intouch

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

Q: My clients are purchasing a property on a new-build development, but their lender is now refusing to offer a mortgage because the roads have not yet been adopted by the local authority. Can you provide a policy to offer the lender protection, should the developer go out of business?

A: Yes – our Adoption of Road policy is designed for exactly this scenario. In fact, we’ve seen an increasing demand for this type of cover, as it becomes more common for homeowners to take possession of a property before building works on a new housing estate and the supporting infrastructure is completed.

Our policy provides cover for homeowners and lenders in the absence of a completed Section 38 (adoption of roads) and/or 104 Agreement (adoption of sewers), should the local authority seek a contribution to bring the roads and sewers up to adoptable standards, if the developer fails to.

Q. I am dealing with a leasehold property where the seller has not paid any ground rent for a number of years. Is there a policy that protects the purchaser against any demands for these outstanding payments in the future, should the landlord come forward?

A. Yes, our Absent Landlord policy can help when reasonable steps to locate the landlord prove unsuccessful because they are either missing, unresponsive or insolvent when the policy is taken out. Our cover provides protection, not only against any future attempt to terminate the lease due to outstanding arrears demanded by a landlord, but also due to any breach of leasehold covenants, such as a failure to notify the landlord of any extensions or conversions at the property. However, it should be noted that the policy should not be used as an alternative to attempting to identify, trace and contact the landlord, and that these measures are also required by many mortgage lenders. 

Q: Are you able to provide legal indemnity cover for property portfolios?

A: Yes. Our portfolio policies can be used to insure different types of transactions, such as housing association transfers, inter-company transfers and local authority sales. We can also cover residential or investment ‘buy to let’ properties, as well as mixed-use and commercial properties.

The key benefit of arranging portfolio cover is that multiple properties can be insured under a single policy, rather than arranging separate policies for each one. In addition, the premium that is charged reflects the spread of risk between the number of properties covered.

The most common portfolio enquiries we receive are for where searches are not being obtained due to a refinancing arrangement. In these scenarios, our ‘No Search’ policies provide cover for lenders against pre-existing unknown adverse entries affecting any of the properties. We’re more than happy to consider requests for other policies too, such as Chancel Repair Liability, Restrictive Covenants and Insolvency Act covers.