What is indemnity insurance?
Anyone that has recently sold or bought a home, or currently going through the process, have now probably heard of an ‘indemnity policy’. Many property transactions are required to have a policy. Here we look at what these are and why they may be needed.
An Indemnity Policy is a protection insurance that is acquired during the conveyancing process of buying/selling a property. It is a one-off payment and the policy does not require renewing.
Typical reasons an indemnity policy is needed:
- Restrictive Covenants – Where the title of a property contains a restrictive covenant that has been breached.
- Adverse Possession – Where an owner has only possessory title, as they have claimed ownership of some land but do not have necessary evidence to satisfy Land Registry they are legal owner.
- Chancel Repair Liability – Protects the homeowner who lives within the boundaries of a parochial church council against having to pay towards repairs to the church.
- Planning Permission – Where building works have already been carried out, but with no evidence permission was obtained or complied with.
- Absence of Easement – This covers rights over access.
- Building Regulations – Where alterations have been made but building regulation paperwork is missing/incomplete.
- Missing Documents – If deeds or documents to a property are mentioned in the Land Registry entries but have not been supplied.
The seller is responsible for arranging the insurance and the cost. If a buyer is purchasing the property with a mortgage, the solicitor would have to report to the lender that an indemnity policy is required.
If you have any questions regarding selling your home, please feel free to contact David Long.