Can you rent out a house post discharge that the OR has the BI of?

sieve

As the thread question states really.

If you are paying the mortgage on a house after discharge and haven't bought the BI off the OR, are you allowed to rent it out?

Just thinking aloud really because I'd like to move in with the Mrs once I'm discharged, but I want to contribute to her rent obviously. To do that though I'd need to rent out my house so that we could afford to (she'd also lose significant child benefit if I were to move in so I'd have to cover more than just rent/bills).

However the house is likely to still be heavily in negative equity then, and I don't want to buy the BI off the OR *just in case* doing so means any future shortfalls aren't provable - I'd be much happier waiting the 3 years for it to automatically transfer back to me and then seeing what the deal is then (I haven't been offered it myself yet anyway - waiting for that letter to arrive!).

Does anyone know? Don't want to bother my OR about it pre-DC as I don't want to wake any sleeping dogs (or delay my possible ED).

Cheers,

S

sieve

I should add that long term, ideally, I would like to keep the house - otherwise I would just be giving it back.

JPS29

Hi.

I am in this position now and yes you can still rent out the house. The BI the Or holds does not come into play unless you try to sell it (there will be a note/restriction lodged with land registry) or the OR forces sale(not likely due to neg equity)

You do say however that you intend to keep the property. IMHO I would pay the £211 to keep it rather than gambling that you may just get it handed back to you after the 3 year period. It may cost you a lot more in the future

A note from your sig just to kick you up the backside :-))

Don't ignore a problem. Unlike a bad smell, it won't eventually go away.


Hope this helps

JPS29

Forgot to add, I am a legit landlord with buy to let status on the mortgage, if this was your own residential home and you intend to just rent it out your mortgage co may refuse.....

debtinfo

Hi, sorry to disagree with OP, but if the property is solely owned (or jointly owned and both bankrupt) then the rent on the OR's asset would be due to the OR. and you would not be allowed to collect the rent. This would be the case until either an LPA receiver is appointed by the Mortgace company (as it is not a buy to let mortgage this will not happen) or you buy back the interest in the property at which time it can start working for you not the OR. Another point to add is that if it a residential mortgage then you must get permission from the mortgage company to rent it out or they could repossess the property for breaching the contract

JPS29

Hi Debtinfo.

maybe my circumstances are different but I checked with my Or re mine and was definitely ok to carry on renting out, as no IPA was in place they didnt want any rent/profit from it.

However I did state my intention to them from day 1 that I wanted the Bi back, and also it is a btl mortgage.

Agree re the mortgage co, as I stated before, also another thing just popped to mind, insurance would prob need looking at as a BTL.

sieve

debtinfo wrote: »

Hi, sorry to disagree with OP, but if the property is solely owned (or jointly owned and both bankrupt) then the rent on the OR's asset would be due to the OR. and you would not be allowed to collect the rent. This would be the case until either an LPA receiver is appointed by the Mortgace company (as it is not a buy to let mortgage this will not happen) or you buy back the interest in the property at which time it can start working for you not the OR. Another point to add is that if it a residential mortgage then you must get permission from the mortgage company to rent it out or they could repossess the property for breaching the contract

This is certainly the case pre-discharge but surely not after discharge if no IPA is in place?

Don't worry, I am aware of informing the mortgage company, I've rented out a flat under a mortgage before so know that's an essential part of it

Thanks,

S

debtinfo

There was a recent clarification (july 2009) on this subject sent to all Official Receivers by the technical section of the Insolvency service. It is is nothing to do with an IPA before the BI is bought back as it is not the bankrupts income, it is the Official Receivers income as the OR would be the landlord as they own the beneficial interest in the property

sieve

debtinfo wrote: »

There was a recent clarification (july 2009) on this subject sent to all Official Receivers by the technical section of the Insolvency service. It is is nothing to do with an IPA before the BI is bought back as it is not the bankrupts income, it is the Official Receivers income as the OR would be the landlord as they own the beneficial interest in the property

I'm not being petty here but surely the mortgage company is the landlord? Beneficial Interest doesn't affect title (and therefore landlordship) of the property, it just means they get profit when it sells. They of course could force the sale but if they don't, I don't see how owning the BI could entitle them to income for activities going on within the house during their ownership of that BI.

I'm not saying you are wrong, I'm just trying to understand the legalities of it all.

debtinfo

Is the property solely or jointly owned

debtinfo

the mortgage company are not the landlord they are just a charge holder on the property, it is the proprietor who is the landord and bankruptcy affects the proprietorship