Defects covered — planning breaches, restrictive covenants and title chain
Title insurance covers financial loss from title defects not discoverable or not discovered in conveyancing: (1) missing documentation — unavailable historical conveyance; missing probate transfer; gap in title chain; (2) planning/building regulation breaches — loft conversion without consent; extension without planning permission; building regulations approval not obtained; planning enforcement limitation periods: building operations 4 years; change of use to dwelling 4 years; other changes of use/condition breaches 10 years; building regulations: no general limitation period on enforcement (prosecution within 2 years of completion); (3) restrictive covenants — covenant against HMO; covenant against non-residential use; covenant requiring consent for alterations; financial protection against enforcement by beneficiary; covenant not extinguished; (4) rights of way/light disputes; (5) chancel repair liability (pre-2013 properties); (6) adverse possession claims.
- Planning limitation periods (TCPA 1990): building operations — 4 years from substantial completion; change of use to dwelling house — 4 years; all other changes of use and condition breaches — 10 years
- Building regulations: no general limitation period on local authority enforcement; title insurance for building regulations breaches provides ongoing protection beyond the planning 4-year window
- Restrictive covenants: title insurance covers cost of legal challenge by covenant beneficiary — does not extinguish covenant; common BTL covenants: HMO restriction; single residential use; no trade or business
- Defective title/missing documentation: covers financial loss if claim based on missing document or defective earlier transaction — applies to both registered and unregistered land
Lender requirements, policy cost, retrospective cover and key exclusions
Lender requirement: UK Finance Lenders' Handbook requires conveyancing solicitor to report known title defects; where defect cannot be resolved before completion, lender accepts title insurance from approved providers. Providers (arranged via conveyancing solicitor): First Title Insurance plc; Aviva; CLS Claimant Legal Services; Countrywide Legal Indemnities; Titlesolv. Cost: one-off premium £150-£300 standard residential; £300-£600 higher-value/complex defects; above £600 for significant exposure. Policy passes automatically to subsequent purchasers (attached to land not owner). Retrospective (post-completion) policies: available where defect discovered after purchase — higher premium than pre-completion policy; NOT available once formal enforcement notice; legal claim; or court proceedings commenced. Key exclusions: known defect before policy inception; insured's own post-policy actions exacerbating breach; active proceedings at inception; compulsory purchase/planning blight.
- Retrospective policies: available for planning/building reg breaches discovered during renovation; restrictive covenants raised post-purchase; rights of way disputes crystallising after completion — not once proceedings commenced
- Policy transfers: policy typically passes automatically to subsequent purchasers; new buyer/lender reviews policy terms at next sale; accepted by most mainstream lenders for minor historical defects
- Title insurance does NOT resolve underlying defect: landlord still has unlawful extension/covenant breach — but is financially protected against enforcement cost (demolition; restoration; legal costs)
- Scotland: most title defects covered by Land Register of Scotland guarantee and Keeper's indemnity (LR(S)A 2012 ss.77-80); English-style title insurance less commonly required in Scotland