Mortgage Company conveyancing panel conditions re Mining and Mineral Rights Indemnity Insurance
Nationwide and Accord, like the majority of lenders, have their own requirements when it comes to mining and mineral rights indemnity insurance. The purpose of this page to assist property law solicitors on the different lender conveyancing panel where the title to be charged includes mining and mineral rights. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each bank, be it Bank of Scotland, Lloyds TSB or Barclays. The information on this page Is not to be read as mining and mineral rights indemnity insurance advice.
Need help with mining and mineral rights indemnity insurance from your lender?
HSBC and Coventry BS like the majority of banks, obligations require that where mining and mineral rights indemnity insurance is to be taken out:
- your practice must approve the terms of the mining and mineral rights policy on behalf of the lender
- the mining and mineral rights indemnity insurance policy should always be in favor of the lender and, if possible, for the benefit of the borrower and any future owner or lender. Where the borrower will not be covered by the mining and mineral rights indemnity insurance policy, you must advise the borrower of this fact.
- your practice must point out to the mortgagor that the borrower will need to adhere to any conditions of the mining and mineral rights indemnity insurance policy and that the mortgagor should notify the mortgage company of any notice or potential claim in relation to the policy
- the mining and mineral rights indemnity insurance policy should be placed on risk without charge to the mortgage company
- you must provide a copy of the mining and mineral rights indemnity insurance to the borrower and explain to the mortgagor why the mining and mineral rights indemnity insurance policy was effected and that a further policy could be mandatory if there is supplemental borrowing against the mortgaged property
- the limit of indemnity must satisfy the requirements for the bank (See Part II Handbook requirements )
- you is obliged to reveal to the insurer all relevant information which you have acquired
- the mining and mineral rights indemnity insurance policy must not contain terms that you know would invalidate or prejudice the interests of the bank
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Barnsley 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. |
| Coventry Building Society | Minimum of the value of the property. |
| Cynergy Bank | The market value of the property. |
| Gen H | An amount equal to the value of the property unless specifically agreed in writing otherwise. |
| Intelligent Finance | An amount at least equal to the total of the initial mortgage advance plus any pre-agreed reserve. These amounts will be shown in the mortgage offer. |
| Legal & General Home Finance | The policy should be for the full market value of the property and indexed linked. The policy must be for our benefit, and for the benefit of the borrower where available. The policy must benefit all successors and assigns. |
| LendInvest | An amount at least equal to the valuation of the property. |
| Lloyds Bank Private Banking | Not less than the Facility plus 10%. |
| MPowered Mortgages | Either the minimum reinstatement value or where there is no valuation the market value/purchase price figure (whichever is higher). |
| Metro Bank | The open market value of the property according to the valuation report. |
| Mortgage Express | Amount of loan + 15% |
| Paragon Mortgages Ltd | An amount at least equal to the stated value of the Property. |
| Platform | 110% of principal sum. |
| Precise Mortgages | An amount at least equal to 110% of the mortgage valuation. |
| Principality Building Society | Full market value of the property is preferred but if this is not available we will accept the loan advance amount as minimum. You must approve the policy on our behalf. The estimated property value is stated in the Mortgage Offer in remortgage cases. Otherwise it will be stipulated in the Valuation. |
| 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). |
| Tandem Bank | An amount at least equal to 110% of the purchase price or valuation – whichever is the greater. |
| Topaz Finance | Valuation or purchase price, whichever is higher. The policy must always benefit the borrower and any subsequent owner or mortgagee - the policy must be index linked. |
Mining and Mineral Rights Contingency Insurance : Reflections
The extent of the terms for mining and mineral rights indemnity insurance are shown in the policy paperwork. Property lawyers should point your non-lender client to the mining and mineral rights indemnity insurance policy itself. The intention of mining and mineral rights indemnity insurance is to grant indemnity in respect of the risks set out in the policy schedule - so you should check any draft to ensure it is as it should be. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. Adequacy in this regard should be checked.Mining and Mineral Rights indemnity insurance: Significant features and benefits:
This policy would usually provide protection from financial loss that might arise in the event of a third party making a cliam in respect of the risks identified in the policy document. Mining and Mineral Rights indemnity insurance Policies are likely to cover the following- Expenses for works (including professional fees) for the purpose of the development started, prior to proceedings for the enforcement of the risks specified in the mining and mineral rights indemnity insurance, to the extent that such costs are rendered abortive by court order.
- Liability for damages or compensation incurred in any proceedings concerning the risks specified in the mining and mineral rights insurance, including fees of a legal nature.
- 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 mining and mineral rights insurance.
- Loss in market value due to the successful enforcement of the risks specified in the mining and mineral rights indemnity insurance.
- 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. Regardless of how remote a claim on the mortgage company insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly before any claim is admitted.
Additional considerations for mining and mineral rights indemnity insurance
Mining and Mineral Rights insurance may satisfy lenders such as Yorkshire Bank Home Loans or Natwest and prevent clients from from suffering financially but it cannot compensate for the stress and inconvenience the emotional suffering - after all the value of a home cannot always be measured in cash in the eyes of the owner. Information provided on this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank 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 mining and mineral 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 is in relation to properties in England and Wales.