When buying or selling a home, unexpected legal issues can arise during the conveyancing process. In many cases, Indemnity Policies offer a practical way to keep a residential property transaction moving without unnecessary delay or expense.
An Indemnity Policy is a one-off insurance policy that protects against financial loss caused by a specific legal issue affecting a property. Rather than fixing the problem, the policy provides cover if the issue later leads to enforcement action or a reduction in the property’s value.
These policies are widely used in conveyancing transactions and are usually acceptable to mortgage lenders.
Indemnity insurance is often arranged where a legal issue is low risk but difficult to resolve, such as:
Missing planning permission or building regulations approval
Breach of a restrictive covenant
Lack of a documented right of way or access
Missing title deeds
Potential chancel repair liability
For residential buyers and sellers, indemnity policies can:
Avoid delays to exchange and completion
Provide reassurance to buyers and lenders
Offer long-term protection with a single premium
When having any building work carried out at your property, check with the Local Authority as to whether the work requires Planning Permission and/or Building Regulation approval. The Interactive House on the planning portal is also a useful place to start before - Interactive House
Check your property’s Legal Title for any Restrictive Covenants. For example, some Titles require consent to be sought from the original Developer for any external alterations to your property. These do differ from property to property, so make sure you understand those that relate to your home. If you have any concerns please contact us and we can carry out a review of these for you.
If your property is unregistered, ensure that you hold all of the relevant Title Deeds to the property. Better yet, get in contact with one of the team to discuss getting your property registered at the Land Registry, which offers you protection against property fraud and reduces the risk of someone else claiming ownership of your property.
Indemnity policies have conditions. Most importantly, the issue must not be disclosed to third parties or local authorities, as this could invalidate the cover.
Please note that should you come to sell the Property in the future, you may be required to top up the policy if the value has increased substantially.
Our residential conveyancing team regularly advises Buyers and Sellers on Indemnity Policies, ensuring the right cover is in place and that transactions proceed smoothly.
If you have concerns about a legal issue affecting your property, we can guide you through the options and explain whether indemnity insurance is the right solution for you.