A title indemnity policy for owners and their successors in title, tenants and lenders is the accepted option for dealing with such title defects in place of finding a legal solution.
n Breach of Restrictive Covenants – the existing use of the property may be in breach or a proposed use of the property may create a new breach enabling a party with the benefit of the covenant to challenge the usage. Titles contain specific covenants but often there can be reference to covenants details of which are not given in the title. A policy can safeguard against certain losses and costs from such adverse claims.
n Rights of Light – cover for an adjoining or neighbouring third party’s right to challenge an infringement to their easement of light is increasingly in demand by developers and their funders. Specialist surveyors are now retained by developers to asses the impact of a potential development on adjoining owners and to assess what compensation or legal remedy might be available to those injured parties. Compensation figures can be high; however, an injunction can stop the proposed development altogether leading to potentially huge losses for any developer which might lead to abandoning a scheme or at the very least cutting it back. Insurance is often recommended as a means of diverting the risk away from the developer and/or negating the need to contact an adjoining owner with an offer of settlement for any losses of light before any development can proceed. The policy provides certainty to a developer that it can proceed with cover for its potential losses in place.
n Judicial Review of Planning Consents – legislation provides for a challenge to a planning consent where that consent may have been granted in circumstances in which there are certain irregularities. That challenge can be made at any time within three months of the grant of consent. Once planning consent for a development has been granted, developers are typically keen to start work on a site as soon as possible; however, the possibility of a judicial review challenge could mean at the very least, delays and wasted costs or at worst the overturning of the original consent. The cover offered in the market is very specific and is designed to cover certain costs including
the costs of an alternative planning application should the original planning consent be quashed.
Stewart Title Limited delivers a host of legal indemnity products, streamlining the conveyancing process and helping solicitors and lenders creatively overcome difficult title situations. To do this, Stewart Title employs underwriters and local associates who have the experience, knowledge and the ingenuity required of their respective markets to handle any transaction, big or small, with the efficiency and dedication that it deserves.
The company’s operations are headquartered in London with offices throughout the UK, Europe and Australia.
This article is for general information purposes only. For full cover details, please contact us. n
Company Profile
Stewart Title Limited is a Title Insurance company regulated by the Financial Services Authority. As a wholly owned subsidiary of Stewart Title Guaranty Company, Stewart Title Limited is the underwriter for Stewart’s transactions in the United Kingdom, Europe and Australia.
Risk and Insurance in Private Equity and M&A 2012/13
Author Viewpoint 49
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