Indemnity insurance

Busadeano

Another indemnity policy question.

Were right at the last hurdle for purchasing a house. Lender sent the money last week. Then the "technical team" was going through the paper work to sign off for completion, and noticed the indemnity policy wasnt any good because the council knew about the extension but didnt sign it off.

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

We are waiting to hear if a bespoke policy can be done. If it cant im not sure what can be done. 

My thinking is if the lender isnt asking for it we should be able to say dont worry about it.

Any thoughts?

user1977

Busadeano said:

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

Any thoughts?

Who told you that? Your solicitor is also acting for your lender, it’s up to your solicitor whether the lender ought to be satisfied with the policy. And it doesn’t sound like they are.

Mark_d

The council know about the extension but haven't approved it.  You need them to make a decision urgently.

If the council will ultimately ask you to tear down the extension, then the value of the property might not align with the mortgage lenders criteria (LTV).

Your solicitor is working in your best interests.  So trust them and ask them for advice as and when you want it.

DullGreyGuy

Busadeano said:

Were right at the last hurdle for purchasing a house. Lender sent the money last week. Then the "technical team" was going through the paper work to sign off for completion, and noticed the indemnity policy wasnt any good because the council knew about the extension but didnt sign it off.

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

We are waiting to hear if a bespoke policy can be done. If it cant im not sure what can be done. 

My thinking is if the lender isnt asking for it we should be able to say dont worry about it.

Any thoughts?

Presumably the "technical team" work for the lender?

In principle, just because they've sent the money to your solicitor it doesn't automatically mean they have authority from the lender to hand it over to the seller. Like all money your solicitor handles it'll be sit in a client account and solicitors can't just do what they want with it. 

A bespoke policy can be done, bespoking an insurance policy comes with an additional cost on top of the additional cost there will be for the higher risk being transferred. If people will be happy to consider the costs is another matter. 

Busadeano

Mark_d said:

The council know about the extension but haven't approved it.  You need them to make a decision urgently.

If the council will ultimately ask you to tear down the extension, then the value of the property might not align with the mortgage lenders criteria (LTV).

Your solicitor is working in your best interests.  So trust them and ask them for advice as and when you want it.

Im pretty sure it past the point it can be asked to be torn down

Busadeano

Mark_d said:

The council know about the extension but haven't approved it.  You need them to make a decision urgently.

If the council will ultimately ask you to tear down the extension, then the value of the property might not align with the mortgage lenders criteria (LTV).

Your solicitor is working in your best interests.  So trust them and ask them for advice as and when you want it.

Sorry just to give more information.  I beleive the council were approached regarding building the extension under permitted development.  For reasons im not aware of it wasnt singned off when it was finished 

Busadeano

DullGreyGuy said:

Busadeano said:

Were right at the last hurdle for purchasing a house. Lender sent the money last week. Then the "technical team" was going through the paper work to sign off for completion, and noticed the indemnity policy wasnt any good because the council knew about the extension but didnt sign it off.

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

We are waiting to hear if a bespoke policy can be done. If it cant im not sure what can be done. 

My thinking is if the lender isnt asking for it we should be able to say dont worry about it.

Any thoughts?

Presumably the "technical team" work for the lender?

In principle, just because they've sent the money to your solicitor it doesn't automatically mean they have authority from the lender to hand it over to the seller. Like all money your solicitor handles it'll be sit in a client account and solicitors can't just do what they want with it. 

A bespoke policy can be done, bespoking an insurance policy comes with an additional cost on top of the additional cost there will be for the higher risk being transferred. If people will be happy to consider the costs is another matter. 

It the tecnical team in the solicitors . They are tge ones who sign off on the paper work before exchange/completion 

eddddy

Busadeano said:

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

You've probably misunderstood how things work.

Unless you have a very unusual setup, your solicitor represents 2 'parties'

1. You
2. Your mortgage lender

So your solicitor will inform you of any issues that affect you. And your solicitor will inform your mortgage lender of issues that affect them.

The indemnity insurance issue affects your mortgage lender, so the solicitor will inform them - and probably advise your mortgage lender not to proceed until the indemnity insurance is sorted out.


But... I assume this issue was spotted before you've exchanged contracts. So you haven't exchanged contracts yet.

Busadeano

eddddy said:

Busadeano said:

Now as far as im aware because the lender has sent the money its not them that is asking for this policy. Its just the solicitor covering themselves. 

You've probably misunderstood how things work.

Unless you have a very unusual setup, your solicitor represents 2 'parties'

1. You
2. Your mortgage lender

So your solicitor will inform you of any issues that affect you. And your solicitor will inform your mortgage lender of issues that affect them.

The indemnity insurance issue affects your mortgage lender, so the solicitor will inform them - and probably advise your mortgage lender not to proceed until the indemnity insurance is sorted out.


But... I assume this issue was spotted before you've exchanged contracts. So you haven't exchanged contracts yet.

Thats correct no exchange yet. I think they were going for exchange and completion very close together. 

It was spotted 2 days before they wanted to complete. But 2 months after they had the infomation for the policy

eddddy

Busadeano said:

Thats correct no exchange yet. I think they were going for exchange and completion very close together. 

It was spotted 2 days before they wanted to complete. But 2 months after they had the infomation for the policy

So your solicitor will probably send the mortgage money back to the lender, while this is sorted out.

I guess you can try complaining to your solicitors about failing the spot the issue earlier - unless they only just found out that the council knew about the extension.

(Out of interest, was it you who alerted the council - by asking them questions about the extension? Or was it the seller, maybe?)

Busadeano

A bespoke policy can be done, bespoking an insurance policy comes with an additional cost on top of the additional cost there will be for the higher risk being transferred. If people will be happy to consider the costs is another matter. 

The seller has agreed to pay for it. When the sellers solicitor was made aware the policy wasnt sufficient. They asked whats needed , our solicitor replied basically thats for you figure out. Which obviously isnt helpfull. Our solicitor seems really !!!!!! poor at communicating anything. Its all very frustrating