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MissMoneypenny
Posts: 5,324 Forumite
If you are renting or intending to rent, make sure that you check that the landlord has received permission from their mortgage lender, to let the property. Renting from a landlord who doesn't have their mortgage lenders permission, could cost you time; money; hassle and stress.
Don't assume that because you are renting through a letting agent, that they would have checked that the landlord has been given their mortgage lender's permission. Or that the letting agent have would have checked to confirm that the landlord is registered owner of the property. Anyone can set themselves up as a letting agent. If the letting agent has checked these details, then they will be able to show you evidence of these points, if you ask them.
If the landlord hasn't received permission from their mortgager lender to let the property, you are an unauthorised tenant. If the property is repossessed by the mortgage lender, an unauthorised tenant does not have the same legal rights as authorised tenants, as your tenancy may not be binding on the lender.
From gov.uk (link below) *
"The term ‘unauthorised tenants’ refers to those tenants who are renting a mortgaged residential property from a landlord who has let the property without the knowledge or consent of the lender, and in contravention of the mortgage agreement. Such a tenancy is known as an ‘unauthorised tenancy’ because the tenancy agreement is unenforceable against the lender."
Unauthorised Tenancy/Tenants'
Often people with financial problems will do anything to try to hang onto their property, even if this means they let the property without their mortgage lenders permission. From Shelter England "The tenant is likely to have fewer rights and is more likely to face homelessness."
The landlords' with financial problems will also often not have the money to carry out essential repairs on their property i.e. a new boiler; leaking roof.
Beware of landlords' who have their mortgage correspondence delivered to the property you are renting. Their mortgage lender will know the landlord's new address if they have given their Consent to Let.
Some landlords' who don't have their mortgage lenders Consent to Let, use the Royal Mail redirection service. If you suspect this, address an envelope to your landlord at the address you are renting and see if that envelope arrives on your mat.
Authorised Tenancy/Tenants'
The landlords' of these properties will have their mortgage lenders permission to let the property. The mortgage lender will know there may be a tenant in the property. Your tenancy is binding on the lender.
These landlords' will either have:-
You can check if the landlord has a Buy to Let mortgage by looking on the government's Land Registry and downloading a copy of the properties deeds for just £3.
http://www.landregistry.gov.uk/public/property-ownership
On those deeds, look under 'Charges' where the name of the lender will be listed and the name and address of the property owner, will be listed too. A buy to let mortgage should show that the mortgage lender has the landlord's address listed at a different address to the property the landlord has let.
It's also worthwhile knowing that the landlord is the registered owner so as to avoid any subletting issues. You will then also have the landlord's address should you need to issue any legal action.
If the landlord has Consent to Let, they will have a letter of authorisation from their mortgage lender with the dates that consent starts and ends. You can always take a copy of the Consent to Let and ask the lender to verify it. A landlord who has forged a document is likely to be unwilling to give a copy. If they say they have received Consent to Let but are not willing to show this authorisation to you; then you can draw your own conclusion. If you are renting through a letting agent, ask to see proof of the landlord's Consent to Let.
If your rental property is being repossessed by the landlord's lender.
** England Shelter have a guide
http://england.shelter.org.uk/get_advice/repossession/repossession_by_a_landlords_lender
You can also use the above link to see if your tenancy is binding on the mortgage lender and as a guide on what to do if your landlord is having your home repossessed.
If the tenancy isn't binding on the lender, then you will need to approach the lender to ask for a delay on the repossession while you find another property to move to: make sure you receive any permission from them, in writing. If they decline, then you need to apply to the court for the two months to find another property and move under The Protection of Tenants Act 2010, but being granted two months under this Act to find another property and move, isn't a given. Details of how to do this are on the England Shelter link above.**
You can also look at your rights on the following link.
* The Protection of Tenants Act 2010
https://www.gov.uk/government/publications/mortgage-repossessions-protection-of-tenants-etc-act-2010-guidance
If your tenancy isn't binding on the lender,
If your tenancy isn't binding on the lender, then you have a lot of hassle to go through to try to be granted 2 months under the new Act above, to find another property and move.
1. The two months delay the new act gives isn't automatic so there is a chance (even if small) it may not be granted - not sure what a tenant is supposed to do then. Technically the tenant should have approached the lender first to ask for a delay and been declined before asking at court so may not realise to have done that. The guidance says a tenant should ask for the delay asap, so not sure how that works if the repossession is staved off after the tenant has asked for the delay, as the tenant may have already committed themselves to move.
2. The new Act still does not help those tenants who have more than 2 months to run on their fixed tenancy. For example: if there are months of the fixed term left, the tenant; on hearing of a possible repossession; isn't free to move until he knows the repossession is definitely going ahead yet does not know if the fixed term will be cut short. Far more stressful and difficult to manage than when the tenancy is binding on the lender so the tenant knows he will be served notice.
It may be that these tenants' have to pay rent on two properties at the same time (another property and the one that might be repossesed) to ensure they have somewhere to live; right up until the fixed contract ends, or they are told otherwise. Strangely, although the tenancy contract might not be binding on the mortgage lender if they haven't given their permission to the landlord; the tenancy contract is binding between these unauthorised landlords' and the unsuspecting tenant!
3. Neither does the new Act help those who have paid the entire rent for the fixed term, in advance. This money could be lost; unless they take legal action against the landlord and the landlord has the money to repay the tenant. See below ***
After the repossession and if you found you had an unauthorised tenancy.
*** From the House of Commons Library
Mortgage Repossession: Rights of Tenants
Standard Note: SN/SP/5019.
Last updated: 24 October 2011
Author: Wendy Wilson.
Social Policy Section.
"Action against the landlord
Landlords who default on their mortgage payments and whose tenants lose their home as a result of possession action by lenders will be in breach of their contracts with their tenants. That a landlord may have rented a property without permission would not affect the position of the tenants who have been renting in this respect. It is open to tenants to bring a civil claim for compensation against their landlords based on breach of an implied term in the tenancy that the landlord will not “derogate from the grant of the tenancy”, i.e. act in such as way as to fundamentally undermine the existence of the tenancy."
If the landlord does not have other property, or is in severe financial difficulty, it may not be worth chasing the landlord. Look at options for taking action against the Letting Agent i.e. Taking by Deception or Aiding and Abetting.
Legal Insurance
Tenants should take out the extra option of Legal Cover when they take out their home contents insurance, but ensure the Legal Cover section does not have an exemption against taking action against, or defending against, a landlord. This policy will need to be taken out before you find you have problems with the landlord, as the insurers will not act retrospectively, nor pay you back any legal expenses before they have agreed to take your case.
Do other families a favour.
You can report the landlords' who don't have permission to let, to their lender (details of the lender can be found on the Land Registry deeds - link above under the title "Authorised Tenancy/Tenants' ") and enclose any evidence you have that they are trying to let the property. The mortgage lender could recall the mortgage, or impose an instant interest rate rise on the borrower (the landlord) with all back fees and costs added to their mortgage.
If the landlord didn't have their lenders permission to let the property, then they might not have been paying their taxes either. You can report them to HMRC online or by phone. You don't have to leave your details.
http://www.hmrc.gov.uk/reportingfraud/
=========================================================
Tenants' with an Overseas Landlord.
Another important point that has come up for renters on this sticky, is for those that pay their rent to an overseas landlord instead of paying their rent to a letting agent. If their rent is more than £100 a week, then these tenants' are responsible for deducting the landlord's tax unless HMRC tells the tenant not to. See the relevant link below from HMRC below.
****
http://www.hmrc.gov.uk/international/nr-landlords.htm
The Non-Resident Landlords (NRL) Scheme is a scheme for taxing the UK rental income of non-resident landlords.
The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount to tax the letting agent/tenant can take off deductible expenses.
Letting agents and/or tenants don't have to deduct tax if HM Revenue & Customs (HMRC) tells them not to HMRC will tell an agent/tenant not to deduct tax if non-resident landlords have successfully applied for approval to receive rents with no tax deducted
If your rent is more than £100 a week and you are already paying an overseas landlord directly (instead of a letting agent) then contact HMRC to arrange taking the tax that the landlord already owes, from your future rent. You are the one who is responsible for this and you can also take your deductable expenses (see the link above). ****
=============================================
With thanks to franklee for their contribution.
Don't assume that because you are renting through a letting agent, that they would have checked that the landlord has been given their mortgage lender's permission. Or that the letting agent have would have checked to confirm that the landlord is registered owner of the property. Anyone can set themselves up as a letting agent. If the letting agent has checked these details, then they will be able to show you evidence of these points, if you ask them.
If the landlord hasn't received permission from their mortgager lender to let the property, you are an unauthorised tenant. If the property is repossessed by the mortgage lender, an unauthorised tenant does not have the same legal rights as authorised tenants, as your tenancy may not be binding on the lender.
From gov.uk (link below) *
"The term ‘unauthorised tenants’ refers to those tenants who are renting a mortgaged residential property from a landlord who has let the property without the knowledge or consent of the lender, and in contravention of the mortgage agreement. Such a tenancy is known as an ‘unauthorised tenancy’ because the tenancy agreement is unenforceable against the lender."
Unauthorised Tenancy/Tenants'
Often people with financial problems will do anything to try to hang onto their property, even if this means they let the property without their mortgage lenders permission. From Shelter England "The tenant is likely to have fewer rights and is more likely to face homelessness."
The landlords' with financial problems will also often not have the money to carry out essential repairs on their property i.e. a new boiler; leaking roof.
Beware of landlords' who have their mortgage correspondence delivered to the property you are renting. Their mortgage lender will know the landlord's new address if they have given their Consent to Let.
Some landlords' who don't have their mortgage lenders Consent to Let, use the Royal Mail redirection service. If you suspect this, address an envelope to your landlord at the address you are renting and see if that envelope arrives on your mat.
Authorised Tenancy/Tenants'
The landlords' of these properties will have their mortgage lenders permission to let the property. The mortgage lender will know there may be a tenant in the property. Your tenancy is binding on the lender.
These landlords' will either have:-
- a Buy to Let mortgage
- or they have received Consent to Let (written permission) from their lender for a limited time.
You can check if the landlord has a Buy to Let mortgage by looking on the government's Land Registry and downloading a copy of the properties deeds for just £3.
http://www.landregistry.gov.uk/public/property-ownership
On those deeds, look under 'Charges' where the name of the lender will be listed and the name and address of the property owner, will be listed too. A buy to let mortgage should show that the mortgage lender has the landlord's address listed at a different address to the property the landlord has let.
It's also worthwhile knowing that the landlord is the registered owner so as to avoid any subletting issues. You will then also have the landlord's address should you need to issue any legal action.
If the landlord has Consent to Let, they will have a letter of authorisation from their mortgage lender with the dates that consent starts and ends. You can always take a copy of the Consent to Let and ask the lender to verify it. A landlord who has forged a document is likely to be unwilling to give a copy. If they say they have received Consent to Let but are not willing to show this authorisation to you; then you can draw your own conclusion. If you are renting through a letting agent, ask to see proof of the landlord's Consent to Let.
If your rental property is being repossessed by the landlord's lender.
** England Shelter have a guide
http://england.shelter.org.uk/get_advice/repossession/repossession_by_a_landlords_lender
You can also use the above link to see if your tenancy is binding on the mortgage lender and as a guide on what to do if your landlord is having your home repossessed.
If the tenancy isn't binding on the lender, then you will need to approach the lender to ask for a delay on the repossession while you find another property to move to: make sure you receive any permission from them, in writing. If they decline, then you need to apply to the court for the two months to find another property and move under The Protection of Tenants Act 2010, but being granted two months under this Act to find another property and move, isn't a given. Details of how to do this are on the England Shelter link above.**
You can also look at your rights on the following link.
* The Protection of Tenants Act 2010
https://www.gov.uk/government/publications/mortgage-repossessions-protection-of-tenants-etc-act-2010-guidance
If your tenancy isn't binding on the lender,
If your tenancy isn't binding on the lender, then you have a lot of hassle to go through to try to be granted 2 months under the new Act above, to find another property and move.
1. The two months delay the new act gives isn't automatic so there is a chance (even if small) it may not be granted - not sure what a tenant is supposed to do then. Technically the tenant should have approached the lender first to ask for a delay and been declined before asking at court so may not realise to have done that. The guidance says a tenant should ask for the delay asap, so not sure how that works if the repossession is staved off after the tenant has asked for the delay, as the tenant may have already committed themselves to move.
2. The new Act still does not help those tenants who have more than 2 months to run on their fixed tenancy. For example: if there are months of the fixed term left, the tenant; on hearing of a possible repossession; isn't free to move until he knows the repossession is definitely going ahead yet does not know if the fixed term will be cut short. Far more stressful and difficult to manage than when the tenancy is binding on the lender so the tenant knows he will be served notice.
It may be that these tenants' have to pay rent on two properties at the same time (another property and the one that might be repossesed) to ensure they have somewhere to live; right up until the fixed contract ends, or they are told otherwise. Strangely, although the tenancy contract might not be binding on the mortgage lender if they haven't given their permission to the landlord; the tenancy contract is binding between these unauthorised landlords' and the unsuspecting tenant!
3. Neither does the new Act help those who have paid the entire rent for the fixed term, in advance. This money could be lost; unless they take legal action against the landlord and the landlord has the money to repay the tenant. See below ***
After the repossession and if you found you had an unauthorised tenancy.
*** From the House of Commons Library
Mortgage Repossession: Rights of Tenants
Standard Note: SN/SP/5019.
Last updated: 24 October 2011
Author: Wendy Wilson.
Social Policy Section.
"Action against the landlord
Landlords who default on their mortgage payments and whose tenants lose their home as a result of possession action by lenders will be in breach of their contracts with their tenants. That a landlord may have rented a property without permission would not affect the position of the tenants who have been renting in this respect. It is open to tenants to bring a civil claim for compensation against their landlords based on breach of an implied term in the tenancy that the landlord will not “derogate from the grant of the tenancy”, i.e. act in such as way as to fundamentally undermine the existence of the tenancy."
If the landlord does not have other property, or is in severe financial difficulty, it may not be worth chasing the landlord. Look at options for taking action against the Letting Agent i.e. Taking by Deception or Aiding and Abetting.
Legal Insurance
Tenants should take out the extra option of Legal Cover when they take out their home contents insurance, but ensure the Legal Cover section does not have an exemption against taking action against, or defending against, a landlord. This policy will need to be taken out before you find you have problems with the landlord, as the insurers will not act retrospectively, nor pay you back any legal expenses before they have agreed to take your case.
Do other families a favour.
You can report the landlords' who don't have permission to let, to their lender (details of the lender can be found on the Land Registry deeds - link above under the title "Authorised Tenancy/Tenants' ") and enclose any evidence you have that they are trying to let the property. The mortgage lender could recall the mortgage, or impose an instant interest rate rise on the borrower (the landlord) with all back fees and costs added to their mortgage.
If the landlord didn't have their lenders permission to let the property, then they might not have been paying their taxes either. You can report them to HMRC online or by phone. You don't have to leave your details.
http://www.hmrc.gov.uk/reportingfraud/
=========================================================
Tenants' with an Overseas Landlord.
Another important point that has come up for renters on this sticky, is for those that pay their rent to an overseas landlord instead of paying their rent to a letting agent. If their rent is more than £100 a week, then these tenants' are responsible for deducting the landlord's tax unless HMRC tells the tenant not to. See the relevant link below from HMRC below.
****
http://www.hmrc.gov.uk/international/nr-landlords.htm
The Non-Resident Landlords (NRL) Scheme is a scheme for taxing the UK rental income of non-resident landlords.
The scheme requires UK letting agents to deduct basic rate tax from any rent they collect for non-resident landlords. If non-resident landlords don't have UK letting agents acting for them, and the rent is more than £100 a week, their tenants must deduct the tax. When working out the amount to tax the letting agent/tenant can take off deductible expenses.
Letting agents and/or tenants don't have to deduct tax if HM Revenue & Customs (HMRC) tells them not to HMRC will tell an agent/tenant not to deduct tax if non-resident landlords have successfully applied for approval to receive rents with no tax deducted
If your rent is more than £100 a week and you are already paying an overseas landlord directly (instead of a letting agent) then contact HMRC to arrange taking the tax that the landlord already owes, from your future rent. You are the one who is responsible for this and you can also take your deductable expenses (see the link above). ****
=============================================
With thanks to franklee for their contribution.
RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.
Read the sticky on the House Buying, Renting & Selling board.
0
Comments
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And I thought I was the only one with nothing better to do on a Saturday night!0
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Unfortunately, we are once again seeing threads from people who want to rent their property and are refusing to ask permission to let from their lenders.RENTING? Have you checked to see that your landlord has permission from their mortgage lender to rent the property? If not, you could be thrown out with very little notice.
Read the sticky on the House Buying, Renting & Selling board.0 -
Is that aimed at me because I can assure you that all my properties are correctly registered with my lenders - after all they are all on BTL mortgages.0
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Is that aimed at me because I can assure you that all my properties are correctly registered with my lenders - after all they are all on BTL mortgages.
Then why are you getting upset about people checking that a landlord has permission to rent?
As a landlord myself, I think that is an absolute must that renters check Land Registry to see if a landlord has been granted permission to rent from their lenders.0 -
Upset - moi!
That was jovial banter and I think the amount of tenants that have actually checked is less than the people in this threesome!0 -
I think the amount of tenants that have actually checked is less than the people in this threesome!
Daft isn't it. People will spend hundreds paying for credit checks and moving costs, but won't spend £3 on Land Registry to check the landlord has been granted permission to rent. It will cost them thousands in storage and hotel bills if they have to move out of the rental without notice.0 -
To be honest though - if a mortgage is being serviced even if the lender found out I doubt people would be turfed out.
Seems a bit extreme - perhaps people can let us know what happened in their experience.0 -
So if I decide to let out the house I currently own and live in, after getting permission from my lender, does my lender change my place of residence on the land reg documents?0
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Now theres a question and a half - over you to you Moneypenny!0
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As TJ27 points out, if the property was previously the main residence of the (now) landlord, the land registry will show the property address as the registered address of the owner. The landlord could well have consent to let from the lender, or he may not.
If the property was bought as a BTL then the registered address would be different.
There is also no way of knowing if the landlord has offered the property as security for any business loans etc. Even if the landlord has "just" given personal guarantees to banks, in the event of a business folding, the lender could pursue a charging order on the property and eventually try to take possession of it.I'm a Forum Ambassador on The Coronavirus Boards as well as the housing, mortgages and student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.0
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