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We look at some of the most common leasehold questions posed to our underwriters.

Q.  Do you provide cover for residential leasehold properties where, due to the amount of ground rent charged, a long lease could be treated in the future as a shorthold tenancy by the landlord?
A. Yes, our Housing Act policy protects a lender in the event that the landlord unexpectedly issues an eviction notice, rather than initiating the usual forfeiture proceedings. It covers the risk that borrowers with a lease where the annual ground rent exceeds £250, or £1,000 in Greater London, can be evicted using the much quicker process permitted for assured short hold tenancies under the Act. Premiums start at £42 for a policy limit of £100,000.

Q. Some residential leases (particularly older leases) don’t contain a mortgagee protection clause, which requires the lender to be notified if a landlord issues forfeiture proceedings and repossesses a property. Can you provide a policy to help?
A. Yes, we can - our missing mortgagee protection clause policy protects the lender in these scenarios. If forfeiture proceedings are brought against a leaseholder, due to a breach of covenants which occurs after the mortgage has been granted, the lender would expect to be notified. Where a lease doesn’t contain this specific clause, lenders may be unaware of the forfeiture proceeding and therefore unable to respond and claim relief from forfeiture – putting them at risk of a financial loss under the mortgage. Premiums start at £225 for a policy limit of £100,000.

Q. Can you cover both of the above leasehold issues under one policy?
A. Again, happily the answer is yes! We often receive enquiries where the lease for a property is affected by both issues. We’re able to provide a combined Missing Mortgagee Protection Clause and Housing Act policy for the lender. What’s more, with our combined covers discount, our premiums for this policy start at £248 for a policy limit of £100,000.