to be read as unknown rights and easements indemnity insurance advice.
Need help with unknown rights and easements indemnity insurance from your lender?
Nationwide and Accord in common with most banks, obligations require that where unknown rights and easements indemnity insurance is effected:
- you is duty bound to spell out to the mortgagor that the borrower is obliged to comply with any conditions of the unknown rights and easements indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the insurance
- the unknown rights and easements indemnity insurance policy should not contain conditions which you recognise would invalidate or compromise the interests of the mortgage company
- your practice must reveal to the insurer all relevant information which you have obtained
- your practice must approve the terms of the unknown rights and easements policy on behalf of the mortgage company
- your firm must provide a duplicate of the unknown rights and easements indemnity insurance to the mortgagor and explain to the mortgagor why the unknown rights and easements indemnity insurance policy was effected and that a further policy may be mandatory if there is supplemental lending against the mortgaged property
- the level of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- the unknown rights and easements indemnity insurance policy must be effected without charge to the mortgage company
- the unknown rights and easements indemnity insurance policy should always be in favor of the bank and, if possible, in favour of the mortgagor and any next registered proprietor or mortgage company. Where the borrower will not be covered by the unknown rights and easements indemnity insurance policy, you must advise the borrower of this fact.
| 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% |
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| DB UK Bank | An amount at least equal to the mortgage advance or credit limit, whichever the higher. The policy must be assignable |
| Hampden | The open market value of the property according to the valuation report. |
| Leeds Building Society | An amount at least equal to the amount of the mortgage advance plus 10%. Any indemnity insurance policy must protect the borrowers, any successor in title and any Mortgagee. |
| Metro Bank | The open market value of the property according to the valuation report. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| National Counties Building Society | An amount at least equal to the mortgage advance. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Rooftop Mortgages | The value of the property for mortgage purposes as disclosed in the 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). |
| State Bank of India UK | The purchase price or value of the property, whichever is the higher. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| The Mortgage Works | The full purchase price/value of the property whichever is higher |
| RBS - Virgin One | An amount equal to the value of the property. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
| Virgin | We require the full market value of the Property. Where this isn't available, we'll accept the loan amount as a minimum. |
| Whistletree | The value of the property |
Non lender-specific considerations
The full terms, conditions and exclusions for unknown rights and easements indemnity insurance are shown in the policy paperwork. Conveyancing solicitors should direct the borrower to the unknown rights and easements indemnity insurance policy itself. 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’s important to check any draft to determine that it is in order. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Unknown Rights and Easements indemnity insurance: Significant features 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 Policies are likely to cover the following- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development commenced, before the commencement of 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.
- Market value reduction resulting from the successful enforcement of the risks specified in the unknown rights and easements insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Cover for compensation incurred in any action regarding the risks specified in the unknown rights and easements indemnity insurance, as well as incurred costs and expenses.
- Money paid with the written consent of the insurance company to free the property from the risks specified in the unknown rights and easements indemnity insurance.
- The out of pocket expenses of altering or destroying 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.
You also need to be sure that the answers on the application form are accurate. Regardless of how remote a claim on the mortgage company insurance policy might be you can be sure that the insurer will check the details on any proposal form thoroughly before any claim is admitted.
Supplemental considerations for unknown rights and easements indemnity insurance
Unknown Rights and Easements insurance may satisfy lenders such as Yorkshire Building Society or Birmingham Midshires and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Information provided on this webpage is for general information for conveyancers and solicitors 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.