Ask the experts

Ask the experts

We look at some of the most common questions posed to our underwriters.

Q: Can you provide Insolvency Act cover where a property transfer has been made by a company?

A: Yes. Where a property has been transferred at undervalue or gifted by a company, there is a potential risk that, if the company goes into liquidation or is subject to an administration order within two years, a Court may agree to revert the property back to the company’s ownership under sections 238-241 of the Insolvency Act 1986 to form part of the assets for the purpose of repaying outstanding debts.

When looking at an enquiry for cover, our main consideration will be the reason for the transfer and the circumstances behind the transaction. The most common transfers we see are to:

  • a director, often in lieu of repayment for a loan to the company
  • a long-standing tenant, who is receiving a discount off the asking price
  • a subsidiary company as part of a financial restructuring process.

Where a company is currently gifting or selling the property at undervalue, we can cover the transferee’s lender (and any successors in title) against the loss of their security against the mortgage if the property is successfully reclaimed. Where the property is being subsequently sold on after the company transfer has taken place, we can offer cover for the third party buyer against a loss of their property.

Premiums start at £128 for transfers by a registered UK company. You can get a quote by contacting one of our underwriting team on 01603 617617 or enquiries@cli.co.uk.