Editor's Blog1 min ago
Indemnity Policy
I am about to buy a property but the deeds have been lost. I have been informed by the seller's solicitor that they will provide an Indemnity Policy. I understand that this will protect me in the future but I do not know much else. Do you know how long this will cover me or if there are any other actions I can take?
The seller is a family friend, the property was left to her in a will, and I knew the deceased woman that lived there. Is it safe for me to carry on with this sale, I don't want to live there forever and would be looking to sell in a few years.
The seller is a family friend, the property was left to her in a will, and I knew the deceased woman that lived there. Is it safe for me to carry on with this sale, I don't want to live there forever and would be looking to sell in a few years.
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Can't a copy of the deeds be obtained from the Land Registry? I assume the sellers solicitor are saying they will will set up an insurance policy that will pay out if ever it is found that the sale wasn't legal. How can you be sure? Your solicitor would be liable if that were the case but will they also still be in business (think double glazing companies).
It does depend on the circumstances, have these been explained?
Was the property unregistered (if so the Land Registry will not have the deeds and proof of title will come from the individual title documents)? Have all reasonable attempts been made to trace them rather than just relying on an indemnity policy?
Indemnity polices are not nessarily the coverall that people think they are and have become increasingly common these days in legal practice.
If you are getting a mortgage then it is likely the lender will need to approve the policy and certain conditions on the policy are likely to need to be fulfilled or the policy may not be enforceable. These can be before and after cover is put in place and likely to include certain efforts being made to trace missing deeds, possible statutory declarations and such. There may also be restrictions on things you can and can't do after the purchase such as certain parties you cannot approach.
I would ask to see a copy of the policy and have the terms of it explained to you including to cover limit and circumstances in which it can be used and what the any payout can actually be used for.
Think of the circumstances which could cause problems later on such as an "unknown" missing deed turning up proving that the property has not been validly transferred and someone else claiming that they legally own the property.
Or similarly a situation in which it does not appear that you own the full extent of the land you thought you purchased or there are onerous restrictions or problems which you are unaware of. Find out how any policy would be able to be used (or not) in such circumstances.
Was the property unregistered (if so the Land Registry will not have the deeds and proof of title will come from the individual title documents)? Have all reasonable attempts been made to trace them rather than just relying on an indemnity policy?
Indemnity polices are not nessarily the coverall that people think they are and have become increasingly common these days in legal practice.
If you are getting a mortgage then it is likely the lender will need to approve the policy and certain conditions on the policy are likely to need to be fulfilled or the policy may not be enforceable. These can be before and after cover is put in place and likely to include certain efforts being made to trace missing deeds, possible statutory declarations and such. There may also be restrictions on things you can and can't do after the purchase such as certain parties you cannot approach.
I would ask to see a copy of the policy and have the terms of it explained to you including to cover limit and circumstances in which it can be used and what the any payout can actually be used for.
Think of the circumstances which could cause problems later on such as an "unknown" missing deed turning up proving that the property has not been validly transferred and someone else claiming that they legally own the property.
Or similarly a situation in which it does not appear that you own the full extent of the land you thought you purchased or there are onerous restrictions or problems which you are unaware of. Find out how any policy would be able to be used (or not) in such circumstances.
I would also ask questions about any effect that the missing deeds would have in registering the property at the land registry, I would ask your solicitor if they have looked into this and whether they have checked that there will be no problem on registration and the class of title you will get.
You are very wise to consider any possible ramifications when you sell the property and need to make sure that everything is sorted to your satisfaction before you buy.
Ask for things to be explained to you so you understand what is happening and get it confirmed in writing if at all possible for your records.
Not trying to confuse or scare you but just wnted to give you an idea of what to talk through with your solicitor.
Hope it helps x
You are very wise to consider any possible ramifications when you sell the property and need to make sure that everything is sorted to your satisfaction before you buy.
Ask for things to be explained to you so you understand what is happening and get it confirmed in writing if at all possible for your records.
Not trying to confuse or scare you but just wnted to give you an idea of what to talk through with your solicitor.
Hope it helps x
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