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Restrictive covenant - indemnity policy |
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If you are acting on behalf of a buyer who is offered the benefit of a
restrictive covenant indemnity policy, then do remember that there is an
obligation on you to carry out due diligence as to the adequacy of
that cover.
Apart from checking that the policy is still valid (!), consider
also:
- Have there been any claims made (if so, what was the outcome)?
- Is the amount of cover still sufficient?
- Will the policy cover the buyer’s use of the property?
- Do you need to see the original proposal form to see what the
proposed use was?
- Has the seller complied with all terms and conditions of the policy?
And will your client, the buyer, be able to comply with them?
- Will the original policy document be handed over on completion?
- Who is defined as the ‘insured’ and does it include successors in
title, lenders, and/or Ts, and their respective successors in title?
- Has the description of the property changed over time and is it still
clearly identifiable?
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December 2005 |
