Unknown Rights and Easements Indemnity Insurance Bank conveyancing requirements
Leeds Building Society and Nationwide, as with the majority of banks, have their own specific instructions when it comes to unknown rights and easements indemnity insurance. The content herein aims to help property law lawyers on the numerous bank solicitors panel where the title to be charged incorporates unknown rights and easements. Lawyers are advised to familiarise themselves with the Council of Mortgage Lenders’ handbook requirements for each mortgage company, for example Skipton, Virgin Money or Yorkshire Building Society. The content on this page is not focused on unknown rights and easements indemnity insurance requirements.
Need help with unknown rights and easements indemnity insurance from your lender?
Santander and Yorkshire Bank Home Loans like many mortgage companies, instructions are such that where unknown rights and easements indemnity insurance is to be taken out:
- the unknown rights and easements indemnity insurance policy must be effected at no charge to the mortgage company
- you must send a copy of the unknown rights and easements indemnity insurance to the borrower and explain to the mortgagor why the unknown rights and easements indemnity insurance policy was effected and that additional insurance might be necessary if there is additional lending against the security of the property
- you must reveal to the insurer all relevant information which you have gathered
- your firm are responsible for approving the terms of the unknown rights and easements policy on behalf of the mortgage company
- the level of indemnity must satisfy the requirements for the mortgage company (See Part II Handbook requirements )
- the unknown rights and easements indemnity insurance policy must not incorporate conditions that you are aware would invalidate or prejudice the interests of the mortgage company
- the unknown rights and easements indemnity insurance policy needs to be in favor of the bank and, if possible, for the benefit of the borrower and any next owner or lender. Where the mortgagor will not be protected by the unknown rights and easements indemnity insurance policy, the borrower should be advised accordingly.
- your firm must spell out to the borrower that the borrower is obliged to comply with any conditions of the unknown rights and easements indemnity insurance policy and that the mortgagor should notify the lender of any notice or potential claim in respect of the policy
| Lender | Requirement |
|---|---|
| Accord Buy to Let | 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. |
| Ahli United Bank | An amount equal to the value of the Mortgaged Property |
| Better HomeOwnership | An amount to cover the mortgage advance as a minimum. |
| Cynergy Bank | The market value of the property. |
| Dudley Building Society | Purchase price or valuation, whichever is higher. |
| 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. |
| Handelsbanken | Purchase price or 110% of mortgage advance, whichever is the greater. |
| Hodge Equity Release | An amount equal to the purchase price or value, whichever is higher. Any indemnity insurance policy must be for our benefit, that of any transferee/assignee (legal or equitable) of the mortgage, the borrower(s) and any successor in Title. |
| Kensington Mortgage | Must be for a minimum of 110% of the purchase price or valuation whichever is the greatest. |
| Landbay Partners | An amount equal to 100% of the property valuation or purchase price (whichever is greater) plus 10%. |
| Landmark | Preference for full market value of the property, but if this level of cover is not available, will accept a minimum of the actual loan amount. You must approve the policy on our behalf. |
| 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. |
| LiveMore | An amount equal to the purchase price or value of the property, whichever is higher |
| Molo Finance Buy to Let | 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 mortgages. |
| Nedbank | You are to refer to us for specific instructions on any matter involving indemnity insurance. |
| Reliance Bank | £1,000,000.00 |
| Tipton Coseley Building Society | Minimum of mortgage advance. |
| Together Personal Finance | Minimum of £2,000,000.00 per claim. |
Unknown Rights and Easements Contingency Insurance : Reflections
The full terms, conditions and exclusions for unknown rights and easements indemnity insurance are set out in the policy paperwork. Conveyancing solicitors are obliged to direct the borrower to the unknown rights and easements indemnity insurance policy document. The intention of unknown rights and easements indemnity insurance is to provide indemnity in respect of the risks specified in the policy schedule - so it is essential check the schedule to determine that it is correct. The duration of this non-investment insurance agreement is in perpetuity unless the policy says something to the contrary. It is well worth checking that the time frame is correct.Unknown Rights and Easements Contingency 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. Unknown Rights and Easements indemnity insurance Cover normally includes- All sums paid with consent in writing from the insurance company to free the property from the risks specified in the unknown rights and easements insurance.
- All other costs and expenses incurred by the Insured with consent in writing from the relevant insurer
- Expenses for works (including architects’ and surveyors’ fees) for the purpose of the development begun, or contracted for, before the commencement of proceedings for the enforcement of the risks specified in the unknown rights and easements policy, to the extent that such costs are rendered abortive by court decision.
- 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.
- Reimbursement for compensation incurred in any proceedings concerning the risks specified in the unknown rights and easements insurance, as well as fees of a legal nature.
- Loss in market value resulting from the successful enforcement of the risks specified in the unknown rights and easements policy.
Due diligence should extend to checking that the answers on the application form are correct. Regardless of how remote a claim on the lender insurance policy might be you can rest assured that the insurer will check the details on any proposal form thoroughly before any claim is met.
Unknown Rights and Easements Indemnity Insurance has limitations - Further considerations
Unknown Rights and Easements insurance may satisfy lenders such as Accord or Barclays 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.WhenIBought
Where the rights in question concern drains, pipes or cables, has a sale or remortgage exposed uncertainty about whose services cross the land and who can reach them for repairs? What did you understand about those arrangements when you bought? WhenIBought's easements and service rights page explores these issues, including other people's services crossing your property, and invites you to tell us what happened.
Information provided on this webpage is for general information for conveyancers and solicitors in England and Wales on the the bank approved 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 unknown rights and easements Policies is if you make any contact with any party who might cause a claim under the Policy, it can invalidate the cover.
The content set out above covers to properties in England and Wales.