Manorial Rights Indemnity Insurance Bank conveyancing requirements
Lloyds TSB and Chelsea BS, in common with many lenders, dictate their own requirements when it comes to manorial rights indemnity insurance. The content herein aims to help conveyancing solicitors on the numerous lender approved list of panel lawyers where the title for the the property to be mortgaged contains manorial rights. It is not a alternative for checking the CML handbook requirements for each bank, whether it be Virgin Money, Skipton or Bank of Scotland. The information on this page Is not to be read as manorial rights indemnity insurance advice.
Need help with manorial rights indemnity insurance from your lender?
Nationwide and Yorkshire Building Society like the majority of mortgage companies, obligations require that where manorial rights indemnity insurance is to be put on risk:
- your practice is duty bound to spell out to the mortgagor that the borrower is obliged to comply with any conditions of the manorial rights indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in respect of the insurance
- the manorial rights indemnity insurance policy must be effected without charge to the lender
- the manorial rights indemnity insurance policy must not incorporate terms which you recognise would void or compromise the interests of the mortgage company
- your practice must provide a duplicate of the manorial rights indemnity insurance to the mortgagor and explain to the borrower why the manorial rights indemnity insurance policy was effected and that a further policy could be necessary if there is supplemental borrowing against the security of the property
- the manorial rights indemnity insurance policy needs to be in favor of the lender and, if possible, for the benefit of the mortgagor and any future owner or mortgage company. Where the borrower will not be protected by the manorial rights indemnity insurance policy, the mortgagor needs to be advised accordingly.
- you are responsible for approving the terms of the manorial rights policy on behalf of the lender
- you must disclose to the insurer all relevant information which you have gathered
- the limit of indemnity must satisfy the requirements for the lender (see UK Finance Lenders’ Handbook Part 2 )
| Lender | Requirement |
|---|---|
| Adam & Company | The open market value of the property according to the valuation report. |
| April Mortgages | An amount at least equal to the mortgage advance. |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| 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. |
| Danske Bank | The limit of indemnity insurance should be the purchase price or valuation - whichever is higher |
| 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. |
| Gen H | An amount equal to the value of the property unless specifically agreed in writing otherwise. |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Magellan Homeloans | At least equal to the value of the property |
| Manchester Building Society | Purchases- higher of the Purchase price & valuation Re-mortgages- Loan x 115%. |
| Masthaven Bank | An amount at least equal to the total mortgage advance. Any indemnity insurance policy must protect the borrowers, any successors in title and any mortgagee. |
| 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). |
| Perenna | The higher of the purchase price or valuation. |
| Platform | 110% of principal sum. |
| Precise Mortgages 2026 | An amount at least equal to 110% of the mortgage valuation. |
| Sainsbury's Bank | An amount equal to the higher of the value of the property or the purchase price. |
| Santander | The purchase price or (if lower) 110% of the mortgage advance. |
| Vida Homeloans | It must be for a minimum of 110% of the purchase price or valuation, whichever is greater |
Manorial Rights Contingency Insurance : Reflections
The full terms, conditions and exclusions for manorial rights indemnity insurance are shown in the policy paperwork. Conveyancing solicitors are obliged to point your non-lender client to the manorial rights indemnity insurance policy itself. Manorial Rights Contingency insurance is designed to afford indemnity in respect of the risks specified in the policy schedule - so you should check the document to ensure it is correct. The lifetime of this non-investment insurance contract is in perpetuity unless otherwise stated in the manorial rights indemnity insurance policy. Again, please check that this is as you expected.Manorial Rights Contingency insurance: Important characteristics and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the manorial rights indemnity insurance schedule. Manorial Rights 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.
- Expenses for works (including professional fees) for the purpose of the development started, before the commencement of proceedings for the enforcement of the risks specified in the manorial rights indemnity insurance, to the extent that such costs are rendered abortive by court order.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Market value reduction resulting from the successful enforcement of the risks specified in the manorial rights policy.
- Money paid with the written consent of the insurance company to free the property from the risks specified in the manorial rights indemnity insurance.
- Reimbursement for compensation incurred in any action concerning the risks specified in the manorial rights policy, including solicitors charges.
Due diligence should extend to checking that the answers on the application form are accurate. Regardless of how remote a claim on the bank insurance policy might be you can rest assured that the insurer will check the details on any proposal form very carefully before any claim is admitted.
Other considerations for manorial rights indemnity insurance
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from manorial rights insurance may be adequate for your client. Content on this webpage is for general information for conveyancers and solicitors in England and Wales on the the mortgage company solicitor 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 manorial rights 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.