Land Sale, Right of Way - Indemnity Policy

[Lewis4242]

Hi there,

A family member is looking to purchase a parcel of land in the UK with the aim of building a home on it (planning permission has already been granted). The issue is, along the very top of the property (in a strip which spans the entire plot), there is a right of way. The legal owner of the right of way cannot be located and it is believed to originally be for a hotel that was demolished many years ago - with the previous owners now deceased.

Attempts have been made to remove the right of way but it is looking likely this will never happen - and there are 20 years left on it. The seller, on advice of their solicitor, has now suggested an indemnity policy (paid for by them) which will cover the cost of the property should someone come out of the woodwork over the next 20 years and lay claim to the easement.

I am just curious as to the risks that are associated with using an indemnity policy as a solution. What are the main issues that could pop up that would result in such a policy not paying out? The planning permission that has been granted is for a home that is partially located on this right of way. I have suggested returning to the planning phase and designing a new home that would not have any of the main structure on the easement - but this will add another 1-2 years to the clock and may not be approved.

Any help and advice is truly appreciated.

Lewis

[des8]

Indemnity insurers , like insurers of other risks, may decline to meet claims for a myriad of reasons:

The underlying reason will always be because the insured did not comply with the contract by e.g non disclosure of all relevant information when effecting the policy; breaching policy conditions; exaggerating claim amount etc etc

[atticus]

To simplify the above, the policy wording is key. Your relative should ask his/her solicitor to advise on these questions, by reference to the policy.