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  • FIRST POST
    • morwok
    • By morwok 10th Oct 16, 5:06 PM
    • 66Posts
    • 63Thanks
    morwok
    Legal Indemnity - Breach of Covenant Insurance
    • #1
    • 10th Oct 16, 5:06 PM
    Legal Indemnity - Breach of Covenant Insurance 10th Oct 16 at 5:06 PM
    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.
Page 1
    • Hoploz
    • By Hoploz 10th Oct 16, 5:58 PM
    • 3,040 Posts
    • 2,694 Thanks
    Hoploz
    • #2
    • 10th Oct 16, 5:58 PM
    • #2
    • 10th Oct 16, 5:58 PM
    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
    • By G_M 10th Oct 16, 6:22 PM
    • 37,049 Posts
    • 40,971 Thanks
    G_M
    • #3
    • 10th Oct 16, 6:22 PM
    • #3
    • 10th Oct 16, 6:22 PM
    Your solicitor should know where to buy such a policy. I believe from earlier posts Joe Public can't buy them.
    • morwok
    • By morwok 10th Oct 16, 6:54 PM
    • 66 Posts
    • 63 Thanks
    morwok
    • #4
    • 10th Oct 16, 6:54 PM
    • #4
    • 10th Oct 16, 6:54 PM
    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?
    Originally posted by Hoploz
    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

    Your solicitor should know where to buy such a policy. I believe from earlier posts Joe Public can't buy them.
    Originally posted by G_M
    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
    • By davidmcn 10th Oct 16, 7:29 PM
    • 3,849 Posts
    • 3,422 Thanks
    davidmcn
    • #5
    • 10th Oct 16, 7:29 PM
    • #5
    • 10th Oct 16, 7:29 PM
    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
    • By morwok 11th Oct 16, 11:28 AM
    • 66 Posts
    • 63 Thanks
    morwok
    • #6
    • 11th Oct 16, 11:28 AM
    • #6
    • 11th Oct 16, 11:28 AM
    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.
    Originally posted by davidmcn
    Thanks I suppose I can see the logic in this but does seem unlikely this would be the case.
    • Richard Webster
    • By Richard Webster 11th Oct 16, 1:07 PM
    • 7,325 Posts
    • 6,986 Thanks
    Richard Webster
    • #7
    • 11th Oct 16, 1:07 PM
    • #7
    • 11th Oct 16, 1:07 PM
    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
    • By morwok 11th Oct 16, 1:46 PM
    • 66 Posts
    • 63 Thanks
    morwok
    • #8
    • 11th Oct 16, 1:46 PM
    • #8
    • 11th Oct 16, 1:46 PM
    Not very logical but most mortgage lenders require the policy cover to be for the full present value of the property.
    Originally posted by Richard Webster
    Thanks will go with that then unfortunately.
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