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Legal Indemnity - Breach of Covenant Insurance

morwok
morwok Posts: 73 Forumite
First Anniversary Combo Breaker
in House buying, renting & selling
Hi All,

Just after a little bit of advice. We are potentially purchasing the above policy to cover a breach of covenant in our flat. We removed an internal stud wall and opened the kitchen up but I don’t actually believe a covenant was breached as it only covered structural alterations (you may disagree) but our buyer has requested we get this.

A couple of questions please
• Does the limit of indemnity need to cover the full purchase price as seems unnecessary?
• Any recommendations on insurers for our solicitor to get a quote?

Many thanks in advance.

Comments

  • Hoploz
    Hoploz Posts: 3,888 Forumite
    If you don't believe you've breached it then say so. They can request the policy but you don't have to buy it. If they really want it they can buy it themselves... However you are obvs leaving yourself open to them walking away if you refuse. It's a case of who has the upper hand really. Who is most willing to risk losing the deal for the sake of the hundred quid or whatever?
  • G_M
    G_M Posts: 51,977 Forumite
    Name Dropper First Anniversary First Post Combo Breaker
    Your solicitor should know where to buy such a policy. I believe from earlier posts Joe Public can't buy them.
  • morwok
    morwok Posts: 73 Forumite
    First Anniversary Combo Breaker
    Hoploz wrote: »
    If you don't believe you've breached it then say so. They can request the policy but you don't have to buy it. If they really want it they can buy it themselves... However you are obvs leaving yourself open to them walking away if you refuse. It's a case of who has the upper hand really. Who is most willing to risk losing the deal for the sake of the hundred quid or whatever?

    Thanks it is a tough one I think our buyer would be incredibly difficult and it may just be worth it to get ourselves. We really want to move to our new place and the only reason we are selling so don't want to jeopardise :(
    G_M wrote: »
    Your solicitor should know where to buy such a policy. I believe from earlier posts Joe Public can't buy them.

    Thanks she has a quote already but costs a but more than I was expecting so interested for options. The limit will make a big difference to cost so wondered if it did need to be for the full purchase price?
  • davidmcn
    davidmcn Posts: 23,596 Forumite
    Name Dropper First Anniversary First Post
    I presume the theoretical worst case scenario is a protracted legal battle followed by forfeiture of the lease. So yes, the value of the flat is the most relevant amount to use.
  • morwok
    morwok Posts: 73 Forumite
    First Anniversary Combo Breaker
    davidmcn wrote: »
    I presume the theoretical worst case scenario is a protracted legal battle followed by forfeiture of the lease. So yes, the value of the flat is the most relevant amount to use.

    Thanks I suppose I can see the logic in this but does seem unlikely this would be the case.
  • Richard_Webster
    Richard_Webster Posts: 7,646 Forumite
    First Anniversary First Post Combo Breaker
    Not very logical but most mortgage lenders require the policy cover to be for the full present value of the property.
    RICHARD WEBSTER

    As a retired conveyancing solicitor I believe the information given in the post to be useful assuming any properties concerned are in England/Wales but I accept no liability for it.
  • morwok
    morwok Posts: 73 Forumite
    First Anniversary Combo Breaker
    Richard_Webster wrote: »
    Not very logical but most mortgage lenders require the policy cover to be for the full present value of the property.

    :) Thanks will go with that then unfortunately.
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