MOFS Guide to Legal Indemnity Insurance - Flipbook - Page 24
It is not uncommon to see reference within both a title register, and
components thereof, to missing documentation with contents unknown,
or reference to rights and covenants, the nature of which cannot
Cover is widely available to protect against a third party enforcing, or
attempting to enforce, restrictive covenants, where you are purchasing
Land and breach of covenants has historically occurred, or where a
planned development is likely to breach the same. For the latter, cover
should really be considered on a pre-planning basis, as the planning
process is the most likely time a potential claimant would be put on notice.
For the same reason, post-planning cover is relatively easy to obtain,
particularly as an underwriter has ample opportunity to consider any
objections raised at planning.
There are many products available in the market to cover these risks and
wording differs between insurers, with some referring to any rights and
covenants within missing particulars (of a certain age), and some only
covering specific documents, underwritten on a case-by-case basis.
As with all forms of legal indemnity insurance, cover is not available in
respect of any rights or easements currently being exercised and, as such,
it can be difficult to assess the value of certain products where the nature
of any rights or restrictions is largely unknown.
As with general restrictive covenants, insurers will want to know who has
the benefit of any covenants (where known) and the dates and parties
referenced within missing deeds, particularly where development is
planned and any adjacent – and therefore possibly benefitting – parties are
put on notice by planning applications.
Insurers will normally ask for copies of any documents outlining the
original covenants and the beneficiary’s current status will form the bulk
of their research into the likelihood of a claim arising. For covenants which
restrict the type of development planned, it can be helpful if insurers are
provided with information about similar developments within or around
Did you know...
Reference to this type of documentation generally takes the
form of ‘missing’, ‘illegible’ or ‘destroyed by enemy action’,
much of it in the Second World War; for example, a German
bombing raid in Exeter on 4th May 1942 destroyed large parts
of the city, including an estimated one million documents in the
...are generally not covered by the market for a number of
reasons, mainly because positive covenants can be difficult
to quantity. An obligation to build something may differ in cost
over time and an obligation to maintain could lead to multiple
claims, making it very hard to establish the point at which a
claim would arise. That said, insurers are sometimes willing to
consider this type of cover, on a case-by-case basis, especially
in light of the fact that the burden of a positive covenant
does not automatically bind successors in title or is clearly
unenforceable for other reasons.
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