MOFS Guide to Legal Indemnity Insurance - Flipbook - Page 28
Information required (continued)
Insurance for Portfolios (Good & Marketable Title)
•If planning has been granted, insurers will need to be provided with
details of any objections and, if possible, copies of the letters. A link to
the local authority’s planning portal is required. A copy of the planning
officer’s report to the planning committee and the decision notice is also
useful to provide insurers.
Policies of this nature provide protection against unknown title risks and
unexpected third-party challenges to title and legal ownership issues. The
policies provide protection and can significantly speed up the disposal,
acquisition or re-finance of multiple property assets.
•A legal assessment of the RTL position is very useful and preferable
before we approach insurers, but insurers appreciate this is not often
undertaken until after the RTL survey so initially any legal assessment
for the land acquisition or report on title can be helpful instead. This may
identify whether there are any express rights granted (or released) in
previous conveyances and any other title issues which may be relevant
such as covenants with height restrictions for example.
•Photographs of the property and the affected adjoining properties
are always useful. Wherever possible, area permitting, we would be
happy to conduct a site visit to help gain a better understanding of
the development and surrounding area and therefore can assist with
photographs of the site to provide to insurers.
• Details of any pre-application or public consultation prior to planning.
•Full disclosure of any communication with affected parties and any
proposed communication which may be required in future especially
party wall awards, crane oversail or scaffolding licences. Confirmation
of the names of the surveyors acting for the adjoining property owners
•Please let us know if you are aware of details of any similar
developments in the immediate area that could also have an impact on
the right to light of neighbours.
The use of ‘Good and Marketable Title’ indemnity policies to aid property
portfolio transactions has been around for a long time but they have
evolved considerably in recent years.
They were originally based on an American concept providing blanket
insurance for any defects in title as a non-fault cover to back up due
diligence rather than only insuring for specific identified known risks.
American owned insurers brought this type of cover into the UK over
thirty years ago but in recent years senior underwriters in the industry
have moved and obtained capacity with European insurers, subsequently
developing similar products with them.
The use of portfolio indemnity insurance saw a sharp increase a few
years ago especially during the tail end of the recession, largely because
they are particularly useful for distressed asset auction sales where an
administrator is involved and no title warranties are given.
Additionally, the work we have done at MOFS has helped structure policies
in a more usable format, increasing their use.
Over the years, we have been involved in the arrangement of cover
alongside many of the top UK law firms and subsequently the policy
wording has evolved and the level of cover provided has developed into
a very comprehensive product. We have also helped arrange a policy
structure allowing payment to be staged, therefore guaranteeing cover
early within the transaction, protecting both vendor and buyer. MOFS has
helped arrange cover for numerous portfolios within the past few years,
totalling several billion pounds.
Policies are very flexible in terms of how much due diligence needs to be
done; this means that cover can in theory replace the need to do any due
diligence on the title of the properties, or alternatively allow you to report
on a limited number of properties - dealing with any identified defects
separately - whilst underpinning the remaining properties with the full
protection of the good & marketable title cover. The policy also protects
against problems which may not be identifiable during normal due diligence
such as fraud, forgery, incapacity by prior owners or boundary issues.
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