Bespoke indemnity policy requirement from Nationwide

MsJoss

Hi,

We are trying to sell our flat and Nationwide are the lender for our buyer. Our flat is a leasehold property and the lease contains a forfeiture clause but no mortgage protection clause.

Nationwide have said they require an indemnity policy or a Deed of Variation to cover this. Our freeholder will not agree to a Deed of Variation so we are trying to find a suitable indemnity policy.

Unfortunately Nationwide requires that the indemnity policy places no obligations on them to update the insurer. Our solicitor has tried multiple insurance companies but none will agree to that requirement. 

Has anyone experienced this before and found a suitable indemnity policy? Our solicitor, our buyer's solicitor, and both estate agents have never experienced this before. We’re about to lose our sale and onward purchase because of this and are at our wits' end.

Many thanks for any advice or guidance.

K_S

@msjoss As per the lender conveyancing handbook (https://lendershandbook.ukfinance.org.uk/) , there are only 3 options that NW allow in these cases -

1. A deed of variation
2. A separate agreement with the freeholder/management
3. Indemnity policy which does not place obligations on NW to update the insurer

I would be surprised if No.3 were impossible as it would then be meaningless.

Would it at all possible to explore option 2?

MsJoss

Hi @K_S Thank you for your response.

The other option was a Side Agreement, but the freeholder has also refused to agree to this unfortunately. They are aware that NW will accept a suitable indemnity policy so are insisting we go down that route.

I'm of the same opinion that option 3 must be possible, otherwise we're on a wild goose chase, but so far no insurer will agree to an indemnity policy where there's no obligation on NW to update them.

We've been trying to find out from NW what insurers have provide this type of indemnity policy but as we're not the buyer we don't have direct access and calling and messaging NW has just resulted in us going around in circles. Perhaps they can't disclose this information but it means we're paying our solicitor to repeatedly try different insurers and getting the same response that they won't agree to NW requirement.

jollyjacko1979

Hello,

We are going to be in the exact situation as you. Did you get the indemnity policy sorted out in the end?

Thanks 

MsJoss

Hi @jollyjacko1979

Sorry to hear you're going to be in the same situation.

Unfortunately, we've still not been able to find a suitable indemnity policy. Our estate agent is still trying though so if we have any luck, I'll let you know. If you also find one, would be great to hear too. 

Thanks

Lb12345

I think I will also be in the same position as you. Did you have any luck?
If not, I will let you know if I do. 

ACG

Speak to a local insurance broker.