The Conveyancing Protocol published by the Conveyancing Association (http://www.theconveyancingassociation.co.uk) and endorsed this week by the Society of Licensed Conveyancers is an attempt to streamline and standardise the conveyancing process by setting agreed responses to the title problems and delays that often occur. Instead of conveyancers “taking a view” on the importance of matters disclosed in the process, the Conveyancing Protocol establishes what that “view” should be and in doing so emphasises the essential role that Defective Title Insurance can play in the process.
Most interestingly the protocol seeks to conclusively define when indemnity insurance will be required for properties where planning or building regulations approval is not available:
No Planning Permission
Works carried out without planning permission within the last 12 months
The Seller must perfect its title by obtaining a regularisation certificate or getting a bespoke indemnity insurance policy to protect the Buyer and its Lender.
Works were completed within the last 4 years without permission
The Sellers Conveyancer should advise their client to obtain indemnity insurance and where this is not forthcoming the Buyers Conveyancer must advise them to get a policy. Most often the obtaining of the policy will be a requirement of the Lender in any event.
Change of Use in the last 10 years without permission
This will need to be considered and Indemnity Insurance may be a means of dealing with this.
No Building Regulations Approval
Works carried out after 1984 where no Completion Certificate is available
The Seller should be advised to obtain (or be responsible for the cost of) Indemnity Insurance against enforcement action.
The Conveyancing Association also seek to regularise the position where there is a potential breach of an unknown restrictive covenant. Where a pre-1925 deed is not available but is known to contain restrictive covenants then a Seller can obtain indemnity Insurance but this is not seen as mandatory. In the case of a post 1925 missing deed which contains restrictive covenants then the Seller should be advised that this is a defective title and that indemnity insurance is required.
Known breaches of restrictive covenant will require a bespoke policy where the breach is less than 1 year old and a standard policy where the breach occurred less than 20 years ago.
Whilst the Protocol does not make any recommendations regarding Indemnity insurance for searches it is clearly in the spirit of the more streamlined procedure envisaged by the Conveyancing Association that Conveyancers should consider this where it is appropriate for the Buyer and their Lender. Most Lenders will accept insurance and Conveyancers should refer to the CML Hand book for individual lender requirements.
Robert Kelly, Commercial Business Development Manager
Robert joined Stewart Title in 2013 after 25 years of experience as a Commercial Property lawyer specialising in development and portfolio management. During his career, Robert has worked with regional and national developers, retailers and landowners on a wide variety of schemes. This experience plays a vital part in his role working closely with interested parties to use Indemnity Insurance to resolve title problems and facilitate development and use of property.
Robert can be contacted via email: [email protected] or via mobile: 07415 240 703