You have just completed the purchase of a house. Your have employed a good Conveyancing Solicitor, who has done an excellent job with the conveyancing, the removal van turned up on time, and nothing got broken in the move. So everything looks good.
But when something then goes wrong – it might be that the seller has told you something that turns out to be untrue, or you find that there is an ongoing boundary dispute with the neighbours that the seller conveniently forgot to mention – what can you do about it? Perhaps your Conveyancing Solicitors phones to say that it has been discovered that the ‘seller’ was a fraudster who had impersonated the real owner, and the Land Registry has refused to register the transfer. However careful your Conveyancing Solicitor might have been, things can still go wrong, some risks just can’t be foreseen.
When problems of this sort arise, it can be expensive to put things right. It is all very well for a Solicitor to advise that you would have a good case against someone, but most people do not have the money to fund potentially expensive legal disputes. In some cases, it will be practically impossible to bring an action because the seller has disappeared. Even winning a case does not guarantee that you will collect damages from the seller, and could leave you out-of-pocket with legal expenses.
With these problems in mind, First Title Insurance PLC has recently announced the introduction of a Home Owners Protection Policy. This is designed to provide cover against a wide variety of possible risks that house buyers might come up against after they have bought a house. These include boundary issues, fraud or forgery by the seller (such as where the ‘seller’ impersonates the real owner), problems with registration of title due to issues not found during the purchase process, and action taken by the council because parts of the insured property don't comply with planning or building regulations. Cover includes payment of legal expenses to defend or enforce legal rights, and relocation expenses.
These indemnity policies are available through your Conveyancing Solicitor. A one-off premium is payable, so there is no annual renewal premium to worry about. The amount of the premium is based on the value of the property, and they are quite modest given the level of cover.
The majority of house purchases are completed without difficulty, and most sellers are honest and will give truthful information in their replies to the property information forms. But there are always the few who are the exception, and if you do encounter a problem and have taken out this insurance cover, you will be reassured that things can be sorted out without involving you in additional expense.
If you are buying with the assistance of a mortgage, you should bear in mind that mortgage lenders still require the mortgage to be repaid whatever your difficulties. These policies also cover lender’s interests, so you will not be faced with the additional problems with your lender.
If you want to know more, you should ask your Conveyancing Solicitor, who will be able to provide you with full information of the cover and a quote for your property.