Deed of gift

bgdbmd

I am proposiing to gift to my daughter £15,000 to help with the purchase of a property but her solicitor is stating that she will have to take out an indemnity insurance (at a cost of over £450 including fees) even though I have provided a leeter confirming that the gift is unconditional. The mortgage company have stated that they don't insist on insurance is this just a ruse for the solicitor to up their fees?

Burridge60

Seems unusual to me. Did he says why the indemnity was required? What is he expecting to happen that the policy might cover?

bgdbmd

Thanks for reply

The insurance it seems is in case I go insolvent. The solicitor is saying that it is a requirement of the CML (council of mortgage lenders) Quote section 5.15.3 "If you are aware that the title of the property is subject to a deed of gift or a transaction at an apparent undervalue completed within the last five yearsof the proposed mortgage then you must be satisfied that we will aquire our interest in good faith and will be protected under the provisions of the Insolvency (No 2) Act 1994 against our security being set aside. If you are unable to give an unqualified certificate of title, you must arrange indemnity insurance".

I am not involved in the title to the property, it is a without strings gift.

Yorkie1

That seems bonkers. I'd wait for one of the conveyancing solicitors on here to comment as I haven't ever heard of this being imposed in similar cases.

Thrugelmir

Is the deposit the entire equity in the property?

Akom

I'm going through the same thing at the moment but on the recieving end of the gifted deposit.

I've not been asked to take out an insurance by either my lender or my solicitor.

If it's gifted then i dont understand why you'd need insurance either.

getmore4less

It is much better to make the gifts early , stick the money in the account of the people that need it and then it is deposit from savings.

bgdbmd

Hi Thrugelmir

In answer to your question, the Gift of £15,000 would represent about 20% of the deposit put down on the property.