Lender conveyancing panel conditions re Forfeiture of Superior lease Indemnity Insurance
Skipton and Birmingham Midshires, like many lenders, have their own specific instructions when it comes to forfeiture of superior lease indemnity insurance. This page is designed to help residential conveyancing practitioners on the different bank approved list of panel lawyers where the title for the the property to be mortgaged contains forfeiture of superior lease. It is not a alternative for checking the Council of Mortgage Lenders’ handbook requirements for each mortgage company, be it Accord, Bank of Scotland or Santander. The content on this page Is not to be read as forfeiture of superior lease indemnity insurance advice.
Need help with forfeiture of superior lease indemnity insurance from your lender?
Coventry BS and Lloyds TSB as with the majority of mortgage companies, instructions are such that where forfeiture of superior lease indemnity insurance is to be taken out:
- your practice is duty bound to spell out to the borrower that the borrower will need to adhere to any conditions of the forfeiture of superior lease indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the policy
- your practice is obliged to reveal to the insurer all relevant information which you have obtained
- the forfeiture of superior lease indemnity insurance policy must be placed on risk without charge to the lender
- you must supply a duplicate of the forfeiture of superior lease indemnity insurance to the borrower and explain to the borrower why the forfeiture of superior lease indemnity insurance policy was effected and that additional insurance could be required if there is additional lending against the mortgaged property
- the forfeiture of superior lease indemnity insurance policy should not incorporate conditions that you are aware would void or compromise the interests of the bank
- the level of indemnity must satisfy the requirements for the lender (See Part II Handbook requirements )
- the forfeiture of superior lease indemnity insurance policy must be for the benefit of the bank and, wherever possible, for the benefit of the borrower and any next registered proprietor or lender. If the mortgagor will not be covered by the forfeiture of superior lease indemnity insurance policy, the mortgagor should be advised accordingly.
- your practice are responsible for approving the terms of the forfeiture of superior lease policy on behalf of the lender
| Lender | Requirement |
|---|---|
| Bank of Ireland Mortgages | The limit of indemnity must be an amount not less than the market value of the property. |
| Birmingham Bank | completions@birminghambank.com |
| Chelsea Building Society | 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. |
| DB UK Bank | An amount at least equal to the mortgage advance or credit limit, whichever the higher. The policy must be assignable |
| Godiva Mortgages | Minimum of the value of the property. |
| Holmesdale Building Society | 110% |
| 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. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Magellan Homeloans | At least equal to the value of the property |
| Monmouthshire Building Society | The higher of the purchase price or valuation. For remortgages, the value of the advance. |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express (No 2) | |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Perenna | The higher of the purchase price or valuation. |
| The Mortgage Business | An amount at least equal to the mortgage advance/credit limit - whichever is the highest. |
| Royal Bank of Scotland | 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. |
General Forfeiture of Superior lease indemnity insurance points to consider
The extent of the terms for forfeiture of superior lease indemnity insurance are explained in the policy document. Property lawyers should point your non-lender client to the forfeiture of superior lease indemnity insurance policy itself. The intention of forfeiture of superior lease indemnity insurance is to afford indemnity in respect of the risks set out in the policy schedule - so it’s important to check the document to determine that it is in order. The continuance of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Forfeiture of Superior lease indemnity insurance: Important features and benefits:
Protection via such a policy is to cover the risk of third parties looking to enforce rights that can affect the use of a property. Forfeiture of Superior lease indemnity insurance Cover normally includes- Money paid with consent in writing from the insurance company to free the land from the risks specified in the forfeiture of superior lease indemnity insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Diminution in value resulting from the successful enforcement of the risks specified in the forfeiture of superior lease insurance.
- 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.
- 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 forfeiture of superior lease indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- Reimbursement for compensation incurred in any proceedings in respect of the risks specified in the forfeiture of superior lease indemnity insurance, including fees of a legal nature.
As is the case with all conventional insurance, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the forfeiture of superior lease policy will not be valid.
Forfeiture of Superior lease Indemnity Insurance has limitations - Additional considerations
Forfeiture of Superior lease 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 forfeiture of superior lease indemnity cover will not necessarily be the right solution. Information contained within this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank 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 forfeiture of superior lease 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.