Indemnity policies when selling a house

marokomor12

Hi, 

I'm currently in the process of selling a house. 16 weeks in since draft contracts. House is 5 years old and there is no chain yet we are somehow still in the conveyancing process basically losing our minds here. 

I've been advised by my solicitor to buy indemnity policies that buyers solicitor is requesting, to solve all the outstanding queries and get things moving. Thing is, those add up to 800gbp...

Could anyone advise on below?

The Transfer for the original build is missing a plan. As the Land Registry does not hold a copy of the Transfer nor is one readily available from the original developer (not the one you bought from). It has been suggested that indemnity insurance be provided in this respect. The proposed policy would protect the buyers against financial loss in the event that a third party attempted to use the easements/services or enforce the covenants detailed against the missing plan. The cost of the policy is £213.00 and would be taken from the sale proceeds so no upfront payment is needed. Even if you are not agreeable to providing the policy, please do not approach any third parties in this respect as it may invalidate the proposed policy.

 

- The 1967 Conveyance affecting the land contains a covenant that no buildings be built upon the land. As the properties have been built and no covenant consent has been produced, the buyer’s solicitor has requested indemnity insurance in this respect.  The proposed policy would protect the buyers against a third party attempted to exercise the 1967 covenants or claim damages because of the works. The cost of the policy is £272.00 and would be taken from the sale proceeds so no upfront payment is needed. Even if you are not agreeable to providing the policy, please do not approach any third parties in this respect as it may invalidate the proposed policy.

 

- The buyer’s solicitor has determined that there is an outstanding leasehold interest detailed in the 1967 Conveyance which was not released. As such, they have requested indemnity insurance in this respect. The proposed policy would protect the buyers against a third party attempted to enforce the leasehold interest and claim damages because of the development. The cost of the policy is £128.80 and would be taken from the sale proceeds so no upfront payment is needed. Even if you are not agreeable to providing the policy, please do not approach any third parties in this respect as it may invalidate the proposed policy.

 

- Lastly, the buyer’s solicitor has deemed the transaction from your ex wife as a transaction at undervalue; this is why we have asked if the transaction was instructed under the basis of a court order. We will try and argue this back to the buyer’s solicitor (with your instruction) however they did request indemnity insurance in this respect. The indemnity insurance would protect the buyer’s against financial loss in the event that you were to become insolvent and the transfer is set aside by the Trustee in Bankruptcy. The cost of the policy is £175.00 and would be taken from the sale proceeds so no upfront payment is needed. They also requested a statutory declaration which would be your sworn evidence that you are not or believe you will not be insolvent in the immediate future.

user1977

Are you using different solicitors from when you bought? If so, has anybody contacted your buying solicitors about these issues? Seems odd that, for example, a plan would be missing from a registered deed only 5 years ago?

marokomor12

user1977 said:

Are you using different solicitors from when you bought? If so, has anybody contacted your buying solicitors about these issues? Seems odd that, for example, a plan would be missing from a registered deed only 5 years ago?

I am... Went with the one recommended by my estate agent as was promised a quick transaction, probably worst mistake ever. 
My solicitors contacted developer on few occasions so would think they received anything they could. About the plan you mentioned I think they talk about some plan from 60 or 70's.

Also I've confronted them about point 2 as the whole estate was provided with policy and I've got paperwork for ir but buyers solicitor is requesting one specific to my house.

BobT36

Is this Indemnity Insurance the new scam fad? (On top of the chemical damp treatment blablablabla). 
Some big boys must have a lot of investment in the provider's, and made this the answer to everything, surely? 

Has anyone even ever successfully claimed on one of these policies? 

user1977

BobT36 said:

Has anyone even ever successfully claimed on one of these policies? 

Yes, in the past I’ve been solicitor for title indemnity insurers. Though claims were about more significant issues.

Trouble is we seem to have reached the stage of paying solicitors to do all the due diligence, and then also paying the insurers to cover half the stuff which has already been investigated. Given actual problems occur once in a blue moon, it might make more sense just to get the insurance for all of the low-risk stuff, rather than also pay lawyers to spend time resulting in a non-committal answer. I think that tends to be what happens in the US.