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Letter of Indemnity before purchase

  • 05-03-2013 3:32pm
    #1
    ceilishark
    Registered Users, Registered Users 2 Posts: 20 ✭


    Hi All,

    I'm hoping somebody has experienced this before.

    I'm currently in the process of purchasing a Buy to Let property. Before I can draw down the mortgage, I need to have a Letter if Indemnity so the building is covered. This is where the fun starts.

    I contacted my current house insurer - Allianz - and was informed that I could not get a Letter of Indemnity before I had the property insured with them, and that I couldn't insure the property until I had tenants in place, which I can't do as I don't own the property yet as I need a letter of indemnity ...

    I then contacted the Bank that are underwriting the mortgage, and asked if they could insure the house. Amazingly, they said they also could not insure the house as it was currently vacant, but are insisting on a Letter of Indemnity before releasing the funds.

    Has anyone ever encountered this before?

    Regards,

    Jonathan.
    Tagged:


Comments

  • #2
    Liam D Ferguson
    Registered Users, Registered Users 2 Posts: 542 ✭✭✭Liam D Ferguson


    An insurance broker should be able to issue a Letter of Indemnity with a date in the future on it.


  • #3
    peteb2
    Registered Users, Registered Users 2 Posts: 1,813 ✭✭✭peteb2


    The problem being the grey area of a buy to let. Most insurers consider a property to be unoccupied if the property is continually vacant for a periof of 31 days or more. Or if it exceeds a certain number of days unoccupied during the year. Most insurers wouldnt ask whether it was empty from the start. But a person may choose to inform them of this if they wish to be 100% upfront. However if you were to read the policy wording it may not state this needs to be disclosed depending on the insurer.

    So technically there are ways and means.


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