Consent to Lease - stuck between a rock and a hard place!

franklee

N79 wrote: »

Plus, MissMoneyPenny if the bank fails to take action then they have tacitly agreed to any new tenancies and thus have acknowledged the rights of the tenants. The bank is aware that the property is let - they either repossess or they acknowledge the new state of affairs.

If the landlord falls into arrears and the lenders move to repossess, the tenant would not know those particular details of the converation between LL and lender so could not raise them and the lender is hardly going to mention it themselves and shoot themselves in the foot at a hearing. The landlord may not raise it either, if he is really in arrears by then. But of course a tenant should try to find out if the tenancy is binding on the lender and raise it if they can find out.

clutton wrote: »

""little or no time to vacate the property if the lender does a repossession,""

Please dont exagerate MissMP - repossessions don't happen overnight as we all know.

Lenders DO write to "The occupier" on several occasions - and have done for some time - tenants can then go to court and explain their circumstances to the judge. Judges do not like throwing families out onto the street - ESPECIALLY if they are the innocent victims in all this - and they will usually over-ride a Lenders solicitors plea for possession in 28 days or less if a family are in dire straits.

Yes there should be a "to the occupier" letter but that doesn't mean the tenant can move out without financial penalties for more rent if the landlord thinks he can stave off the repossession, as prince of pounds describes here:

http://forums.moneysavingexpert.com/showpost.html?p=23676205&postcount=37

Even ARLA have picked up that the dear occupier letter isn't sufficient e.g. here:

http://www.insidehousing.co.uk/StoryBlog.aspx?storycode=6503698

"‘Though ARLA, of course, welcomes any additional support for tenants in these tough times, the proposal to bring forward the planned extension of repossession notice to tenants will, in effect, be almost worthless because it comes at the wrong side of the repossession being granted,’ said operations manager Ian Potter.

‘Tenants will receive up to seven weeks’ notice of an order being sought but that assumes that a repossession will be granted – and if it isn’t, and tenants walk away from the property, they will have walked away from a legally binding contract. It would be far more beneficial if the extended notice was granted after a repossession had been granted, which would allow tenants good time to find another property.’

ARLA says it would be better to insist that local authorities make more use of empty dwelling management orders and to encourage more lenders repossessing buy-to-let property to let tenants stay and use the rent in receivership procedure.

Neither of those proposals would do much to help the unknown number of tenants who can be evicted if landlords have rented out their property without telling their lender.

Tenants need to check whether the landlord really does have the lender’s consent to rent and that check should also be a basic part of a letting agent’s service. However, as ARLA complains today, the recession has led to a flood of unregulated estate agents into the rental sector with little experience of the complex legislation."

Also it does not address the situation where the incumbent tenant moves out on receipt on the Dear Occupier letter (e.g. by being on a periodic tenancy and thus able to give valid notice) and then the landlord moves a new tenant in during the weeks before the court hearing. The new tenant will be totally in the dark and will not even know of the hearing in order to plead for longer. (If the tenancy isn't binding on the lender does the judge have discretion to take the tenant into account, I had thought not and even then it's not certain they will?).

This seven weeks notice of a possession hearing is just a small sticking plaster failing to cover a big gap, at the very least receipt of that letter *should* allow the tenant to walk away without giving notice even if that means going in the middle of a fixed term - but if course it as yet does not. (It puzzles me why the problem isn't clear given the number of times it's been explained).

clutton_2

i agree this is a difficult and unfair situation but

""Neither of those proposals would do much to help the unknown number of tenants""

but until some research is done, we cannot quantify how many folks are being affected in this way

to put the reverse of this case forward

i know 2 landlords who were buying property from folks who had got themselves into debt and who were about to face repossession and who wanted a clean start. In between exchange and completion, these tenants remortgaged their property, so when the completion took place the purchaser had more of a debt to settle with the vendors lender than they had agreed to .....

there are sharks in every aspect of every business in this land - lets keep things in proportion

franklee

clutton wrote: »

i agree this is a difficult and unfair situation but

""Neither of those proposals would do much to help the unknown number of tenants""

but until some research is done, we cannot quantify how many folks are being affected in this way

Absolutely we do not know the numbers, but it does seem to come up on this forum an awful lot and as we are a very small section of the renting community that's just a tip of the iceberg. I once did a quick search of this forum and put up some links to only a small number of those I found (got bored doing it):

http://forums.moneysavingexpert.com/showpost.html?p=18120329&postcount=106

Since posting that it still comes up regularly which is not that surprising as landlord repossessions have been rising and as you mentioned before, there is often a lot of temptation for a LL not to declare the let to the lender (charges and higher interest rates or being refused if there is not enough equity).

They need to legislate to get the loopholes closed IMO, which they have been discussing, announcing good intentions and discussing a bit more ...

Meanwhile the best a tenant can do is check for consent to let and preferably that mortgage payments are up to date at tenancy start to get the best chance of being OK or at least being kept informed. Course for asking the tenant may get told to !!!! off which is good advice if the answers aren't forthcoming

clutton_2

""but it does seem to come up on this forum an awful lot and as we are a very small section of the renting community that's just a tip of the iceberg.""

please let us not forget that Dr Julie Rugg found that the vast majority of landlord-tenant relationships are fine -

its like everything in the uk - only the negative stuff gets the publicity

i have read that the actual number of landlords experiencing repossessions (*as part of the total repossession figures) is very small nationally - so lets not blow this up into too big a monster

and before i get flamed - yes i know that losing your home is a very difficult thing - and one too many tenants being unfairly chucked out is too many, but, life was never guaranteed to be fair in any aspect.

Some tenants get shafted by poor landlords
some landlords get shafted by poor tenants

each group will always think their group is the most badly done by ...

all we can continue to do is to exchange views and hope that by diong that more compromise can be found

franklee

clutton wrote: »

""but it does seem to come up on this forum an awful lot and as we are a very small section of the renting community that's just a tip of the iceberg.""

please let us not forget that Dr Julie Rugg found that the vast majority of landlord-tenant relationships are fine -

its like everything in the uk - only the negative stuff gets the publicity

i have read that the actual number of landlords experiencing repossessions (*as part of the total repossession figures) is very small nationally - so lets not blow this up into too big a monster

and before i get flamed - yes i know that losing your home is a very difficult thing - and one too many tenants being unfairly chucked out is too many, but, life was never guaranteed to be fair in any aspect.

Some tenants get shafted by poor landlords
some landlords get shafted by poor tenants

each group will always think their group is the most badly done by ...

all we can continue to do is to exchange views and hope that by diong that more compromise can be found

Right, the whole point is you do your due diligence not because you expect problems but in order to avoid them.

As a LL part of your due diligence is to reference the tenant.

As a tenant mine is to check (amongst other things) for consent to let, and that the mortgage is paid up to date at the start of the tenancy.

It's the old hope for the best but prepare for the worst, which we both do

clutton_2

i have taken on several tenants who have CCJs - i believe in giving people a second chance whenever i can - in years gone by i was given second chances by folks who were willing to take a risk - and 90% of the time my trust has not been abused .....