Mortgage Company conveyancing panel requirements re Missing Landlord Indemnity Insurance

Barnsley BS and Nationwide, like most banks, have their own requirements when it comes to missing landlord indemnity insurance. This page is designed to help domestic conveyancing solicitors on the different bank conveyancing panel where the title for the the property to be mortgaged incorporates missing landlord. It is not a substitute for checking the Council of Mortgage Lenders’ handbook requirements for each mortgage company, whether it be Bank of Scotland, Accord or Halifax. The information on this page Is not to be read as missing landlord indemnity insurance advice.

Need help with missing landlord indemnity insurance from your lender?

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Coventry BS and Barclays like the majority of banks, instructions are such that where missing landlord indemnity insurance is to be taken out:

• your firm is required to reveal to the insurer all relevant information which you have gathered
• the missing landlord indemnity insurance policy must be for the benefit of the lender and, if possible, for the benefit of the borrower and any future registered proprietor or mortgage company. If the borrower will not be covered by the missing landlord indemnity insurance policy, you must advise the mortgagor of this fact.
• the missing landlord indemnity insurance policy must not contain terms that you are aware would invalidate or compromise the interests of the mortgage company
• the minimum level of cover for the policy 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 mortgage company
• the missing landlord indemnity insurance policy should be placed on risk at no charge to the lender
• your practice must explain to the borrower that the borrower will need to 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
• your firm must provide a duplicate of the missing landlord indemnity insurance to the mortgagor and explain to the mortgagor why the missing landlord indemnity insurance policy was effected and that additional insurance could be necessary if there is further borrowing against the mortgaged property

Regarding the extent of cover for the missing landlord indemnity insurance policy (or for that matter any indemnity insurance), consider the following sampling of Section 9.2 of the Part 2 requirements for mortgage companies:

General Missing Landlord indemnity insurance points to consider

The full terms, conditions and exclusions for missing landlord indemnity insurance are identified in the policy paperwork. Conveyancing Practitioners should point the borrower to the missing landlord indemnity insurance policy document. The intention of missing landlord indemnity insurance is to afford indemnity in respect of the risks specified in the policy schedule - so it is essential check any draft to ensure it is correct. The duration of this non-investment insurance contract is in perpetuity unless otherwise stated in the missing landlord indemnity insurance policy. Adequacy in this regard should be checked.

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Important characteristics and benefits of missing landlord indemnity insurance :

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. Missing Landlord indemnity insurance Policies are likely to cover the following

• Reimbursement for compensation incurred in any action regarding the risks specified in the missing landlord insurance, as well as legal and associated costs.
• 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.
• All sums paid with consent in writing from the insurance company to free the property from the risks specified in the missing landlord insurance.
• Diminution in value due to the successful enforcement of the risks specified in the missing landlord indemnity insurance.
• 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 missing landlord indemnity insurance, to the extent that such costs are rendered abortive by court decision.
• All ancillary costs and expenses incurred by the Insured with consent in writing from the relevant insurer

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As with any insurance policy, all material information needs to be disclosed to the insurance company at the outset and throughout the policy term, otherwise the missing landlord policy will be invalidated.

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Missing Landlord Indemnity Insurance has limitations - Other considerations

Missing Landlord insurance may satisfy lenders such as Birmingham Midshires or Yorkshire Bank Home Loans 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.

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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.

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The content set out above is in relation to properties in England and Wales.