Legal Sector

FAF International's real estate ownership or mortgage security insurance protects owners against unforeseen challenges to an insured owner's right to occupy and use land, or to enforce a mortgage in an event of default.

The insurance moves risk away from the lawyer, complementing good quality legal services and allows investors, lenders and their lawyers to structure real estate and mortgage transactions in a more secure and efficient way.

FAF International can either provide a general insurance "wrap" to streamline the due diligence process or simply insurance for a specific problem that the lawyer identifies during traditional due diligence.

Portfolio Insurance

FAF International's portfolio insurance insures real estate portfolios against ownership risks and mortgage defects. The insurance is used to supplement legal due diligence and de-risk the process so that the purchase or refinancing of portfolios can be completed more efficiently, at lower cost and with the safety net of an insurance policy standing behind due diligence.

The property owners and lenders can benefit from insurance against the entire portfolio of assets even when only a sample are examined. This means that:

  • Lawyers do not need to complete full due diligence on all of the assets - saving time and money.
  • Insurance is a quick and safe alternative to conventional due diligence, allowing the transaction lawyers to focus on other more complex aspects of the deal.
  • All parties have recourse to a substantial rated insurance company if there are any problems, with a firm insurance policy.

Portfolio insurance can be provided within a matter of days even for very large portfolios. By reducing the time and cost of basic due diligence, investors and lenders can improve their chances of success when competing for business without the need to "take a view" on risks without any protection.

Rights Of Light Insurance

FAF International's rights of light insurance protects British developers against loss caused because a development infringes someone else's legal right to light for their land.

The insurance enables the developer to balance the requirements of good conduct with a viable rights of light strategy, accommodating the interests of genuinely affected third parties without incurring costs from others whose motivation is purely financial. The insurance supplements the expert surveyor's input by enabling an appropriate rights of light strategy and transferring the residual financial risk to the insurer's balance sheet.

The policy pays all legal costs involved in addressing claims and the cost of settlements, damages, abortive costs in the event the developer's desired project is permanently halted by the Court. 

Developers Policy

Developers form one of FAF International's largest customer groupings. Whether raw land is being developed or an existing site regenerated, many legal ownership problems can develop as the land changes its nature.

Common problems which we insure for developers include:

  • The planned violation of legal restrictions which the development will breach
  • Where several parcels are being combined to assemble a bigger site, poorly drafted plans can leave "ransom" or "spite" strips behind which the previous owner can claim ownership of
  • New developments will usually be more intense than the previous one. This might mean that existing right are inadequate and subject to challenge by neighbours
  • Judicial review of the planning decision.