Unknown Rights and Easements Indemnity Insurance Bank conveyancing requirements
HSBC and Leeds Building Society, as with most mortgage companies, dictate their own specific instructions when it comes to unknown rights and easements indemnity insurance. The purpose of this page to assist property law lawyers on the different bank approved list of panel lawyers where the title to be charged includes unknown rights and easements. Solicitors should still check the CML handbook requirements for each lender, be it Santander, Barclays or Natwest. The information 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?
Virgin Money and Yorkshire Bank Home Loans as with many lenders, obligations require that where unknown rights and easements indemnity insurance is to be put on risk:
- your practice is duty bound to explain to the borrower that the borrower will need to 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 respect of the insurance
- the minimum level of cover for the policy must satisfy the requirements for the bank (see UK Finance Lenders’ Handbook Part 2 )
- the unknown rights and easements indemnity insurance policy should be effected at no expense to the mortgage company
- you are responsible for approving the terms of the unknown rights and easements policy on behalf of the lender
- you must reveal to the insurer all relevant information which you have gathered
- the unknown rights and easements indemnity insurance policy should always be in favor of the bank and, wherever possible, for the benefit of the mortgagor and any subsequent registered proprietor or bank. Where the mortgagor will not be protected by the unknown rights and easements indemnity insurance policy, the mortgagor needs to be informed accordingly.
- your practice must send 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 could be mandatory if there is further lending against the mortgaged property
- the unknown rights and easements indemnity insurance policy should not incorporate conditions which you know would invalidate or compromise the interests of the bank
| Lender | Requirement |
|---|---|
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Fleet Mortgages | An amount at least equal to the valuation of the property. |
| 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. |
| Hampden | The open market value of the property according to the valuation report. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| Keystone Property Finance | An amount equal to 110% of the valuation or purchase price - whichever is the greater |
| Landmark | 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. |
| Lloyds | The value of the property. |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Pepper Money | An amount equal to at least 110% of 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 and also the borrower(s). |
| Santander | The purchase price or (if lower) 110% of the mortgage advance. |
| Scottish Building Society | Amount of mortgage plus 25%. |
| Scottish Widows | The value of the property. |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
| 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. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| RBS (One Account) | An amount equal to the value of the property. |
| Whistletree | The value of the property |
Non lender-specific considerations
The full terms, conditions and exclusions for unknown rights and easements indemnity insurance are explained in the policy document. Conveyancing solicitors should direct the borrower to the unknown rights and easements indemnity insurance policy document. Unknown Rights and Easements indemnity insurance is devised to provide indemnity in respect of the risks specified in the policy schedule - so it’s important to check the schedule to ensure it is correct. 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.Unknown Rights and Easements Contingency insurance: Important 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 Cover normally includes- All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the unknown rights and easements insurance.
- Market value reduction due to the successful enforcement of the risks specified in the unknown rights and easements insurance.
- Liability for damages or compensation incurred in any action concerning the risks specified in the unknown rights and easements policy, including fees of a legal nature.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- 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.
- The cost of works (including professional 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 order.
Don't forget to consider what is excluded from the unknown rights and easements insurance e.g. does the policy cover any property that has been altered within the year prior to the policy being put on risk? Are legal costs covered?
Unknown Rights and Easements Indemnity Insurance has limitations - Supplemental considerations
Unknown Rights and Easements insurance may satisfy lenders such as Yorkshire Building Society or Halifax 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 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 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 covers to properties in England and Wales.