Flat Notice of Receivership

purplebiro

Hi,

My close friend has rented a city centre apartment in Manchester for approx. 4 years and last week received a letter addressed to occupier informing his landlord that she was in arrear (to the tune of approx £6k) on her mortgage and receivers had been appointed to her case.

The letter made no mention of how proceedings will continue from here or how my friend's tenancy stands. He is on a rolling month-by-month agreement. My guess is that the landlord has a buy-to-let mortgage as she owns several other properties in the same building.

Any ideas on how best to proceed? Also, my friend may be interested in purchasing the property (for the right price). How should he go about notifying the lender of his intentions and would the property still have to go to open market?

Any thoughts, comments etc, welcome as always.

socrates

Firstly stop paying the rent - but put it into a savings a/c until the matter is sorted.

If there are LA's involved inform them in writing of your intentions - and also your LL.

You can offer to buy the property from the lender - it depends on their exposure as to what the asking price will be.

It will not harm to ask.

If there is not going to be a purchase start looking for somewhere to live.

This is all directed towards your friend BTW

purplebiro

Cheers, I'm pretty sure my friend pays his rent to an agency who send it on to the landlord - should he still stop paying?

And, sorry, humour the newb - "LA"???

socrates

LA = Letting Agents

Yes still stop paying - whatever they tell you - as they will want their fees - its not your problem.

BUT make sure the money is available if demanded by the lender at some later point.

I am sure others will add more useful advice on this one - its a very current topic

silvercar

You need to inform whoever sent the letter that the property is tenanted; the lender may not know the property is currently occupied. Ask for confirmation that if the property is repossessed the tenancy will be ackowledged. It may be helpful to enclose a copy of your tenancy agreement.

franklee

Agree with all the above. Your friend really needs to know if the tenancy will be honoured, that is will he get a proper two months notice to leave as one would expect on a periodic tenancy (rolling month-by-month).

Your friend needs to check to see if he was served a Section 21 notice in the past. Many agents do this as routine to all tenants. If that was served properly then your friend has no rights to notice anyway.

Alternatively the lender may allow the tenancy to continue and collect the rent.

So your friend needs to make contact with the lender and reciever to tell them he is there and to see if they will let him know what they are planning to do. They may not talk to him at all.

I would not bet on it being a buy to let mortgage as the lender wrote to the occupier at the tenant's address, presumably expecting the landlord to be there, as a lender would not disclose the size of arrears to a tenant. On the other hand 6K of arrears sounds quite large so it seems this has been going on for some time so perhaps the landlord isn't responding to correspondence at his usual address and so the lender wrote to the rental property?

I would also withhold rent paying it into an account where it can be saved ready to pay once the situation comes clear. I'd tell the lender and agent of this.

Your friend also needs to consider who is holding his deposit and how will he get it back? Presumably it isn't protected in a scheme as the tenancy is so old?