Bank conveyancing panel requirements re Lack of Building Regulation Consent Indemnity Insurance

Godiva Mortgages and Nationwide, in common with most lenders, set their own specific instructions when it comes to lack of building regulation consent indemnity insurance. The content herein aims to help property law solicitors on the numerous bank approved list of panel lawyers where the title for the the property to be mortgaged includes lack of building regulation consent. Lawyers are advised to familiarise themselves with the CML handbook requirements for each bank, for example Bank of Scotland, Santander or Virgin Money. The content on this page is not focused on lack of building regulation consent indemnity insurance requirements.

Need help with lack of building regulation consent indemnity insurance from your lender?

---

Coventry BS and Leeds Building Society as with many lenders, obligations require that where lack of building regulation consent indemnity insurance is to be put on risk:

• the lack of building regulation consent indemnity insurance policy must not incorporate conditions that you know would void or prejudice the interests of the lender
• you are responsible for approving the terms of the lack of building regulation consent policy on behalf of the lender
• the lack of building regulation consent indemnity insurance policy must be placed on risk at no cost to the lender
• your practice must reveal to the insurer all relevant information which you have gathered
• the minimum level of cover for the policy must satisfy the requirements for the lender (See Part II Handbook requirements )
• you is duty bound to spell out to the borrower that the borrower is obliged to adhere to any conditions of the lack of building regulation consent indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in respect of the insurance
• the lack of building regulation consent indemnity insurance policy must be for the benefit of the mortgage company and, wherever possible, for the benefit of the mortgagor and any subsequent registered proprietor or mortgagee. If the mortgagor will not be protected by the lack of building regulation consent indemnity insurance policy, the borrower must be advised accordingly.
• you must provide a duplicate of the lack of building regulation consent indemnity insurance to the borrower and explain to the borrower why the lack of building regulation consent indemnity insurance policy was effected and that a further policy might be required if there is supplemental borrowing against the mortgaged property

Regarding the extent of cover for the lack of building regulation consent indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Section 9.2 of the UK Finance handbook PII requirements for lenders:

Lack of Building Regulation Consent Contingency Insurance : Reflections

The full terms, conditions and exclusions for lack of building regulation consent indemnity insurance are shown in the policy document. Property lawyers are obliged to point your non-lender client to the lack of building regulation consent indemnity insurance policy itself. The intention of lack of building regulation consent indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so you should check the schedule to determine that it is as it should be. The lifetime 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.

---

Important aspects and benefits of lack of building regulation consent Contingency insurance :

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. Lack of Building Regulation Consent indemnity insurance Policies are likely to cover the following

• Cover for compensation incurred in any action regarding the risks specified in the lack of building regulation consent insurance, including legal and associated costs.
• Loss in market value due to the successful enforcement of the risks specified in the lack of building regulation consent insurance.
• Expenses for works (including professional fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the lack of building regulation consent policy, to the extent that such costs are rendered abortive by court decision.
• The cost 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.
• All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
• All sums paid with consent in writing from the insurance company to free the property from the risks specified in the lack of building regulation consent policy.

---

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 lack of building regulation consent policy will not be valid.

---

Supplemental considerations for lack of building regulation consent indemnity insurance

Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from lack of building regulation consent insurance may be adequate for your client.

---

WhenIBought

Has missing building regulations paperwork come to light long after you bought, perhaps for an extension or conversion completed by a previous owner? If an indemnity policy was arranged, what were you told about the missing documents and the scope of the cover? Visit WhenIBought's missing building regulations approval page to explore the issue and tell us about your purchase.

---

The content set out above covers to properties in England and Wales.