Ulster Bank loan condition for HomeBond for second-hand dwellings
It has been brought to the attention of the Conveyancing Committee that Ulster Bank has introduced a requirement by way of a loan condition that second-hand dwellings built in the ten-year period preceding the loan must be covered by HomeBond or an equivalent cover.
Following enquiries made by the committee, it has been confirmed that it was not a universal requirement across the lending industry over the past ten years to have HomeBond or equivalent cover in relation to new housing, particularly self-builds. It was also acknowledged that many companies in the market previously offering this type of structural protection cover were not writing new business at various stages during the past ten years. The committee concluded that, as it was not the standard industry practice in the past ten years for new dwellings to have HomeBond or equivalent cover, it is an onerous and unrealistic requirement to expect that all second-hand dwellings built in the last ten years would have such cover for the remainder of the ten-year term.
The committee had also observed that Ulster Bank is treating the above loan condition as a matter of title for the solicitor to deal with, which the committee considers is incorrect on the basis that it is not a title issue and, therefore, not a matter for a solicitor鈥檚 undertaking or a certificate of title.
The committee asked the bank to dispense with this requirement and, in the absence of a reply from the bank, the committee wishes to bring to the attention of the profession that this requirement is not a matter of title and is, therefore, not a matter for solicitors to deal with.