Indemnity Policies - Leasehold

bolshydad1

Hello, 

I'm looking for some advice from anyone who may have found themselves in a similar situation. 

We've been trying to sell our property and purchase another for the past 8 months (using the same solicitors for both) 

We're right at the end of the process and all parties in the chain (only 3 houses, we're the middle of the chain) are wanting to aim for completion of the 2nd Dec. 

We've been back and forth with the sellers solicitors for months now around buyers enquiries. We required 4 indemnity policies to be raised to get these fully closed off. Only one was accepted with the below 3 being rejected:

- lack of access to neighbouring property in order to carry out repairs
- lack of mutual enforcement of covenants
- lack of right of shelter, support and protection

This is a leasehold property, the seller bought this home only 4 years ago and are certain these things weren't an issue when they bought. I asked if they were cash buyers at the time and they said no. 

Our solicitor proposed 3 options to move forward:

1)      Ask the lender if they’re happy to go ahead – but solicitors are obligated to tell them they had the indemnity policies rejected so they would have no insurance if anything happened

2)      Get a deed of variation on the lease which could take months

3)      Purchase the freehold 

It feels like none of these options would move this along quickly enough to still be on track for completion of the 2nd December. 

Yesterday, our solicitor reached out to the lender (HSBC) to ask for their position on this. 

Has anyone been in this situation and their lender has been happy with not having satisfactory details within the lease of the 3 points above? I'm not clued up on legal jargon so honestly not even sure how important they are or even relevant but can only assume they are for our solicitors to continue pushing on it. 

Any help would be so appreciated- this has been a long process and we're just feeling a little desperate at this point

bolshydad1

bump- can anyone offer any advice? feeling desparate!

user1977

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

rachel230

Presuming it's a house not a flat. 
What access would you need for maintenance? Is house detached in which case you should have maintenance space anyway. Has there been a previous neighbour dispute over access?
What covenants haven't been enforced?

bolshydad1

user1977 said:

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

The issue is that the indemnity policies have been rejected by the insurer used by the solicitor so trying to understand how important this is to the lender. 
The seller is covering the cost of the indemnities but yes each one would come with a cost

bolshydad1

rachel230 said:

Presuming it's a house not a flat. 
What access would you need for maintenance? Is house detached in which case you should have maintenance space anyway. Has there been a previous neighbour dispute over access?
What covenants haven't been enforced?

Yes this is a semi-detached flat. After speaking with the seller, they aren't aware of any issues that have come up regarding access.

I don't believe any covenants haven't been enforced which is why I don't know why these things are even relevant! It feels like the 3 indemnities we had rejected are more relevant to a lease agreement on flats or a space with shared tenants rather than a house but I'm honestly not sure?

user1977

bolshydad1 said:

user1977 said:

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

The issue is that the indemnity policies have been rejected by the insurer used by the solicitor so trying to understand how important this is to the lender. 
The seller is covering the cost of the indemnities but yes each one would come with a cost

Sorry, by "rejected" do you mean the seller is refusing to pay for them, or that it's impossible to get the insurance? The latter seems unlikely unless there's something else going on.

What advice has your solicitor given the lender about it?

bolshydad1

user1977 said:

bolshydad1 said:

user1977 said:

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

The issue is that the indemnity policies have been rejected by the insurer used by the solicitor so trying to understand how important this is to the lender. 
The seller is covering the cost of the indemnities but yes each one would come with a cost

Sorry, by "rejected" do you mean the seller is refusing to pay for them, or that it's impossible to get the insurance? The latter seems unlikely unless there's something else going on.

What advice has your solicitor given the lender about it?

sorry yes so when the solicitor raised the indemnities with their insurance provider, they rejected them. I have no idea why or on what grounds

The solicitor said to us that they have asked the lender if they're still happy for us to move forward without the indemnity policies but they will likely come back and ask for their legal advice, at which point they would be obliged to say they had raised indemnity policies and had them rejected by the insurer - this leads me to believe the lender wouldn't be happy to proceed but then I'm not sure where this leaves us or how the current owners didn't have this problem when they bought it 4 years ago!

user1977

bolshydad1 said:

user1977 said:

bolshydad1 said:

user1977 said:

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

The issue is that the indemnity policies have been rejected by the insurer used by the solicitor so trying to understand how important this is to the lender. 
The seller is covering the cost of the indemnities but yes each one would come with a cost

Sorry, by "rejected" do you mean the seller is refusing to pay for them, or that it's impossible to get the insurance? The latter seems unlikely unless there's something else going on.

What advice has your solicitor given the lender about it?

sorry yes so when the solicitor raised the indemnities with their insurance provider, they rejected them. I have no idea why or on what grounds

The solicitor said to us that they have asked the lender if they're still happy for us to move forward without the indemnity policies but they will likely come back and ask for their legal advice, at which point they would be obliged to say they had raised indemnity policies and had them rejected by the insurer 

That doesn't really help to advise anyone about what the risks are though. Has your solicitor explained to you what the risks are? Have they advised you whether or not you ought to buy? Why hasn't your solicitor tried other insurers?

bolshydad1

user1977 said:

bolshydad1 said:

user1977 said:

bolshydad1 said:

user1977 said:

Lender will amost certainly be satisfied with an indemnity policy/ies which cover all of the risks. We don't have enough information to advise on whether your solicitor is being excessively cautious. Are they charging you extra for each and every indemnity policy they "recommend"?

The issue is that the indemnity policies have been rejected by the insurer used by the solicitor so trying to understand how important this is to the lender. 
The seller is covering the cost of the indemnities but yes each one would come with a cost

Sorry, by "rejected" do you mean the seller is refusing to pay for them, or that it's impossible to get the insurance? The latter seems unlikely unless there's something else going on.

What advice has your solicitor given the lender about it?

sorry yes so when the solicitor raised the indemnities with their insurance provider, they rejected them. I have no idea why or on what grounds

The solicitor said to us that they have asked the lender if they're still happy for us to move forward without the indemnity policies but they will likely come back and ask for their legal advice, at which point they would be obliged to say they had raised indemnity policies and had them rejected by the insurer 

That doesn't really help to advise anyone about what the risks are though. Has your solicitor explained to you what the risks are? Have they advised you whether or not you ought to buy? Why hasn't your solicitor tried other insurers?

We have had multiple issues with these solicitors (they were recommended by the estate agents which came with a deferred fee) so maybe naively we thought due to them being recommended, we wouldn't have any issues. We haven't been advised on any of the risks or whether or not we should be buy. We've paid for a home buyers survey and structural engineer which hasn't flagged anything major, only cosmetic bits and bobs. They don't seem to think there are any other insurers they're able to use, they've instead suggested the sellers solicitors try and raise the indemnities their side with another insurer but before the indemnities were raised in the first place, the sellers solicitor passed it to ours as they didn't know what they were doing. The whole thing has been a real mess  

rachel230

Did the "recommended" solicitors give you a fixed price for the conveyancing? Are they trying to now make extra (unnecessary) work to push their fees up?
And they have said that the lender may require more legal advice (from them??)
Hmm.
This has a large whiff of suspicion around it - if I am reading correctly.
Have you googled the solicitors/looked on Trustpilot etc
I'm just looking at the ridiculous situation from another angle entirely.