Slave to Covenant and indemnity insurance?

Submitted by seanpic on Fri, 05/10/2013 - 16:07

Hi all

I have a question about this big headache called COVENANT. Well my aunt bought this house recently and after she bought it she found out there are a lot of covenants on the property and she stuck with it as she can not do any improvement the way she needs and like it, on the other hand the insurance company told her you can get an indemnity insurance against it and do improvement you like(ofcourse according to the planing permission), but when my aunt said she can try and find out who are the benefactors of the covenant and settle the matter with them one way or another she got an unexpected reply from insurance company and that was if she try to do it then it'll automatically cancel her indemnity insurance.

Now the question is why the insurance company afraid of this?, is it too difficult to find the covenant benefactors and settle with them? specially when she found out that the covenant was first belonged to a big company which bankrupt and the company bought by another company which after a while was bankrupt as well and so on by the fourth company. This is her life saving after 40 years and as she said she likes to retire and spend the rest of her life without headache or worrying.


I'll appreciate any insight and solution to this.
Kind regards .

Thanks,
Sean.
[Removed as per TOS]

Posted: 13 May 2013 06:20 Post Subject:

Yes, its good to have an indemnity insurance since the property has got several Restrictive Covenant on it. As a result, your aunt is liable to honour that. If she fails to do so, then her irresponsible activities may result in a financial loss for which she may be sued to cover it.

Moreover, in the event she loses the case, then she'll have to compensate the financial loss as well as legal costs incurred by the plaintiff to fight the case.

However, by the virtue of an indemnity insurance, she'll be protected from all such probabilities. Therefore, a small premium will cover your aunt from any sort of legal action originating due to violation of planning permissions or problems with the home's title.

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