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House under value
cardhu1
Posts: 1 Newbie
I've just bought a house for less than the valuation and my solicitor claims I need an Indemnity Policy to cover this. I thought Indemnity was a type of insurance? Why do I need this? She did try to explain it but I didn't understand a word and I'm not convinced she understood herself, or are they just trying to get another £250 out of me?
0
Comments
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If the sellers sold it for less than valuation then if they go bankrupt within 5 years their creditors could claim that the sale was at an undervalue to defraud the creditors and would be able to apply to the court to set aside the transaction. You would then lose the house. Indemnity insurance pays out if that happens.
You may think the risk is tiny (and you would probably be right) but if you are getting a mortgage your lender would want the position protected.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.0 -
Richards right.
You must take out this insurance. Always best to be protected and worth every penny.
In light of today's economic conditions, bankrupcies are on the rise, for £250 you'll sleep better at night!0
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