Lender conveyancing panel conditions re Manorial Rights Indemnity Insurance
Godiva Mortgages and Birmingham Midshires, in common with most lenders, set their own requirements when it comes to manorial rights indemnity insurance. This page sets out to enlighten conveyancing lawyers on the various mortgage company conveyancing panel where the title to be charged contains manorial rights. Solicitors should still check the Council of Mortgage Lenders’ handbook requirements for each mortgage company, for example Natwest, Virgin Money or Yorkshire Bank Home Loans. The content on this page is not focused on manorial rights indemnity insurance requirements.
Need help with manorial rights indemnity insurance from your lender?
Skipton and Lloyds TSB like many mortgage companies, requirements are that where manorial rights indemnity insurance is effected:
- the limit of indemnity must meet the requirements for the mortgage company (See Part II Handbook requirements )
- the manorial rights indemnity insurance policy should not contain conditions that you know would invalidate or compromise the interests of the mortgage company
- you is obliged to disclose to the insurer all relevant information which you have gathered
- the manorial rights indemnity insurance policy must be for the benefit of the mortgage company and, wherever possible, in favour of the mortgagor and any subsequent registered proprietor or mortgage company. If the borrower will not be protected by the manorial rights indemnity insurance policy, the borrower needs to be advised accordingly.
- your firm must approve the terms of the manorial rights policy on behalf of the mortgage company
- the manorial rights indemnity insurance policy must be placed on risk at no cost to the lender
- you is duty bound to point out to the mortgagor that the borrower must comply with any conditions of the manorial rights indemnity insurance policy and that the borrower should notify the bank of any notice or potential claim in relation to the insurance
- your practice must send a duplicate of the manorial rights indemnity insurance to the borrower and explain to the borrower why the manorial rights indemnity insurance policy was effected and that a further policy could be mandatory if there is additional lending against the mortgaged property
| Lender | Requirement |
|---|---|
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Allied Irish Bank | At least the amount of the mortgage advance. |
| Coutts & Co | The open market value of the property according to the valuation report. |
| Cynergy Bank | The market value of the property. |
| DB UK Bank | An amount at least equal to the mortgage advance or credit limit, whichever the higher. The policy must be assignable |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| Godiva Mortgages | Minimum of the value of the property. |
| Habito | Higher of purchase price or valuation |
| Kent Reliance | An amount at least equal to 110% of the mortgage valuation. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| M&S Bank | the value of the insurance must be for at least the full value of the property |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| Mortgage Agency Services | 110% of the purchase price or valuation, whichever is greater |
| Mortgage Express | Amount of loan + 15% |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Parity Trust | An amount equal to at least 110% of the mortgage advance |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| 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. |
General Manorial Rights indemnity insurance points to consider
The full terms, conditions and exclusions for manorial rights indemnity insurance are shown in the policy paperwork. Conveyancing Practitioners should direct your non-lender client to the manorial rights indemnity insurance policy itself. The intention of manorial rights indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so you should check any draft to ensure it is correct. The duration 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.Important features and benefits of manorial rights Contingency insurance :
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 taking down 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.
- Money paid with consent in writing from the insurance company to free the land from the risks specified in the manorial rights indemnity insurance.
- All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurance company
- Loss in market value resulting from the successful enforcement of the risks specified in the manorial rights indemnity insurance.
- The cost of 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 manorial rights insurance, to the extent that such costs are rendered abortive by court order.
- Reimbursement for compensation incurred in any action regarding the risks specified in the manorial rights insurance, including fees of a legal nature.
Due diligence should extend to checking that the answers on the application form are correct. Regardless of how remote a claim on the mortgage company insurance policy might be you can certain that the insurer will check the details on any proposal form very carefully before any claim is paid out.
Manorial Rights Indemnity Insurance has limitations - Other considerations
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. Information provided 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 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 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.