Insurance Matters

Following feedback we’ve received, we’ve now made it quicker and easier to get a quote for a Chancel Repair policy for properties in rural locations, and for larger landholdings.

We have removed the ‘built-up area’ criteria, which saves you time checking the nature of the local area and keeps the process as simple as possible. For larger land-holdings, exceeding 30 acres, rather than requiring a bespoke response, quotes are now automatically available on Elite, at competitive premiums. Our quote terms remain the same as smaller properties and are readily available, on the assumption that that there is no known liability and that there has been no contact with the church authorities.

The Community Infrastructure Levy (CIL) is a planning charge payable by landowners wishing to develop their land, which was introduced by the Planning Act 2008 as a way for local authorities in England and Wales to raise funds to help deliver infrastructure, facilities and services in their area, e.g. schools and transport improvements. The Levy is intended to create a fairer spread of contribution towards the cost of infrastructure.

We’ve seen an increase in the number of enquiries where a lender is asking for cover because a property is part of a development that is subject to a CIL. Our new Community Infrastructure Levy policy offers the solution if your lender is concerned about the risk of the local authority taking enforcement action against individual plot purchasers for outstanding past or future CIL payments, or because there is no evidence of payments made, which they would have to deal with if the borrower subsequently defaults on their mortgage in the future.

This lender-only policy provides cover for the term of the mortgage. In the event of enforcement action by the local authority against the individual properties on the development due to non-payment by the developer (e.g. they have gone bust), and the borrower defaulting on their mortgage, the policy covers the lender’s legal costs in defending the enforcement action taken, and the costs in complying.

Premiums start at £90 for a limit of indemnity of £100,000.

We’re pleased to tell you that our judicial review cover now includes delay costs as standard, for no additional premium. In other words, specific costs arising in the event of a judge awarding an interim injunction that delays works on-site.

The delay costs covered are:

• Interest payable on capital monies borrowed for the construction work
• Contractual penalties and standing charges (excluding wages, salaries and staff costs)
• Additional expenditure to relocate and use plant or other equipment elsewhere, which was acquired or leased for the construction works
• Depreciation incurred on such plant or other equipment which cannot be relocated and used elsewhere

And acting on market feedback, we have also amended our policy term from six months, now extending it to offer an indefinite term, to take into account the ambiguity around the time restriction for a Judicial Review application to be made.

We were one of the first firms to issue a judicial review policy back in the 1990s, and we continue to be competitive, continuing to review our pricing and cover to ensure we stay the market leader, offering the best cover at the most competitive premiums.

We understand that lenders increasingly request cover that protects their loan security, and the impact that these requests have on shaping products in the legal indemnities market. To address specific emerging trends and concerns from lenders, we have added the following lender-only policies to our already extensive range:

• Estate Rent charge – to enable the transaction to go ahead, our lender-only policy provides a solution for lenders who are cautious about providing a mortgage on a property that is subject to estate rent charges, and protects them if the borrower defaults on their mortgage.
• Community Infrastructure Levy - the lender is protected if the local authority takes enforcement action against the homeowner for outstanding payments (past or future) under the Levy, and the lender is left with a payment demand if the borrower defaults on their mortgage in the future.
• Insolvency Act – We have a number of policies to cater for the range of different transactions, including a stand-alone parental help to buy product. Our cover can be provided to protect a lender against losses that may be incurred as the result of property being transferred from an individual landlord to their limited company for no consideration, and the risk of the transfer being set aside if the landlord subsequently goes bankrupt.

We keep our ears firmly to the ground to learn about changes to property law and developments in the conveyancing industry. If a lender asks you to arrange cover that you’ve not previously heard of, just give us a call on 01603 617617 and one of our underwriters will be happy to discuss how we can help.

We can now offer a new Lack of Planning Permission and/or Building Regulation Consent option which adds cover for both restrictive covenants and unknown rights and easements, where past works at an existing residential or commercial property may have breached covenants and also obstructed unknown third-party rights and easements affecting the title.

Cover is available for existing residential and commercial premises affected, with premiums starting at £125.

We also offer cover where planning permission was not obtained for the use of the property as a house in multiple occupation (HMO), to protect against the risk of enforcement action being taken by the local authority.

Premiums start at £133 where cover is required for the HMO use only, or £158 where cover is required for the HMO use and for past alterations.

We are pleased to announce that we are extending the periods of cover on several of our policies, as borrowers increasingly ask for longer mortgage terms, and to continue to offer best cover and value for money.

We now offer these longer terms on the following policies:

• Adoption of Road or Sewer (section 38 and section 104 Agreement) – the 10 year limit has been extended to an unlimited period
• Chancel, known liability – extended from 25 years to 35 years
• Environmental/contaminated land policies – extended from 25 years to 35 years
• Judicial Review – our six month policy term has been replaced with an indefinite term
• Road Charges – extended from 10 years to 35 years
• Sewer (no build over agreement) – extended from 15 years to 35 years.

We have developed a new lender option for developers needing to refinance their site during constructions works (for example, to obtain additional funds), and where past searches are available that would have been obtained as part of the developer’s initial purchase transaction. Our option allows the transaction to go ahead without being slowed by a new set of searches.

Premiums start at £76. For more information or a quote, call one of our specialist underwriters on 01603 617617.

We’re pleased to announce that following recent pricing feedback, we have made our NHBC/Building Warranty lender policy premiums more competitive.

When a new property is built, a National House Builders Council (NHBC) Certificate or building warranty will be issued to verify that the works are up to standard, and to protect against latent structural defects. This guarantees the works for 10 years, and the guarantee provider will compensate the property owners accordingly, should any issues arise within the time frame. If a property is being sold and the guarantee or certificate cannot be traced, or may not have even been obtained for the relevant works, then indemnity cover is required by a lender.

Our Lack of NHBC/Building Warranty policy provides a quick solution, allowing the sale transaction to go ahead without delay. Our policy provides cover for the lender, for the full term of the mortgage or charge they hold, on the property at the date the policy is taken out. So if the owner defaults, and defects are identified, the lender is protected against the costs incurred to correct them.

In addition to reviewing our prices, in response to concerns in the market caused by the bankruptcy of one of the warranty providers, we have added a 12-month old property option, in addition to our existing options for properties 2 and 4 years old.