RENTING? Check your LL has permission to let that property.

prudryden

Sounds like she doesn't have a mortgage anymore. Lot of LLs have paid off their mortgages, at least, those that can.

franklee

Yes if there is no mortgage or borrowing against the property then there is no problem as far as consent to let from the lender goes as there is no lender

delicious11

But is it a huge crime not to inform the Lender that you intend to rent out the property you previously lived in? After all, the Lender is only after more money. The current BTL interest rates are a clear testament of this. I think that as long as one has the correct safety certificates (Gas and electric) in place the the owner has every right to do what they want with their property.

First_Time_Buyer_Guru

Hi delicious11

You're absolutely right that the owner of a property should be able to do what they want with a property they own. The problem is, until someone has entirely paid off their mortgage, they fundamentally only own a portion of it. The lender can certainly have every right to withdraw the mortgage should the borrower operate outside the mortgage agreement.

Ultimately though, I suspect there's a huge number of landlords currently using residential mortgages in the UK. At the end of the day, as long as they keep their mortgage payments, why should anyone know?! They most likely never will, but it's a huge risk for a few reasons. The major one for a landlord is insurance purposes should anything happen to the property. For example, what if a tenant accidentally burnt down the house?! I'm not calling you a arsonist! I do agree though that it's not really fair that if you buy a property you can't do whatever you want in it.

franklee

Some consent to let comments from Tessa regarding the new code of practice for letting agents:
http://www.landlordlawblog.co.uk/2011/08/03/residential-letting-agents-get-new-code-of-practice/

Extract:

Clause 2d requires the agent to advise a landlord to obtain any necessary consents, e.g. from mortgage lenders, and inspect any necessary consents.

Tessa also links to this article:
http://www.landlordtoday.co.uk/news_features/I-was-vetted-%E2%80%93-so-why-arent-landlords-asks-tenant

Extract:

Friday 5th August 2011

A lettings agent is to start running checks on landlords after a tenant lost his flat when it was repossessed because the landlord was in mortgage arrears.

Daniel Thomas, boss of The Property Shop, said his company will in future insist that landlords produce evidence that they have the correct permission to rent out mortgaged property.

Landlords with the Midlands agency will either have to show that they have a buy-to-let mortgage or a letter of authority from their mortgage lender, acknowledging that they know the property is being let out. Either would give the tenant some protection should the landlord go into arrears.

franklee

The above linked article illustrates the problems this issue is still causing. Extract:

The check is being introduced after tenant Mathew Hall discovered that the flat he was renting was the subject of repossession proceedings just three days after he picked up the keys.

Initially, The Property Shop advised him he could not legally withdraw from his six-month tenancy agreement and it was still possible the landlord would settle his arrears. But three weeks later, a court order was sent to the flat advising that bailiffs would repossess it on July 26.

MissMoneypenny

franklee wrote: »

The above linked article illustrates the problems this issue is still causing. Extract:

The check is being introduced after tenant Mathew Hall discovered that the flat he was renting was the subject of repossession proceedings just three days after he picked up the keys.

One of the letting agents in Dartford said they had someone come in and ask them to find a tenant for his house. When this LA did their landlord checks (identity check; proof of ownership of the house; in-date Consent to Let or Buy to Let; up to date mortgage statement) they discovered he already had a repossession order on it!

They didn't know if he managed to let the property out by using a letting agent who didn't bother to check potential landords, or by advertising the house privately.

franklee

This poster is caught with repossession action started, no consent to let and the tenancy with seven months of the fixed term left so they have the dilemma of when they can leave:

https://forums.moneysavingexpert.com/discussion/3433033

TroubledLandlord

Don't wish to let facts get in the way of a good witch hunt, but even if the owner had a proper B2L mortgage it wouldn't have stopped him defaulting, in fact it would make it more likely. It would'nt have given the tenant more protection, you would've have the same result.The mortgage type is not the issue here, it's landlords not paying it that is the problem.

franklee

TroubledLandlord wrote: »

Don't wish to let facts get in the way of a good witch hunt, but even if the owner had a proper B2L mortgage it wouldn't have stopped him defaulting, in fact it would make it more likely. It would'nt have given the tenant more protection, you would've have the same result.The mortgage type is not the issue here, it's landlords not paying it that is the problem.

If the tenancy is binding on the landlord's lender the tenant gets a minimum two months notice. If the property is repossessed the fixed term may be cut short but at least the tenant knows the tenancy will come to an and in an orderly fashion, likely with two months notice under section 8. This is quite a long procedure as after the two months notice if the tenant doesn't leave a possession order will have to be obtained. The tenant knows where they stand.

Without consent to let the tenant is often kept in the dark, they need to recognise the "Dear Occupier" letters, hoping they didn't arrive before the tenancy started, attend the possession hearing if they can get there in time, apply for a two months stay of execution which they can't be 100% sure will be granted. From the threads it's the uncertainly which is the problem. If for example the landlord pays up at the last and staves off the repossession the tenant will find he is bound for the fixed term after all which means the tenant is unsure till late on when he can arrange a new tenancy elsewhere without a risk of having to pay two lots of rent during any overlap.

Far better for a tenant to know that whatever happens they will automatically get notice under the tenancy agreement and that it takes a long time to enforce. I really don't see why some landlords have so much difficulty in seeing why certainty of when rent liability will end and plenty of time to arrange moving without having to get involved in the ins and outs of the repossession would make a difference to a tenant.

However things are now much better for a tenant than they were before the Mortgage Repossessions (Protection of Tenants etc) Act 2010, yet even before the act came in we had landlords here lining up to say consent to let didn't matter.

Not to mention the case Tessa linked to, see post #428 above and if you read the thread linked to in the post before yours you will see the problems the uncertainty is causing the tenant.