Indemnity Insurance of Maisonette Lender conveyancing instructions
Yorkshire Building Society and Coventry BS, in common with most mortgage companies, dictate their own requirements when it comes to maisonette indemnity insurance. This page sets out to enlighten domestic conveyancing firms on the various lender conveyancing panel where the title to be charged incorporates maisonette. Lawyers are advised to familiarise themselves with the CML handbook requirements for each bank, for example Virgin Money, Natwest or Yorkshire Bank Home Loans. The information on this page is not focused on maisonette indemnity insurance requirements.
Need help with maisonette indemnity insurance from your lender?
HSBC and Chelsea BS like the majority of banks, obligations require that where maisonette indemnity insurance is to be put on risk:
- your firm must send a copy of the maisonette indemnity insurance to the mortgagor and explain to the mortgagor why the maisonette indemnity insurance policy was effected and that additional insurance could be mandatory if there is further lending against the mortgaged property
- you is required to reveal to the insurer all relevant information which you have gathered
- the minimum level of cover for the policy must meet the requirements for the mortgage company (see UK Finance Lenders’ Handbook Part 2 )
- your firm must approve the terms of the maisonette policy on behalf of the bank
- the maisonette indemnity insurance policy must be placed on risk without cost to the lender
- the maisonette indemnity insurance policy must be for the benefit of the lender and, if possible, for the benefit of the borrower and any future owner or bank. If the borrower will not be covered by the maisonette indemnity insurance policy, you must advise the mortgagor of this fact.
- the maisonette indemnity insurance policy should not contain terms that you are aware would void or compromise the interests of the lender
- your practice is duty bound to explain to the mortgagor that the borrower is obliged to comply with any conditions of the maisonette indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in respect of the insurance
| Lender | Requirement |
|---|---|
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Aldermore Bank | 110% of the purchase price or valuation, whichever is greater. 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). Where a property is being sold at undervalue and an equity gift is being provided, the conveyancer must ensure the seller obtains an Insolvency Act Indemnity Insurance Policy and provides evidence to you, so that you are comfortable an appropriate policy is in place to Aldermore’s satisfaction. This indemnity insurance aims to cover Aldermore against any future claims by creditors of the seller that may challenge the sale. |
| Aviva Equity Release | Full value of the property. |
| Bank of Scotland | Not less than mortgage advance plus 10% |
| Coutts Finance | The open market value of the property according to the valuation report. |
| Darlington Building Society | The higher of value or purchase price of the property. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Hodge Equity Release | 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. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| Magellan Homeloans | At least equal to the value of the property |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Molo Finance Buy to Let | 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 mortgages. |
| 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. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Platform | 110% of principal sum. |
| Secure Trust Bank | An amount at least equal to the market value. 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). |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| 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. |
Non lender-specific considerations
The full terms, conditions and exclusions for maisonette indemnity insurance are explained in the policy paperwork. Conveyancing Practitioners should point your non-lender client to the maisonette indemnity insurance policy itself. Maisonette Contingency insurance is devised to afford indemnity in respect of the risks specified in the policy schedule - so it is essential check the schedule to ensure it is correct. The continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the maisonette indemnity insurance policy. It is well worth checking that the time frame is correct.Maisonette indemnity insurance: Significant characteristics 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. Maisonette indemnity insurance Policies should be checked for the following- 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.
- Reimbursement for compensation incurred in any proceedings regarding the risks specified in the maisonette indemnity insurance, as well as incurred costs and expenses.
- All sums paid with consent in writing from the insurance company to liberate the property from the risks specified in the maisonette indemnity insurance.
- Loss in market value due to the successful enforcement of the risks specified in the maisonette indemnity insurance.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurer
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development commenced, prior to proceedings for the enforcement of the risks specified in the maisonette indemnity insurance, to the extent that such costs are rendered abortive by court decision.
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 maisonette policy will be invalidated.
Maisonette Indemnity Insurance has limitations - Further considerations
Maisonette 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 maisonette indemnity cover will not necessarily be the answer. Content on this webpage is for general information for Regulated law firms in England and Wales on the the lender approved panel, it does not constitute advice for members of the public who should contact their lawyer for advice relating to the mortgage company 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 maisonette 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.