Missing Landlord Indemnity Insurance Bank conveyancing requirements
Barclays and RBS, in common with many lenders, set their own requirements when it comes to missing landlord indemnity insurance. This page is designed to help conveyancing solicitors on the different mortgage company solicitors panel where the title to be charged contains missing landlord. Solicitors should still check the CML handbook requirements for each bank, for example Lloyds TSB, Bank of Scotland or Halifax. The content on this page is not focused on missing landlord indemnity insurance requirements.
Need help with missing landlord indemnity insurance from your lender?
Godiva Mortgages and Natwest in common with most mortgage companies, obligations require that where missing landlord indemnity insurance is effected:
- you must disclose to the insurer all relevant information which you have obtained
- the missing landlord indemnity insurance policy should not incorporate conditions that you know would invalidate or compromise the interests of the lender
- the missing landlord indemnity insurance policy must be for the benefit of the bank and, if possible, for the benefit of the borrower and any next owner or lender. Where the mortgagor will not be covered by the missing landlord indemnity insurance policy, the mortgagor must be advised accordingly.
- the missing landlord indemnity insurance policy must be effected without expense to the bank
- your firm is duty bound to spell out to the borrower that the borrower must adhere to any conditions of the missing landlord indemnity insurance policy and that the borrower should notify the mortgage company of any notice or potential claim in respect of the policy
- you must send a duplicate of the missing landlord indemnity insurance to the borrower and explain to the mortgagor why the missing landlord indemnity insurance policy was effected and that a further policy may be necessary if there is additional lending against the security of the property
- the level of indemnity must meet the requirements for the bank (See Part II Handbook requirements )
- your practice must approve the terms of the missing landlord policy on behalf of the lender
| Lender | Requirement |
|---|---|
| Adam & Company International | The open market value of the property according to the valuation report. |
| Aviva Equity Release | Full value of the property. |
| Bank of China | Cover to full value of the property or the Mortgage Advance, whichever is the higher. |
| 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. |
| Britannia | Cover to the full value of the property. |
| Capital Home Loans | An amount which is at least equal to the value or the purchase price of the property, whichever is the higher |
| Ecology Building Society | An amount equal to at least 110% of the mortgage advance |
| First Direct | The value of the insurance must be for at least the full value of the property |
| Godiva Mortgages | Minimum of the value of the property. |
| Halifax | The value of the property. |
| Investec | The open market value of the property according to the valuation report. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| 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. |
| National Counties Building Society | An amount at least equal to the mortgage advance. |
| Nationwide Building Society | Purchase Price (valuation if price is at a discount). Contact Issuing Office for advice on a remortgage |
| Paragon Residential | An amount at least equal to the stated value of the Property. |
| Skipton Building Society | For lender only cover we will accept a minimum of 110% (index-linked) of the amount of the loan. |
| TSB | The value of the property |
| RBS - Direct Line | An amount equal to the value of the property. |
Missing Landlord Contingency Insurance : Reflections
The full terms, conditions and exclusions for missing landlord indemnity insurance are identified in the policy document. Property lawyers should point your non-lender client to the missing landlord indemnity insurance policy document. Missing Landlord indemnity insurance is designed to provide 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 continuance of this non-investment insurance agreement is in perpetuity unless otherwise stated in the missing landlord indemnity insurance policy. It is well worth checking that the time frame is correct.Missing Landlord Contingency insurance: Important features and benefits:
The insurance will normally cover where someone claims to be entitled to the benefit of the specified risks, stated in the missing landlord indemnity insurance schedule. Missing Landlord indemnity insurance Policies should be checked for the following- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Diminution in value resulting from the successful enforcement of the risks specified in the missing landlord indemnity insurance.
- Cover for compensation incurred in any action concerning the risks specified in the missing landlord insurance, including legal and associated costs.
- 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.
- The cost of works (including professional fees) for the purpose of the development begun, or contracted for, prior to proceedings for the enforcement of the risks specified in the missing landlord indemnity insurance, to the extent that such costs are rendered abortive by court decision.
- Money paid with the written consent of the insurance company to liberate the property from the risks specified in the missing landlord insurance.
Always check what is excluded from the missing landlord indemnity insurance e.g. does the policy cover any residence that has been altered within the year prior to the commencement of the policy? Does it cover legal costs?
Missing Landlord Indemnity Insurance has limitations - Supplemental considerations
Bear in mind, that if a covenant is breached and changes have to be made, simply getting monetary compensation from missing landlord insurance may be adequate for your client.WhenIBought
Are you struggling to sell because nobody can trace your landlord or provide the documents your buyer needs? If this situation existed when you purchased, it may be worth revisiting the advice you received about it. WhenIBought's missing freeholder page explores problems discovered after purchase and invites you to explain what has happened.
Content on this webpage is for general information for Regulated law firms 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 bank 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 landlord 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.