Renting - Letter from LPA Receivers

Premier_2

clutton wrote: »

irespective of some of the advice given here - the mortgage legal contract between owner and lender takes precedence over the AST contract between owner and tenant - if i were you i would look for somewhere to live very quickly - the Lender will not want to force you to keep to the remaining term of the AST - as they can get a better price and a faster sale for the house without an incumbent tenant. Under repossession circumstances, lenders have a duty get the highest possible price for the property to leave the lowest debt possible for the seller.

Leave as soon as you can - the odds are you will have to leave anyway and a court will probably give you no more than 28 days notice to leave when the Lender goes to court.

As I mentioned, if the lender wanted their money back, they don't need to wait for the fixed term to end, they can apply to the court for immediate re-possession, evicting the tenants without notice (but with prior court approval)

Housing Act 1988 Shedule 2, Ground 2

Ground 2

The dwelling-house is subject to a mortgage granted before the beginning of the tenancy and—
(a) the mortgagee is entitled to exercise a power of sale conferred on him by the mortgage or by section 101 of the [1925 c. 20.] Law of Property Act 1925; and

(b) the mortgagee requires possession of the dwelling-house for the purpose of disposing of it with vacant possession in exercise of that power; and

(c) either notice was given as mentioned in Ground 1 above or the court is satisfied that it is just and equitable to dispense with the requirement of notice;


and for the purposes of this ground “mortgage” includes a charge and “mortgagee” shall be construed accordingly.

In this case, the lender has decided it is in their and the owners best interests to keep the property and the rental income it currently attracts rather than sell the property with vacant possession.

silvercar

The point of BTL / consent to lease mortgages is that the lender acknowledges the tenancy. ie the lender understands that the property is let and occupied by tenants and they acknowledge the terms of the tenancy agreement ie they can't turf out tenants without complying with the law regarding the AST. I'm not disagreeing with Premier's quote from the Housing Act, just stating that there are other regulations that have to be followed. The terms and conditions of the mortgage will say how the tenancy agreement should be made (usually by an AST) and the lender, within those T&Cs, acknowledges its terms.

Otherwise there would be no point in having BTL mortgages and people may as well let on residential mortgages; there would be no need for (good) letting agents to insist that landlords do have their lenders permission to let; and no protection for tenants in any case where a landlord has a mortgage.

So in this case, it may be that the lender acknowledges the tenancy directly for terms in the mortgage, rather than a purely financial reason for keeping the tenants.

iamstacie

Silvercar, from my (limited) understanding, by asking for my rent to go to a 3rd party (LA) rather than to them directly, they have not truly acknowledged my tenancy, but rather, seem to be keeping their options open and have asked me to fill in a form relating to how much rent I pay, how long my tenancy period is for etc. I may well be wrong on this point, but until I get through to the solicitor dealing with it I won't know (out of the office at the minute). This is all I could get from the Shelter website. I'm going to try to call them now.

My deposit is protected in the TDS scheme and I've had all the bumpf through so I'm ok on that score.

Apologies for the disjointed-ness, but I work nights and need my bed...

Premier_2

silvercar wrote: »

...Otherwise there would be no point in having BTL mortgages and people may as well let on residential mortgages; ...

Under a normal residential mortgage, borrowers are not allowed to let their property - it is designed primarily for owner occupiers.

One big difference with many BTL mortgages, apart from the right to let the property, is the way the loan is calculated. On a residential mortgage it is usually provided on the basis if a multiple of the owners annual salary; with a BTL, the loan can be based purely on the expected rental income (although some take the borrowers annual salary into account to). BTL mortgage products usually require a much bigger deposit and have a higher interest rate to take account of the greater risk the lender is exposed to.

iamstacie

Hi all, I just thought I'd update you. I've now spoken with the solicitor, and they've said my contract will be honoured, and unless they have someone 'champing at the bit' to get in at the end of my tenancy, which is unlikely in the current market, then I can go onto a rolling/periodic tenancy. Which will at least see me through to mid-Jan so I don't have to move just before xmas again and I can have an xmas tree for the first time in years! He is sending me a SO form for my rent to go to them directly, and says the only reason I was asked to pay the LA was because he believed it to be a fully managed property rather than let-only.

He has also said that it isn't a straightforward 'we have possession, your LL is history' kind of deal, and that if the LL pays his arrears it will be transferred back to him.

I'm almost disappointed, I've just seen these gorgeous little cottages...

http://www.rightmove.co.uk/viewdetails-18267427.rsp?pa_n=false&tr_t=rent

http://www.rightmove.co.uk/viewdetails-21353360.rsp?pa_n=false&tr_t=rent


:rolleyes:

Thanks for all you advice and information,
Stacie

franklee

Premier wrote: »

As I mentioned, if the lender wanted their money back, they don't need to wait for the fixed term to end, they can apply to the court for immediate re-possession, evicting the tenants without notice (but with prior court approval)

Housing Act 1988 Shedule 2, Ground 2


In this case, the lender has decided it is in their and the owners best interests to keep the property and the rental income it currently attracts rather than sell the property with vacant possession.

Ground 2 is a prior notice ground which means it should be used when the landlord has given prior notice that it could be used. This is usually done by putting it in the tenancy agreement. The either notice was given as mentioned in Ground 1 above or the court is satisfied that it is just and equitable to dispense with the requirement of notice refers to the prior notice. If you read ground 1 Not later than the beginning of the tenancy the landlord gave notice in writing to the tenant that possession might be recovered on this ground or the court is of the opinion that it is just and equitable to dispense with the requirement of notice and (in either case) you see it's preferring to the prior notice.

This is not to be confused with the actual notice to be given when it is decided that the notice is to be used. When it comes to giving the actual notice then ground 2 is two months notice. It does not matter if the fixed term is longer. So unlike the S21 it can ask the tenant to leave before the end of the fixed term.

But all this only applies if the lender gave permission to let. If that didn't happen then the tenancy agreement is just ignored as it has no standing. Then the tenant may get a nasty shock as he has not rights to any notice at all.

silvercar

franklee, are you suggesting that all landlords who don't have consent to lease, should write into the tenancy agreement that vacant possession could be required as per the housing act?

franklee

silvercar wrote: »

franklee, are you suggesting that all landlords who don't have consent to lease, should write into the tenancy agreement that vacant possession could be required as per the housing act?

Assuming the tenancy stated after the mortgage was taken out:

If there is no consent to let then the tenant has no rights should the property get repossessed so it would not matter if that was in there or not. I suppose the tenant could sue the landlord for breach of contract but who is going to sue someone who is broke?

But it's usually in standard contracts anyway (such as those from the main bodies or from agents) as I guess the standard contracts assume the landlord has permission. Even if he doesn't have permission to let having the odd extra clause or two in there wouldn't do any harm. So may as well put it in. Have a look at some of your contracts, you are looking for the bit where all the ways the landlord can ask for possession are listed. There's probably something about repossession and also something about if the property was your main home etc. etc.

iamstacie

Well, we had 2 months grace, before getting another letter from the solicitors in September. Again it arrived just before rent day so monies went to the LL, this time though he decided not to pass it on. The solicitors have taken over management of the property, and the lender now wants us out ASAP in order to sell with vacant possesion. We've agreed to leave 1 month early and have found another house to move to, subject to successful applications, and have to be out by 13th November.

Today I've been trying to find out how to get my deposit back, as no-one can do the check-out report (keys going to different EA) and I can't get hold of the LL. Its with the dispute service, which I'm told means the LL holds the deposit, and they just insure it. Does this mean I can get my deposit back through their insurance without having to chase the LL?

Trollfever

Just found this thread and would be interested to learn how it ended.