UK Conveyancing Indemnity Policy 1
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UK Conveyancing Indemnity Policy 1
12/01/1995
V
1
STEWART TITLE
Insurance Company (UK) Limited
CONVEYANCING INDEMNITY POLICY
Subject to the Exclusions From Coverage and Exceptions contained in SCHEDULE B and the Conditions hereof, STEWART TITLE INSURANCE COMPANY (UK) LIMITED (herein called the “Company”), insures the Insured as of the Policy Date shown in SCHEDULE A, against loss or damage, not exceeding the Amount of Insurance stated in SCHEDULE A, and in addition to the Amount of Insurance costs, legal fees and expenses which the Company may become obligated to pay hereunder, sustained or incurred by the Insured by reason of:
1. Title to the estate or interest in the Property described in SCHEDULE A being vested otherwise than as stated therein;
2. Any defect in such title, or any defect or claim of a defect in or invalidity of any of the deed(s) mortgage(s) or other instruments by which title is vested as stated in SCHEDULE A;
3. Lack of capacity or other disability of any predecessor in title from any cause (including but not limited to that arising from bankruptcy or insolvency proceedings);
4. Covenants adversely affecting or restricting the current use and enjoyment of the Property at the Policy Date;
5. Lack of access to and egress from the Property (including those relating to provision of the utilities set out in Schedule B);
6. Any inaccuracy or omission in the replies to the usual form of search and enquiries (including Additional Enquiries where appropriate) to a local authority or other body (including but not limited to mining or commons registration searches) of whom searches and enquiries are usually made, or changes therein prior to the Policy Date whether such replies are obtained by personal search or otherwise;
7. Lack of necessary planning permission and/or building regulation approval relating to the use of the Property at the Policy Date;
8. Overriding Interests” in the event that the Property is registered land as defined in section 70(1) Land Registration Act 1925 or other similar rights affecting or applicable to unregistered land;
9. Any of the foregoing defects affecting a superior estate upon which the insured leasehold interest depends; inconsistency of the Insured Leasehold with any superior estate; forfeiture of the Insured Leasehold by reason of the non-performance (including non-payment of rent), of any obligation imposed by the superior Leasehold Interest which had matured and was due to be performed or paid prior to the Policy Date, but not otherwise;
10. The invalidity or unenforceability of an Insured Mortgage against the said estate or interest in the Property, except to the extent that such liability is excluded under Exclusion 3 below;
11. The priority of any other mortgage, encumbrance or charge over an Insured Mortgage;
12. Invalidity or unenforceability of any assignment of an Insured Mortgage or the failure of the assignment to vest title to the Insured Mortgage in the named assignee, provided that the document evidencing the indebtedness is assigned and delivered and all fees, charges, and stamp duties, if any, arising by reason of such assignment have been paid;
13. Failure of a Company approved solicitor or licensed conveyancer to perform the Standing Instructions relating to the loan, mortgage or completion in all material respects; and,
14. The contents of the report on title submitted by a Company approved solicitor or licensed conveyancer in respect of the Property not being true and accurate in all material respects.
The Company shall have the right, but not the duty, to conduct the defence in any litigation which is based on an alleged defect insured against by this Policy and shall pay all the legal costs, fees and expenses incurred in such defence. However, the Company may terminate its entitlement to defend by exercising any of the options listed in Condition 6 below.
In witness whereof, STEWART TITLE INSURANCE COMPANY (UK) LIMITED has caused this Policy to be executed by its duly authorised officer at the Policy Date shown in SCHEDULE A.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this Policy, and the Company will not pay any loss or damage, costs, legal fees or expenses that arise by reason of:
1. Matters that would be disclosed by an inspection of the Property at the Policy Date, save to the extent that they fall within Insuring Clause 8 above;
2. Charges in use subsequent to the Policy Date which do or may contravene any applicable bye-law or regulation;
3. Defects, encumbrances, adverse claims or other matters:
4. Invalidity or unenforceability of an Insured Mortgage which arises out of the transaction evidenced by the Insured Mortgage and is based upon an alleged breach of the Consumer Credit Act 1974, or any regulations made thereunder, or any statutory modification or re-enactment thereof;
5. Rights and title of the Crown and of statutory bodies in and to precious metals, petroleum, coal and related substances in or under the Property, and related rights to use the Property for such purposes;
6. Any claim which arises by reason of the bankruptcy or insolvency of the Insured Claimant;
7. Any loss which arises by reason of the existence of a Compulsory Purchase Order in respect of the whole or part of the Property, save to the extent that such order is not known to the Insured Claimant as a result of an error or omission covered under Insuring Clause 7 above; and,
8. Any loss arising by reason of the Insured Claimant’s participation or involvement in any criminal activity resulting in the conviction of the Insured Claimant or any party acting in collusion with the Insured Claimant, and/or by reason of any compensatory, restitutionary or confiscatory order made in or as a result of such conviction.
CONDITIONS
1. DEFINITION OF TERMS.
The following terms when used in this Policy mean:
(a) “Insured”: those parties named in SCHEDULE A of the Policy as Insured Lender and Insured Owner for their respective rights and interests. When both Insured Lender and Insured Owner are named in SCHEDULE A, their interests under this Policy shall be deemed to be composite. The term “Insured” also includes:
(b) “Insured Claimant”: an Insured claiming loss or damage;
(c) “Knowledge” or “Known”: actual notice, not constructive knowledge or notice of an Insured by reason of public records or any other documents which impart information affecting the Property;
(d) “Property”: the land described or referred to in SCHEDULE A, and improvements affixed thereto that by law constitute part of the Property. The term “Property” does not include any property beyond the lines of the area described or referred to in SCHEDULE A, nor any right, title, interest, estate or easement in abutting properties, highways (whether adopted or not), rivers or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the Property is insured by this Policy;
(e) “Insured Mortgage”: any mortgage, charge, pledge or other instrument intended to create security for the Insured Lender over the Property;
(f) “Public records”: records established under legislation at the Policy Date for the purpose of imparting constructive notice of matters relating to the Property;
(g) “Access”: legal right of access to the Property and not the physical condition of the access. The coverage provided as to access does not assure the adequacy or sufficiency of the access for the use intended;
(h) “ Defect”: the invalidity, inaccuracy, or other lack of enforceability of any deed conveying title to the Property or any part thereof that causes title to be vested other than as stated in SCHEDULE A;
(i) “”Unmarketable”: an alleged or apparent matter affecting the title to the Property, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in SCHEDULE A, or a purchaser of the Insured Mortgage, to be released from the obligation to purchase by virtue of a contractual term or condition requiring the transfer of good title;
(j) “Policy Date”: the date set out in SCHEDULE A to this Policy;
(k) “Insured Leasehold”: the leasehold interest, details of which are set out in Schedule A to this Policy.
2. CONTINUATION OF INSURANCE.
a) After Acquisition of Title. The coverage provided by this Policy shall continue in force from the Policy Date in favour of:
b) After Further Transfer of Title. The coverage provided by this Policy shall continue in force as of the Policy Date in favour of an Insured Owner only so long as an Insured Owner retains an estate or interest in the Property, or for so long as an Insured Owner shall have liability by reason of covenants made or given by an Insured Owner in any transfer or conveyance for valuable consideration of the estate or interest in the Property. This Policy shall not continue in force in favour of any transferee from the Insured Lender of an estate or interest in the Property or in favour of a transferee of any indebtedness secured by a Mortgage given to an Insured Lender provided that nothing shall affect the cover afforded under Condition 2(a)(ii).
c) Amount of Insurance. The amount of insurance after acquisition or after further transfer shall in neither event exceed:
3. NOTICE OF CLAIM AND PROOF OF LOSS OR DAMAGE TO BE PROVIDED BY INSURED.
The Insured (or any person claiming the benefit of cover under Condition 2 (a)) shall notify the Company promptly in writing:
(i) in case of any litigation instituted against the Insured affecting the Property which is or may be adverse to the Insured’s title to the estate or interest in the Property or the Insured Mortgage, and that might cause loss or damage for which the Company may be liable by virtue of this Policy in which case the provisions of Condition 4 shall apply;
(ii) in case knowledge shall come to an Insured hereunder of any claim concerning title or interest that is or may be adverse to the Insured’s title to the estate or interest in the Property or the Insured Mortgage, and that might cause loss or damage for which the Company may be liable by virtue of this Policy;
(iii) If prompt notice in writing shall not be given to the Company, then as to such Insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required;
(iv) Where notice under Condition 3(ii) above has been provided to the Company, a proof of loss or damage signed by such Insured Claimant shall be furnished to the Company within 90 days after the date such notice is given, or such longer period as may be agreed in writing by the Company. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or other matter insured against by this Policy which constitutes the basis of the loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the Insured Claimant to provide the required proof of loss or damage, the Company’s obligation to such Insured under the policy shall terminate, including any liability or obligation to institute or defend any litigation, with regard to the matter or matters requiring such proof of loss or damage;
(v) The Insured Claimant may be required to submit to examination by any authorised representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorised representative of Company, all records, books, ledgers, cheques, correspondence and memoranda, whether bearing a date before or after the Policy Date, which are within his possession, custody or power which reasonably pertain to the loss or damage. Further, if requested by any authorised representative of the Company, such Insured Claimant shall grant its permission, in writing, for any authorised representative of the Company to examine, inspect and copy all records, books, ledgers, cheques, correspondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage so far as such are within the power of the Insured Claimant to give such permission. All information designated as confidential by such Insured Claimant provided to the Company pursuant to this section shall not be disclosed to any third party unless, in the reasonable judgment of the Company, such disclosure is necessary in the administration of the claim, save where disclosure is required by rules or order of the Court;
(vi) Failure of an Insured Claimant to submit for examination, produce other reasonably requested information or grant permission to secure reasonably necessary information from parties as required in this paragraph shall terminate any liability of the Company under this policy as to that claim;
(vii) When an Insured notifies the Company under Condition 3(ii) and provides a Proof of Loss, the Company shall investigate the notification to determine whether the lien, encumbrance, or adverse claim is valid and not barred by law or statute. If the Company concludes that the lien, encumbrance, or adverse claim is not covered by this Policy, or was otherwise addressed in the completion of the transaction in connection with which this Policy was issued or is not valid and enforceable, the Company may advise such Insured of the reasons for its determination and shall have no obligation to undertake other action. The Company shall have no obligation to rectify potential claims upon the title or interest or other matters, where a third party is not asserting a superior interest or title. If the Company concludes that the lien, encumbrance, or adverse claim is or may be valid and enforceable, the Company may at its sole discretion take one of the following actions:
(viii) in the event that the Amount of Insurance stated in SCHEDULE A in respect of the Insured Owner is less than the value of the insured estate or interest at the Policy Date or the full consideration paid for the Property, whichever is less, then in such event, as to any potential loss, the Company shall only pay the loss pro rata in the proportion that the Amount of Insurance at the Policy Date (exclusive of any improvements made subsequent to the Policy Date) bears to the total value of the insured estate or interest at the Policy Date.
4. DEFENCE AND PURSUIT OF ACTIONS: DUTY OF INSURED TO CO-OPERATE.
(a) The Company may provide for the defence of an Insured in litigation initiated by a third party which is notified to the Company promptly in accordance with Condition 3(i) in which any third party asserts a claim adverse to the title or interest of the Insured, where those pleaded causes of action include allegations of a lien or encumbrance or other matter insured against by this Policy. The Company shall have the right to select solicitors, counsel and experts of its own choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those pleaded causes of action and shall not be liable for and will not pay the fees of any other solicitors, counsel or experts. The Company will not pay any portion of the fees, costs or expenses incurred by the Insured in the defence of those causes of action that allege matters not insured against by this Policy whether such allegations are included in the same or separate litigation or otherwise.
(b) Whenever the Company shall have instituted an action or conducted the defence of an action as permitted by the provisions of this Policy, whether in the name of the Insured or not, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or order, provided always that no action shall be defended unless Queen’s Counsel selected by agreement between the parties shall advise that there are reasonable prospects of success in defending such action.
(c) In all cases where this Policy permits or requires the Company to institute or to defend any actions or proceeding, the Insured shall provide to the Company the right to so institute or defend the action or proceeding and all appeals therein, and permit the Company to use, at the Company’s option, the name of such Insured for this purpose and shall execute any power of attorney or other documents requested by Company for such action or proceedings.
(d) Whenever requested by the Company, the Insured, at the Company’s expense, shall give the Company all reasonable assistance:
5. EXTENT OF LIABILITY.
This Policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the Insured by reason of matters insured against by this Policy and only to the extent herein described.
(a) The liability of the Company under this Policy shall not exceed the lesser of:
(b) In the event such Insured has acquired the estate or interest in the manner described in Condition 2(a) or has conveyed the title, then the liability of the Company shall be as set forth in Condition 7(a).
6. APPORTIONMENT.
If the property described in SCHEDULE A consists of two or more parcels which are not used as a single site, and a loss is established affecting one or more of the parcels but not all, the loss shall be computed and settled on a pro rata basis as if the Amount of Insurance under this Policy was divided pro rata as to the value on the Policy Date of each separate parcel to the whole, exclusive of any improvements made subsequent to the Policy Date, unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the Insured at the time of the issuance of this Policy and shown by an express statement on or by endorsement to this Policy.
7. LIMITATION OF LIABILITY.
(a) If the Company establishes the title, or removes the alleged lien or encumbrance, or otherwise establishes the Insured Mortgage, as insured, or rectifies the adverse claim to the title, or takes action in accordance with Conditions 3 or 4, by any method, including litigation and the completion of any appeals therefrom it elects to undertake, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby;
(b) In the event of any litigation, including litigation by the Company or with the Company’s consent, the Company shall have no liability for any loss or damage until and unless there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title or to the Insured Mortgage, or the time limit for the issue or service of any such appeal has expired;
(c) The Company shall not be liable for loss or damage to any Insured for liability voluntarily assumed by such Insured in settling any claim or suit without the prior written consent of the Company; and
(d) The Company shall not be liable for:
8. REDUCTION OF INSURANCE: REDUCTION OR TERMINATION OF LIABILITY.
(a) All payments under this Policy, other than those applicable to legal costs or expenses, shall reduce the Amount of Insurance pro rata;
(b) Payment in part by any person of any portion of the principal indebtedness, or any other obligation secured by the Insured Mortgage, or any voluntary partial satisfaction or release of the Insured Mortgage, to the extent of the payment, satisfaction or release, shall reduce the Amount of Insurance pro rata to such payment so far as the Insured Lender is concerned. The Amount of Insurance may thereafter be increased by accrued interest and advances made to protect the Insured Mortgage secured thereby (subject to the provisions of Condition 2 above), with interest thereon, provided in no event shall the amount of insurance be greater than the Amount of Insurance stated in SCHEDULE A; and,
(c) Payment in full by any person or the voluntary satisfaction, discharge or release of the Insured Mortgage shall terminate all liability of the Company to the Insured Lender.
9. LIABILITY NON-CUMULATIVE.
If the Insured acquires title to the estate or interest in satisfaction of the indebtedness secured by the Insured Mortgage, or any part thereof, the Amount of Insurance under this Policy shall be reduced by any amount the Company may pay under any separate policy insuring a mortgage to which exception is taken in SCHEDULE B or to which such Insured has agreed, assumed, or taken subject, or which is hereafter executed by an Insured and which is a charge or lien on the estate or interest described or referred to in SCHEDULE A, and the amount so paid shall be deemed a payment under this Policy.
10. THE INSURED’S RESPONSIBILITIES.
(a) The owner of the indebtedness secured by the Insured Mortgage, provided the priority of the Insured Mortgage or its enforceability is not affected, may release or substitute the personal liability of any debtor or guarantor, or extend or otherwise modify the terms of payment, or release a portion of the estate or interest from the lien of the Insured Mortgage, or release any collateral security for the indebtedness; and,
(b) When the permitted acts of an Insured occur and such Insured has knowledge of any claim of title or interest adverse to the title to the estate or interest or the priority or enforceability of the Insured Mortgage, the Company shall only be required to pay that part of any losses insured against by this Policy that shall exceed the amount, if any, lost to the Company by reason of the impairment by such Insured of the Company’s right of subrogation.
11. SUBROGATION UPON PAYMENT OR SETTLEMENT.
a) The Company’s Right of Subrogation.
Whenever the Company shall have settled and paid a claim under this Policy, all rights of subrogation shall vest in the Company unaffected by any act of such Insured. The Company shall be subrogated to and be entitled to all rights and remedies that such Insured would have had against any person or property in respect of the claim had this Policy not been issued. If requested by the Company, such Insured shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect that right of subrogation. Such Insured shall permit the Company to sue, compromise or settle in the name of such Insured and to use the name of such Insured in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of such Insured, the Company shall be subrogated to all rights and remedies of such Insured after such Insured shall have recovered its principal, interest, and legal costs.
b) The Company’s Right Against Non-insured Persons.
The Company’s right of subrogation against non-insured persons shall exist and shall include, without limitation, the rights of such Insured to indemnities, guarantees, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that provide for or affect the right of subrogation. The Company’s right of subrogation shall not be avoided by acquisition of the Insured Mortgage by a party who acquires the Insured Mortgage as a result of an indemnity, guarantee, other policy of insurance, or bond and such person will not be an insured under this Policy, notwithstanding Section l(a)(i) of these Conditions.
12. ARBITRATION.
If liability under the Policy is otherwise admitted, any dispute or difference relating to the amounts of any payment by the Company shall be referred to arbitration under the provisions of the Arbitration Acts 1950-1979 or any statutory modification or re-enactment thereof to any person nominated by agreement between the parties, or in default appointed by the president for the time being of The Royal Institution of Chartered Surveyors.
13. SEVERABILITY.
In the event any provision of this Policy is held invalid or unenforceable under the applicable law, the Policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect.
14. DISCLOSURE BY INSURED.
This entire Policy shall be void if, whether before or after a loss, an Insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of an Insured therein, or in case of any fraud by an Insured related thereto. Provided, however, that the Company will not deny its liability, if any, to an Insured on the ground of concealment or misrepresentation of a material fact or facts of an Insured Lender or Insured Owner being imputed to an Insured Lender or Insured Owner who does not possess such knowledge of concealed or misrepresented matter of fact or facts.
15. VALUE INDEX PROTECTION.
Notwithstanding anything contained in the Policy to the contrary, the amount of insurance provided by the Policy shall be subject to cumulative annual increase adjustments, solely on behalf of the named Insured Owner, as stated in SCHEDULE A of the Policy, in the manner so provided herein below:
(a) an upward adjustment, not to exceed the most current annual increase, if any, of the Retail Price Index, will be made on each of the first five consecutive and successive anniversary dates of the Policy provided however, that each such increase will be no greater than ten per cent (10%) per annum of the Amount of Insurance;
(b) that the maximum amount of insurance shall never exceed one hundred fifty per cent (150%) of the Amount of Insurance stated in SCHEDULE A of the Policy relative to such Insured Owner; and,
(c) there shall be no annual adjustment in the Amount of Insurance for years in which there is no increase or a decrease in said Retail Price Index.
16. NOTICES.
Any notices or other statements in writing required to be given to the Company shall include the number of this Policy and shall be addressed to the Company at Stewart Title (GB) Limited, 200-201 High Street, Exeter, Devon, EX4 3EB. Any notices required to be given to the Insured shall be given at the address stated in Schedule A, or such other address as may be notified from time to time in writing by the Insured to the Company.
17. GOVERNING LAW.
This Policy shall be governed by and construed in all respects in accordance with English Law and the parties hereto agree to submit any dispute or difference (save for those covered under Condition 14 hereof) to the jurisdiction of the English Courts.
18. GENERAL.
(a) This Policy together with all endorsements, if any, attached hereto by the Company is the entire contract between the Insured and the Company. In interpreting any provision of this Policy, this Policy shall be construed as a whole; and,
(b) No amendment of or endorsement to this Policy can be made except by writing endorsed hereon or attached hereto signed by either the Secretary, an Assistant Secretary, or other authorised signatory of the Company.
SCHEDULE A
Policy Number:
File Reference:
Policy Date:
Amount of Insurance:
1. Name of Insured Owner:
2. Name of Insured Lender:
3. The estate or interest in the Property referred to herein is at the Policy date a ___________ estate and is vested in:
4. The Property referred to in this policy is described as:
5. If this schedule A is attached to a Lender’s policy, the Insured Mortgage, which encumbers the Property referred to herein, and the assignments of such mortgage, if any, are described as:
6. Issuing Agent:
SCHEDULE B
Policy Number:
File Reference:
EXCEPTIONS FROM COVERAGE
This Policy does not insure against loss or damage (and the Company will not pay costs, legal fees or expenses) that arise by reason of the terms and conditions of the leases and easements, if any, shown in SCHEDULE A, and the following matters:
1. Matters that would be disclosed by an inspection of the Property.
2. Any discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping of improvements.
3. (Insert here all other specific exceptions as to liens, easements, etc.)
Insurance Company (UK) Limited
CONVEYANCING INDEMNITY POLICY
Subject to the Exclusions From Coverage and Exceptions contained in SCHEDULE B and the Conditions hereof, STEWART TITLE INSURANCE COMPANY (UK) LIMITED (herein called the “Company”), insures the Insured as of the Policy Date shown in SCHEDULE A, against loss or damage, not exceeding the Amount of Insurance stated in SCHEDULE A, and in addition to the Amount of Insurance costs, legal fees and expenses which the Company may become obligated to pay hereunder, sustained or incurred by the Insured by reason of:
1. Title to the estate or interest in the Property described in SCHEDULE A being vested otherwise than as stated therein;
2. Any defect in such title, or any defect or claim of a defect in or invalidity of any of the deed(s) mortgage(s) or other instruments by which title is vested as stated in SCHEDULE A;
3. Lack of capacity or other disability of any predecessor in title from any cause (including but not limited to that arising from bankruptcy or insolvency proceedings);
4. Covenants adversely affecting or restricting the current use and enjoyment of the Property at the Policy Date;
5. Lack of access to and egress from the Property (including those relating to provision of the utilities set out in Schedule B);
6. Any inaccuracy or omission in the replies to the usual form of search and enquiries (including Additional Enquiries where appropriate) to a local authority or other body (including but not limited to mining or commons registration searches) of whom searches and enquiries are usually made, or changes therein prior to the Policy Date whether such replies are obtained by personal search or otherwise;
7. Lack of necessary planning permission and/or building regulation approval relating to the use of the Property at the Policy Date;
8. Overriding Interests” in the event that the Property is registered land as defined in section 70(1) Land Registration Act 1925 or other similar rights affecting or applicable to unregistered land;
9. Any of the foregoing defects affecting a superior estate upon which the insured leasehold interest depends; inconsistency of the Insured Leasehold with any superior estate; forfeiture of the Insured Leasehold by reason of the non-performance (including non-payment of rent), of any obligation imposed by the superior Leasehold Interest which had matured and was due to be performed or paid prior to the Policy Date, but not otherwise;
10. The invalidity or unenforceability of an Insured Mortgage against the said estate or interest in the Property, except to the extent that such liability is excluded under Exclusion 3 below;
11. The priority of any other mortgage, encumbrance or charge over an Insured Mortgage;
12. Invalidity or unenforceability of any assignment of an Insured Mortgage or the failure of the assignment to vest title to the Insured Mortgage in the named assignee, provided that the document evidencing the indebtedness is assigned and delivered and all fees, charges, and stamp duties, if any, arising by reason of such assignment have been paid;
13. Failure of a Company approved solicitor or licensed conveyancer to perform the Standing Instructions relating to the loan, mortgage or completion in all material respects; and,
14. The contents of the report on title submitted by a Company approved solicitor or licensed conveyancer in respect of the Property not being true and accurate in all material respects.
The Company shall have the right, but not the duty, to conduct the defence in any litigation which is based on an alleged defect insured against by this Policy and shall pay all the legal costs, fees and expenses incurred in such defence. However, the Company may terminate its entitlement to defend by exercising any of the options listed in Condition 6 below.
In witness whereof, STEWART TITLE INSURANCE COMPANY (UK) LIMITED has caused this Policy to be executed by its duly authorised officer at the Policy Date shown in SCHEDULE A.
EXCLUSIONS FROM COVERAGE
The following matters are expressly excluded from the coverage of this Policy, and the Company will not pay any loss or damage, costs, legal fees or expenses that arise by reason of:
1. Matters that would be disclosed by an inspection of the Property at the Policy Date, save to the extent that they fall within Insuring Clause 8 above;
2. Charges in use subsequent to the Policy Date which do or may contravene any applicable bye-law or regulation;
3. Defects, encumbrances, adverse claims or other matters:
| (a) created, suffered, assumed or agreed to by an Insured; |
| (b) not known to the Company, nor registered at the Policy Date, but known to an Insured and not disclosed in writing to the Company by an Insured prior to the date such Insured became an Insured under this Policy; |
| (c) resulting in no loss or damage to an Insured; |
| (d) attaching or created subsequent to the Policy Date; |
| (e) resulting in loss or damage which would not have been sustained if an Insured Claimant had paid value in good faith to acquire title to an estate or interest or an Insured Mortgage; |
4. Invalidity or unenforceability of an Insured Mortgage which arises out of the transaction evidenced by the Insured Mortgage and is based upon an alleged breach of the Consumer Credit Act 1974, or any regulations made thereunder, or any statutory modification or re-enactment thereof;
5. Rights and title of the Crown and of statutory bodies in and to precious metals, petroleum, coal and related substances in or under the Property, and related rights to use the Property for such purposes;
6. Any claim which arises by reason of the bankruptcy or insolvency of the Insured Claimant;
7. Any loss which arises by reason of the existence of a Compulsory Purchase Order in respect of the whole or part of the Property, save to the extent that such order is not known to the Insured Claimant as a result of an error or omission covered under Insuring Clause 7 above; and,
8. Any loss arising by reason of the Insured Claimant’s participation or involvement in any criminal activity resulting in the conviction of the Insured Claimant or any party acting in collusion with the Insured Claimant, and/or by reason of any compensatory, restitutionary or confiscatory order made in or as a result of such conviction.
CONDITIONS
1. DEFINITION OF TERMS.
The following terms when used in this Policy mean:
(a) “Insured”: those parties named in SCHEDULE A of the Policy as Insured Lender and Insured Owner for their respective rights and interests. When both Insured Lender and Insured Owner are named in SCHEDULE A, their interests under this Policy shall be deemed to be composite. The term “Insured” also includes:
| (i) The creditor in respect of the indebtedness secured by an Insured Mortgage and each successor in ownership of the indebtedness (reserving, however, all rights and defences as to any successor that the Company would have had against any predecessor Insured, unless the successor acquired the indebtedness as a purchaser for value without knowledge of the asserted defect, lien, encumbrance, adverse claim or other matter insured under this Policy as affecting title to the estate or interest in the Property); and, |
| (ii) Subject to any rights or defences the Company would have had against the named Insured, those who succeed to the interest of the Insured by operation of law as distinguished from purchase or other transfer. |
(b) “Insured Claimant”: an Insured claiming loss or damage;
(c) “Knowledge” or “Known”: actual notice, not constructive knowledge or notice of an Insured by reason of public records or any other documents which impart information affecting the Property;
(d) “Property”: the land described or referred to in SCHEDULE A, and improvements affixed thereto that by law constitute part of the Property. The term “Property” does not include any property beyond the lines of the area described or referred to in SCHEDULE A, nor any right, title, interest, estate or easement in abutting properties, highways (whether adopted or not), rivers or waterways, but nothing herein shall modify or limit the extent to which a right of access to and from the Property is insured by this Policy;
(e) “Insured Mortgage”: any mortgage, charge, pledge or other instrument intended to create security for the Insured Lender over the Property;
(f) “Public records”: records established under legislation at the Policy Date for the purpose of imparting constructive notice of matters relating to the Property;
(g) “Access”: legal right of access to the Property and not the physical condition of the access. The coverage provided as to access does not assure the adequacy or sufficiency of the access for the use intended;
(h) “ Defect”: the invalidity, inaccuracy, or other lack of enforceability of any deed conveying title to the Property or any part thereof that causes title to be vested other than as stated in SCHEDULE A;
(i) “”Unmarketable”: an alleged or apparent matter affecting the title to the Property, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in SCHEDULE A, or a purchaser of the Insured Mortgage, to be released from the obligation to purchase by virtue of a contractual term or condition requiring the transfer of good title;
(j) “Policy Date”: the date set out in SCHEDULE A to this Policy;
(k) “Insured Leasehold”: the leasehold interest, details of which are set out in Schedule A to this Policy.
2. CONTINUATION OF INSURANCE.
a) After Acquisition of Title. The coverage provided by this Policy shall continue in force from the Policy Date in favour of:
| (i) an Insured Lender who acquires all or any part of the estate or interest in the Property in a manner which discharges the Insured Mortgage; |
| (ii) a transferee of the estate or interest so acquired from an Insured which is a corporate entity, provided that the transferee is the parent or wholly owned subsidiary of the insured corporation, and their corporate successors by operation of law and not by purchase, subject to any rights or defences the Company may have against any predecessor Insureds. |
b) After Further Transfer of Title. The coverage provided by this Policy shall continue in force as of the Policy Date in favour of an Insured Owner only so long as an Insured Owner retains an estate or interest in the Property, or for so long as an Insured Owner shall have liability by reason of covenants made or given by an Insured Owner in any transfer or conveyance for valuable consideration of the estate or interest in the Property. This Policy shall not continue in force in favour of any transferee from the Insured Lender of an estate or interest in the Property or in favour of a transferee of any indebtedness secured by a Mortgage given to an Insured Lender provided that nothing shall affect the cover afforded under Condition 2(a)(ii).
c) Amount of Insurance. The amount of insurance after acquisition or after further transfer shall in neither event exceed:
| (i) if the Insured Owner, the Amount of Insurance stated in SCHEDULE A, and as may be further modified by these conditions; and, |
| (ii) if the Insured Lender, the unpaid principal indebtedness secured by the Insured Mortgage (provided always that this Policy shall not cover any monies advanced contrary to or in excess of the Insured Lender’s established internal guidelines), interest up to date of payment hereunder (but excluding any additional penal or default interest), costs and expenses in connection with the enforcement or realisation of the Insured Mortgage, and amounts advanced pursuant to the Insured Mortgage to ensure compliance with applicable law or to protect the Insured Mortgage prior to the time of acquisition of the estate or interest in the Property, the total of which additional sums shall not exceed a sum equal to 125% of the unpaid principal indebtedness. |
3. NOTICE OF CLAIM AND PROOF OF LOSS OR DAMAGE TO BE PROVIDED BY INSURED.
The Insured (or any person claiming the benefit of cover under Condition 2 (a)) shall notify the Company promptly in writing:
(i) in case of any litigation instituted against the Insured affecting the Property which is or may be adverse to the Insured’s title to the estate or interest in the Property or the Insured Mortgage, and that might cause loss or damage for which the Company may be liable by virtue of this Policy in which case the provisions of Condition 4 shall apply;
(ii) in case knowledge shall come to an Insured hereunder of any claim concerning title or interest that is or may be adverse to the Insured’s title to the estate or interest in the Property or the Insured Mortgage, and that might cause loss or damage for which the Company may be liable by virtue of this Policy;
(iii) If prompt notice in writing shall not be given to the Company, then as to such Insured all liability of the Company shall terminate with regard to the matter or matters for which prompt notice is required;
(iv) Where notice under Condition 3(ii) above has been provided to the Company, a proof of loss or damage signed by such Insured Claimant shall be furnished to the Company within 90 days after the date such notice is given, or such longer period as may be agreed in writing by the Company. The proof of loss or damage shall describe the defect in, or lien or encumbrance on the title, or other matter insured against by this Policy which constitutes the basis of the loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. If the Company is prejudiced by the failure of the Insured Claimant to provide the required proof of loss or damage, the Company’s obligation to such Insured under the policy shall terminate, including any liability or obligation to institute or defend any litigation, with regard to the matter or matters requiring such proof of loss or damage;
(v) The Insured Claimant may be required to submit to examination by any authorised representative of the Company and shall produce for examination, inspection and copying, at such reasonable times and places as may be designated by any authorised representative of Company, all records, books, ledgers, cheques, correspondence and memoranda, whether bearing a date before or after the Policy Date, which are within his possession, custody or power which reasonably pertain to the loss or damage. Further, if requested by any authorised representative of the Company, such Insured Claimant shall grant its permission, in writing, for any authorised representative of the Company to examine, inspect and copy all records, books, ledgers, cheques, correspondence and memoranda in the custody or control of a third party, which reasonably pertain to the loss or damage so far as such are within the power of the Insured Claimant to give such permission. All information designated as confidential by such Insured Claimant provided to the Company pursuant to this section shall not be disclosed to any third party unless, in the reasonable judgment of the Company, such disclosure is necessary in the administration of the claim, save where disclosure is required by rules or order of the Court;
(vi) Failure of an Insured Claimant to submit for examination, produce other reasonably requested information or grant permission to secure reasonably necessary information from parties as required in this paragraph shall terminate any liability of the Company under this policy as to that claim;
(vii) When an Insured notifies the Company under Condition 3(ii) and provides a Proof of Loss, the Company shall investigate the notification to determine whether the lien, encumbrance, or adverse claim is valid and not barred by law or statute. If the Company concludes that the lien, encumbrance, or adverse claim is not covered by this Policy, or was otherwise addressed in the completion of the transaction in connection with which this Policy was issued or is not valid and enforceable, the Company may advise such Insured of the reasons for its determination and shall have no obligation to undertake other action. The Company shall have no obligation to rectify potential claims upon the title or interest or other matters, where a third party is not asserting a superior interest or title. If the Company concludes that the lien, encumbrance, or adverse claim is or may be valid and enforceable, the Company may at its sole discretion take one of the following actions:
| (a) institute and pursue proceedings to clear the lien, encumbrance, or adverse claim from the title to the Property; |
| (b) indemnify such Insured as provided in this Policy within 30 days of the date of agreement or final judicial or other determination of the quantum of any loss hereunder; |
| (c) upon payment of appropriate premium and charges, issue to a subsequent owner, mortgagee or holder of the estate or interest in the property insured by this Policy, a Conveyancing Indemnity Policy either without exception or with affirmative insurance regarding the lien, encumbrance, or adverse claim, said Policy to be in an amount equal to the then current value of the Property or, if a Policy issued to an Insured Lender, the amount of the loan (subject to the limitations set out in Condition 2 above) but in no event greater than 125% of the initial advance by the Insured Lender; |
| (d) secure a release or other document discharging the lien, encumbrance, or adverse claim; |
| (e) do any other act that in the Company’s opinion may be necessary or desirable to establish the title to the estate or interest of the Insured or to reduce or prevent loss or damage to the Insured; |
(viii) in the event that the Amount of Insurance stated in SCHEDULE A in respect of the Insured Owner is less than the value of the insured estate or interest at the Policy Date or the full consideration paid for the Property, whichever is less, then in such event, as to any potential loss, the Company shall only pay the loss pro rata in the proportion that the Amount of Insurance at the Policy Date (exclusive of any improvements made subsequent to the Policy Date) bears to the total value of the insured estate or interest at the Policy Date.
4. DEFENCE AND PURSUIT OF ACTIONS: DUTY OF INSURED TO CO-OPERATE.
(a) The Company may provide for the defence of an Insured in litigation initiated by a third party which is notified to the Company promptly in accordance with Condition 3(i) in which any third party asserts a claim adverse to the title or interest of the Insured, where those pleaded causes of action include allegations of a lien or encumbrance or other matter insured against by this Policy. The Company shall have the right to select solicitors, counsel and experts of its own choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those pleaded causes of action and shall not be liable for and will not pay the fees of any other solicitors, counsel or experts. The Company will not pay any portion of the fees, costs or expenses incurred by the Insured in the defence of those causes of action that allege matters not insured against by this Policy whether such allegations are included in the same or separate litigation or otherwise.
(b) Whenever the Company shall have instituted an action or conducted the defence of an action as permitted by the provisions of this Policy, whether in the name of the Insured or not, the Company may pursue any litigation to final determination by a court of competent jurisdiction and expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or order, provided always that no action shall be defended unless Queen’s Counsel selected by agreement between the parties shall advise that there are reasonable prospects of success in defending such action.
(c) In all cases where this Policy permits or requires the Company to institute or to defend any actions or proceeding, the Insured shall provide to the Company the right to so institute or defend the action or proceeding and all appeals therein, and permit the Company to use, at the Company’s option, the name of such Insured for this purpose and shall execute any power of attorney or other documents requested by Company for such action or proceedings.
(d) Whenever requested by the Company, the Insured, at the Company’s expense, shall give the Company all reasonable assistance:
| (i) in any action or proceeding, securing evidence, obtaining witnesses, instituting or defending the action or proceeding, providing documents or effecting settlement; and |
| (ii) in any other lawful act that in the opinion of the Company may be necessary or desirable to establish the title to the estate or interest of the Insured Owner or Insured Lender in respect of the Property. If such Insured fails to furnish the required co-operation, the Company’s obligations and rights concerning the Insured under the Policy shall terminate including the continuation of defence or institution of any litigation undertaken at Company’s election, with regard to the matter or matters requiring such co-operation. |
5. EXTENT OF LIABILITY.
This Policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the Insured by reason of matters insured against by this Policy and only to the extent herein described.
(a) The liability of the Company under this Policy shall not exceed the lesser of:
| (i) the Amount of Insurance stated in SCHEDULE A, or, if applicable, the Amount of Insurance as defined in Condition 2(c); or |
| (ii) the amount of the unpaid indebtedness secured by the Insured Mortgage as limited under Conditions 2(c) and 7, or as reduced under Condition 8, at the time the loss or damage insured against by this Policy occurs; or, |
| (iii) the difference between the value of the insured estate or interest as insured and the value of the insured estate or interest subject to the lien or encumbrance or other matters insured against by this Policy at the date such Insured ascertains the facts giving rise to the loss or damage. |
(b) In the event such Insured has acquired the estate or interest in the manner described in Condition 2(a) or has conveyed the title, then the liability of the Company shall be as set forth in Condition 7(a).
6. APPORTIONMENT.
If the property described in SCHEDULE A consists of two or more parcels which are not used as a single site, and a loss is established affecting one or more of the parcels but not all, the loss shall be computed and settled on a pro rata basis as if the Amount of Insurance under this Policy was divided pro rata as to the value on the Policy Date of each separate parcel to the whole, exclusive of any improvements made subsequent to the Policy Date, unless a liability or value has otherwise been agreed upon as to each parcel by the Company and the Insured at the time of the issuance of this Policy and shown by an express statement on or by endorsement to this Policy.
7. LIMITATION OF LIABILITY.
(a) If the Company establishes the title, or removes the alleged lien or encumbrance, or otherwise establishes the Insured Mortgage, as insured, or rectifies the adverse claim to the title, or takes action in accordance with Conditions 3 or 4, by any method, including litigation and the completion of any appeals therefrom it elects to undertake, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused thereby;
(b) In the event of any litigation, including litigation by the Company or with the Company’s consent, the Company shall have no liability for any loss or damage until and unless there has been a final determination by a court of competent jurisdiction, and disposition of all appeals therefrom, adverse to the title or to the Insured Mortgage, or the time limit for the issue or service of any such appeal has expired;
(c) The Company shall not be liable for loss or damage to any Insured for liability voluntarily assumed by such Insured in settling any claim or suit without the prior written consent of the Company; and
(d) The Company shall not be liable for:
| (i) any indebtedness created subsequent to the Policy Date except for advances made to protect the Insured Mortgage and which are secured thereby; or, |
| (ii) loan advances made subsequent to the Policy Date, except loan advances made subsequent to the Policy Date for the purpose of financing in whole or in part the construction or development of an improvement to the Property, which at the Policy Date were secured by the Insured Mortgage and which the Insured was and continued to be obliged to advance at and after the Policy Date. |
8. REDUCTION OF INSURANCE: REDUCTION OR TERMINATION OF LIABILITY.
(a) All payments under this Policy, other than those applicable to legal costs or expenses, shall reduce the Amount of Insurance pro rata;
(b) Payment in part by any person of any portion of the principal indebtedness, or any other obligation secured by the Insured Mortgage, or any voluntary partial satisfaction or release of the Insured Mortgage, to the extent of the payment, satisfaction or release, shall reduce the Amount of Insurance pro rata to such payment so far as the Insured Lender is concerned. The Amount of Insurance may thereafter be increased by accrued interest and advances made to protect the Insured Mortgage secured thereby (subject to the provisions of Condition 2 above), with interest thereon, provided in no event shall the amount of insurance be greater than the Amount of Insurance stated in SCHEDULE A; and,
(c) Payment in full by any person or the voluntary satisfaction, discharge or release of the Insured Mortgage shall terminate all liability of the Company to the Insured Lender.
9. LIABILITY NON-CUMULATIVE.
If the Insured acquires title to the estate or interest in satisfaction of the indebtedness secured by the Insured Mortgage, or any part thereof, the Amount of Insurance under this Policy shall be reduced by any amount the Company may pay under any separate policy insuring a mortgage to which exception is taken in SCHEDULE B or to which such Insured has agreed, assumed, or taken subject, or which is hereafter executed by an Insured and which is a charge or lien on the estate or interest described or referred to in SCHEDULE A, and the amount so paid shall be deemed a payment under this Policy.
10. THE INSURED’S RESPONSIBILITIES.
(a) The owner of the indebtedness secured by the Insured Mortgage, provided the priority of the Insured Mortgage or its enforceability is not affected, may release or substitute the personal liability of any debtor or guarantor, or extend or otherwise modify the terms of payment, or release a portion of the estate or interest from the lien of the Insured Mortgage, or release any collateral security for the indebtedness; and,
(b) When the permitted acts of an Insured occur and such Insured has knowledge of any claim of title or interest adverse to the title to the estate or interest or the priority or enforceability of the Insured Mortgage, the Company shall only be required to pay that part of any losses insured against by this Policy that shall exceed the amount, if any, lost to the Company by reason of the impairment by such Insured of the Company’s right of subrogation.
11. SUBROGATION UPON PAYMENT OR SETTLEMENT.
a) The Company’s Right of Subrogation.
Whenever the Company shall have settled and paid a claim under this Policy, all rights of subrogation shall vest in the Company unaffected by any act of such Insured. The Company shall be subrogated to and be entitled to all rights and remedies that such Insured would have had against any person or property in respect of the claim had this Policy not been issued. If requested by the Company, such Insured shall transfer to the Company all rights and remedies against any person or property necessary in order to perfect that right of subrogation. Such Insured shall permit the Company to sue, compromise or settle in the name of such Insured and to use the name of such Insured in any transaction or litigation involving these rights or remedies. If a payment on account of a claim does not fully cover the loss of such Insured, the Company shall be subrogated to all rights and remedies of such Insured after such Insured shall have recovered its principal, interest, and legal costs.
b) The Company’s Right Against Non-insured Persons.
The Company’s right of subrogation against non-insured persons shall exist and shall include, without limitation, the rights of such Insured to indemnities, guarantees, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that provide for or affect the right of subrogation. The Company’s right of subrogation shall not be avoided by acquisition of the Insured Mortgage by a party who acquires the Insured Mortgage as a result of an indemnity, guarantee, other policy of insurance, or bond and such person will not be an insured under this Policy, notwithstanding Section l(a)(i) of these Conditions.
12. ARBITRATION.
If liability under the Policy is otherwise admitted, any dispute or difference relating to the amounts of any payment by the Company shall be referred to arbitration under the provisions of the Arbitration Acts 1950-1979 or any statutory modification or re-enactment thereof to any person nominated by agreement between the parties, or in default appointed by the president for the time being of The Royal Institution of Chartered Surveyors.
13. SEVERABILITY.
In the event any provision of this Policy is held invalid or unenforceable under the applicable law, the Policy shall be deemed not to include that provision and all other provisions shall remain in full force and effect.
14. DISCLOSURE BY INSURED.
This entire Policy shall be void if, whether before or after a loss, an Insured has concealed or misrepresented any material fact or circumstance concerning this insurance or the subject thereof, or the interest of an Insured therein, or in case of any fraud by an Insured related thereto. Provided, however, that the Company will not deny its liability, if any, to an Insured on the ground of concealment or misrepresentation of a material fact or facts of an Insured Lender or Insured Owner being imputed to an Insured Lender or Insured Owner who does not possess such knowledge of concealed or misrepresented matter of fact or facts.
15. VALUE INDEX PROTECTION.
Notwithstanding anything contained in the Policy to the contrary, the amount of insurance provided by the Policy shall be subject to cumulative annual increase adjustments, solely on behalf of the named Insured Owner, as stated in SCHEDULE A of the Policy, in the manner so provided herein below:
(a) an upward adjustment, not to exceed the most current annual increase, if any, of the Retail Price Index, will be made on each of the first five consecutive and successive anniversary dates of the Policy provided however, that each such increase will be no greater than ten per cent (10%) per annum of the Amount of Insurance;
(b) that the maximum amount of insurance shall never exceed one hundred fifty per cent (150%) of the Amount of Insurance stated in SCHEDULE A of the Policy relative to such Insured Owner; and,
(c) there shall be no annual adjustment in the Amount of Insurance for years in which there is no increase or a decrease in said Retail Price Index.
16. NOTICES.
Any notices or other statements in writing required to be given to the Company shall include the number of this Policy and shall be addressed to the Company at Stewart Title (GB) Limited, 200-201 High Street, Exeter, Devon, EX4 3EB. Any notices required to be given to the Insured shall be given at the address stated in Schedule A, or such other address as may be notified from time to time in writing by the Insured to the Company.
17. GOVERNING LAW.
This Policy shall be governed by and construed in all respects in accordance with English Law and the parties hereto agree to submit any dispute or difference (save for those covered under Condition 14 hereof) to the jurisdiction of the English Courts.
18. GENERAL.
(a) This Policy together with all endorsements, if any, attached hereto by the Company is the entire contract between the Insured and the Company. In interpreting any provision of this Policy, this Policy shall be construed as a whole; and,
(b) No amendment of or endorsement to this Policy can be made except by writing endorsed hereon or attached hereto signed by either the Secretary, an Assistant Secretary, or other authorised signatory of the Company.
SCHEDULE A
Policy Number:
File Reference:
Policy Date:
Amount of Insurance:
| Insured Lender £ |
| Insured Owner £ |
1. Name of Insured Owner:
2. Name of Insured Lender:
3. The estate or interest in the Property referred to herein is at the Policy date a ___________ estate and is vested in:
4. The Property referred to in this policy is described as:
5. If this schedule A is attached to a Lender’s policy, the Insured Mortgage, which encumbers the Property referred to herein, and the assignments of such mortgage, if any, are described as:
6. Issuing Agent:
SCHEDULE B
Policy Number:
File Reference:
EXCEPTIONS FROM COVERAGE
This Policy does not insure against loss or damage (and the Company will not pay costs, legal fees or expenses) that arise by reason of the terms and conditions of the leases and easements, if any, shown in SCHEDULE A, and the following matters:
1. Matters that would be disclosed by an inspection of the Property.
2. Any discrepancies, conflicts, or shortages in area and boundary lines, or any encroachments or protrusions, or any overlapping of improvements.
3. (Insert here all other specific exceptions as to liens, easements, etc.)
No guidelines are available for this form at this time.