Bank conveyancing panel requirements re Lost Documents Indemnity Insurance
Nationwide and Barnsley BS, as with many lenders, have their own specific instructions when it comes to lost documents indemnity insurance. This page sets out to enlighten property law solicitors on the various bank solicitors panel where the title to be charged contains lost documents. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each lender, be it Bank of Scotland, Yorkshire Building Society or Godiva Mortgages. The information on this page is not focused on lost documents indemnity insurance requirements.
Need help with lost documents indemnity insurance from your lender?
Yorkshire Bank Home Loans and Skipton like many mortgage companies, obligations require that where lost documents indemnity insurance is effected:
- the minimum level of cover for the policy must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- you is duty bound to explain to the mortgagor that the borrower will need to comply with any conditions of the lost documents indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the insurance
- your firm must approve the terms of the lost documents policy on behalf of the bank
- the lost documents indemnity insurance policy needs to be for the benefit of the mortgage company and, wherever possible, for the benefit of the borrower and any subsequent owner or mortgagee. Where the mortgagor will not be protected by the lost documents indemnity insurance policy, you must advise the mortgagor of this fact.
- the lost documents indemnity insurance policy must be effected without cost to the bank
- your firm must send a copy of the lost documents indemnity insurance to the borrower and explain to the borrower why the lost documents indemnity insurance policy was effected and that a further policy might be necessary if there is supplemental lending against the mortgaged property
- the lost documents indemnity insurance policy must not incorporate terms that you are aware would invalidate or compromise the interests of the lender
- you is obliged to disclose to the insurer all relevant information which you have gathered
| 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 Private | Not less than the Facility plus 10%. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Hodge | An amount equal to 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, the borrower(s) and any successor in Title. |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Platform | 110% of principal sum. |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| RBS - Virgin One | An amount equal to the value of the property. |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
| Yorkshire 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. |
Lost Documents Contingency Insurance : Reflections
The extent of the terms for lost documents indemnity insurance are shown in the policy paperwork. Conveyancing solicitors should point your non-lender client to the lost documents indemnity insurance policy document. Lost Documents Contingency insurance is devised to afford indemnity in respect of the risks set out in the policy schedule - so it’s important to check any draft to determine that it is as it should be. The duration of this non-investment insurance contract is in perpetuity unless the policy says something to the contrary. Again, please check that this is as you expected.Important aspects and benefits of lost documents indemnity 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. Lost Documents indemnity insurance Cover normally includes- Cover for compensation incurred in any action concerning the risks specified in the lost documents indemnity insurance, including legal and associated costs.
- Diminution in value due to the successful enforcement of the risks specified in the lost documents insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Money paid with consent in writing from the insurance company to liberate the property from the risks specified in the lost documents policy.
- The cost of works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the lost documents policy, to the extent that such costs are rendered abortive by court decision.
- 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 correct. However remote the likelihood of a claim on the bank insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly prior to any claim being admitted.
Lost Documents Indemnity Insurance has limitations - Additional considerations
There may be consequences arising from the enforcement of the risks identified in the lost documents insurance which are not adequately covered by financial compensation. Information contained within this webpage is for general information for Regulated law firms in England and Wales on the the lender conveyancing 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 lost documents Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above is in relation to properties in England and Wales.