Missing Deeds Indemnity Insurance Mortgage Company conveyancing requirements
Accord and Halifax, like many mortgage companies, set their own specific instructions when it comes to missing deeds indemnity insurance. This page is designed to help conveyancing practitioners on the various bank conveyancing panel where the title for the the property to be mortgaged contains missing deeds. Solicitors should still check the CML handbook requirements for each mortgage company, for example Bank of Scotland, Skipton or HSBC. The content on this page is not focused on missing deeds indemnity insurance requirements.
Need help with missing deeds indemnity insurance from your lender?
RBS and Leeds Building Society as with many lenders, instructions are such that where missing deeds indemnity insurance is effected:
- the missing deeds indemnity insurance policy should always be in favor of the bank and, wherever possible, for the benefit of the mortgagor and any future owner or mortgagee. Where the mortgagor will not be covered by the missing deeds indemnity insurance policy, the borrower needs to be informed accordingly.
- your firm must disclose to the insurer all relevant information which you have acquired
- the missing deeds indemnity insurance policy should be effected at no expense to the bank
- the limit of indemnity must meet the requirements for the bank (See Part II Handbook requirements )
- your practice are responsible for approving the terms of the missing deeds policy on behalf of the bank
- you must supply a duplicate of the missing deeds indemnity insurance to the mortgagor and explain to the mortgagor why the missing deeds indemnity insurance policy was effected and that additional insurance might be necessary if there is further lending against the mortgaged property
- the missing deeds indemnity insurance policy must not contain conditions which you know would void or prejudice the interests of the mortgage company
- your practice must point out to the mortgagor that the borrower will need to comply with any conditions of the missing deeds indemnity insurance policy and that the mortgagor should notify the bank of any notice or potential claim in respect of the policy
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Coventry Building Society | Minimum of the value of the property. |
| Foundation Home loans | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Furness Building Society | Property valuation or purchase price, whichever the greater. |
| GE Money | GE Money Home Lending has withdrawn from the UK mortgage market. |
| Halifax Loans | An amount at least equal to the mortgage advance. |
| Hinckley and Rugby | The policy must be for our benefit and for no less than the amount lent to the borrower, including retentions, stage payments and interest. |
| Market Harborough Building Society | Purchase price or valuation - higher of the two |
| ModaMortgages | An amount at least equal to 110% of the mortgage valuation. |
| Mortgage Express (No 2) | |
| New Street Mortgages | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Paratus | An amount equal to 110% of the valuation or purchase price - whichever is the greater. |
| Platform | 110% of principal sum. |
| 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. |
| Saffron Building Society | Higher of purchase price or valuation. 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). |
| Swansea Building Society | Purchase price or market valuation whichever is the higher |
| RBS - Virgin One | An amount equal to the value of the property. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
| 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. |
Missing Deeds Contingency Insurance : Reflections
The extent of the terms for missing deeds indemnity insurance are identified in the policy document. Conveyancing solicitors should direct the borrower to the missing deeds indemnity insurance policy paperwork. The intention of missing deeds indemnity insurance is to afford indemnity in respect of the risks set out in the policy schedule - so it is essential check the document to determine that it is in order. 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 characteristics and benefits of missing deeds 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. Missing Deeds indemnity insurance Policies should be checked for the following- The cost 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.
- Money paid with the written consent of the insurance company to free the land from the risks specified in the missing deeds insurance.
- Loss in market value resulting from the successful enforcement of the risks specified in the missing deeds policy.
- 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 missing deeds insurance, to the extent that such costs are rendered abortive by court order.
- Cover for compensation incurred in any action regarding the risks specified in the missing deeds insurance, as well as legal and associated costs.
- All other costs and expenses incurred by the Insured with the written consent of the relevant insurance company
Don't forget to consider what is excluded from the missing deeds indemnity insurance e.g. does the policy cover any property that has been altered within the year prior to the policy being put on risk? Does it cover legal costs?
Additional considerations for missing deeds indemnity insurance
Missing Deeds 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 missing deeds indemnity cover will not necessarily be the right solution. 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 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 missing deeds 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.