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What happens when your landlord is in arrears with mortgage?
hsmum_2
Posts: 6 Forumite
A friend of mine has been living in a rented house now for well over a year. During this time they have had visits and letters from bailiffs saying they will be repossessing the house as the landlord is in arrears with the mortgage.
What rights do the tenants have and what should the letting agency do (if anything) for the tenants?
What rights do the tenants have and what should the letting agency do (if anything) for the tenants?
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Does the landlord have consent to lease or a BTL mortgage and are the tenants in the fixed term if a tenancy? If the answers are yes and no the lender will serve two months notice to quit and the tenants will need to look for a new home. The tenants are not contracted to the letting agency, so the agency have no obligations in this matter.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
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If any letters arrive addressed to "The occupier" usually with something like "This is not a circular" on them, tenants must open immediately. The lender will usually write to the property several times to ascertain who lives there and this gives the tenants a chance to make their residency known to the lender.
Lenders will be sympathetic to a point, in allowing tenants time to find somewhere lese, but ultimately the property will be re-possessed and/or sold.0 -
I've just read another post re consent to lease and feel that the ll may not have consent (especially as all their post is delivered there!) as they used to live in the property it's certainly not btl!
As far as I'm aware my friends are in middle of fixed term tenancy.0 -
@werdnal they have been opening the mail which then led to panic! Mortgage company have been round and asked various questions and ll has said they could buy house if they wanted.... But they're looking for original price paid -which is about 30 grand more than house is worth now!0
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Read the consent to lease sticky. Is their deposit lodged in one of the three schemes? If not get the landlord to do that or return the deposit in full ASAP.Declutterbug-in-progress.⭐️⭐️⭐️ ⭐️⭐️0
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Sounds like he doesn't have consent to let, best thing for them to do is look for some where else to rent asap!0
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1) if the landlord has a Buy To Let (BTL) mortgage, or Consent To Let (CTL), then after repossession, the mortgage lender becomes the new landlord and the tenancy continues
2) if the tenancy is in the Fixed Term (eg 12 months) then the mortgage lender must honour that 12 month fixed term
3) if the tenancy is NOT in a Fixed Term, but has become Periodic (monthly, or 'rolling') then the lender can give notice (usually 2 months) in exactly the same way that the original landlord could have done.
4) However, if there is no BTL or CTL, then the mortgage lender does NOT have to honour the tenancy, and can ask the court for immediate possession (ie, eviction).
5) since 2010, though, the Mortgage Repossessions (Protection of Tenants etc) Act 2010 allows a tenant in this position to ask the court to give them up to 2 months grace, to give them time to find a new home.
So it is important to open mail to "the occupier". The mortgage lender has to send this letter when starting court action. You should read the letter, and immediately contact the lender so they know you live there. Also check the court date, and go along to make this request.
Additionally it is worth contacting the landlord directly (though be sceptical about any explanations/guarantees given). If you do not have his direct address, try the Land Registry (£4 for the Title document).
Also worth writing to any solicitors involved.0 -
This situation happened to me last year and I asked to attend the hearing. I had to pay a fee of £80 in order to be made a party to the case however it was money well spent. The Judge was extremely sympathetic to my plight, as was the lender's representative who also attended. The difference in my situation was that the Judge was giving me lots of time to move out when in fact I wanted to leave as soon as possible. I was granted the time that I needed and I was also advised by the Judge not to pay the final months rent. LL didn't appear in Court so the decision was made to reposess however it was subsequently decided to let him keep the house as long as he cleared his arrears. Unfortunately he failed to keep up his end of the bargain and the house was repossessed 5 months later.0
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Sorry to hear you were in same situation! Trust all is well now. Have members of the family who rent out property who have had problem tenants, never thought about it happening the other way round!0
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