Unknown Rights and Easements Indemnity Insurance Lender conveyancing requirements
Barclays and Bank of Scotland, in common with most mortgage companies, dictate their own specific instructions when it comes to unknown rights and easements indemnity insurance. This page sets out to enlighten conveyancing solicitors on the various lender approved list of panel lawyers where the title to be charged incorporates unknown rights and easements. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each mortgage company, for example Halifax, Coventry BS or Chelsea BS. The content on this page Is not to be read as unknown rights and easements indemnity insurance advice.
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Yorkshire Bank Home Loans and Accord in common with most mortgage companies, instructions are such that where unknown rights and easements indemnity insurance is effected:
- your practice is required to disclose to the insurer all relevant information which you have gathered
- your firm must approve the terms of the unknown rights and easements policy on behalf of the bank
- the unknown rights and easements indemnity insurance policy must be effected without cost to the lender
- your practice must provide a copy of the unknown rights and easements indemnity insurance to the borrower and explain to the mortgagor why the unknown rights and easements indemnity insurance policy was effected and that a further policy might be necessary if there is further lending against the security of the property
- the level of indemnity must satisfy the requirements for the lender (See Part II Handbook requirements )
- you must point out to the borrower that the borrower must adhere to any conditions of the unknown rights and easements indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in relation to the insurance
- the unknown rights and easements indemnity insurance policy should not contain terms which you recognise would invalidate or prejudice the interests of the lender
- the unknown rights and easements indemnity insurance policy needs to be in favor of the bank and, if possible, in favour of the borrower and any subsequent owner or mortgage company. Where the borrower will not be protected by the unknown rights and easements indemnity insurance policy, the mortgagor needs to be informed accordingly.
| Lender | Requirement |
|---|---|
| Bank of China | Cover to full value of the property or the Mortgage Advance, whichever is the higher. |
| Barclays plc | Higher of purchase price or valuation |
| 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. |
| Halifax | An amount at least equal to the mortgage advance. |
| Harpenden Building Society | 110% of mortgage advance |
| Intelligent Finance | 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. |
| JPMorgan | 110% of principal sum. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| Lloyds | The value of the property. |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Mortgage Express | Amount of loan + 15% |
| 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. |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Rely Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| RBS - Direct Line 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 |
Unknown Rights and Easements Contingency Insurance : Reflections
The full terms, conditions and exclusions for unknown rights and easements indemnity insurance are identified in the policy document. Property lawyers are obliged to direct your non-lender client to the unknown rights and easements indemnity insurance policy paperwork. Unknown Rights and Easements Contingency insurance is designed to grant indemnity in respect of the risks set out in the policy schedule - so you should check the schedule to ensure it is correct. The lifetime of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Unknown Rights and Easements indemnity insurance: Significant features and benefits:
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. Unknown Rights and Easements indemnity insurance Policies are likely to cover the following- The out of pocket expenses of altering or demolishing 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.
- 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 unknown rights and easements insurance, to the extent that such costs are rendered abortive by court decision.
- Market value reduction due to the successful enforcement of the risks specified in the unknown rights and easements policy.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- All sums paid with the written consent of the insurance company to free the property from the risks specified in the unknown rights and easements insurance.
- Reimbursement for compensation incurred in any action regarding the risks specified in the unknown rights and easements insurance, including legal and associated costs.
You also need to be sure that the answers on the application form are correct. However remote the likelihood of a claim on the mortgage company insurance policy might be you can rest assured that the insurer will check the details on any proposal form very carefully before any claim is paid out.
Unknown Rights and Easements Indemnity Insurance has limitations - Supplemental considerations
Unknown Rights and Easements insurance may satisfy lenders such as RBS or Virgin Money 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 lender solicitor 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 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.