renting without buy to let

sparkle83

Hi there

we started renting from our friends in 2007, and they told us they had switched their mortgage to buy to let. I had already told them that I wouldnt sign a tenancy agreement unless they did. I found out from them a few weeks ago that actually they never swtched the mortgage. They asked the mortgage company, and were told no, they couldnt switch to buy to let and couldnt rent the property out.

What happens if they get caught? including deposit, we've paid 8.5k of rent to them, but would never have moved in if they'd been honest.

silvercar

If they get caught, the lender could force them to move to a BTL mortgage. This may involve a higher rate. The lender could also suggest they remortgage elsewhere. It only effects you if they fall behind with the mortgage payments and get repossessed. If they are true friends I guess this is unlikely to happen unless you fall behind with the rent and they can't afford the mortgage.

poppy10_2

If they fall behind on the mortgage payments and get repo'd, you will have no rights, the bank will not have to honour your rental contract and can kick you out with no notice.

theartfullodger

"Friends"!??? You've now evidence they lied about one thing (somewhat important thing too...) so we've established they are liars. what else have they lied about one would wonder...

Did you sign the agreement after 6th April 2007?? With a deposit?? Is it in a deposit protection scheme (it must be...)

I'd start looking elsewhere & find some new friends...

Cheers!

Lodger

sparkle83

we signed the agreement on 5th december 07. I told them the deposit had to go in to one of the schemes. I haven't asked yet about whether it actually _is_.

They were told by IF that there is no way they would give them a buy to let mortgage for the property, so I'm guessing they would be pretty angry that they did it anyhow.

what I did wonder is, as we signed the agreement when they had directly told us it was on buy to let, does this mean they've fraudulently gained money by deception?

As it is, they now want to sell, so we're looking elsewhere. I'm expecting them to kick off about returning our deposit (was only £100, but that is desperatly needed atm), and blame all the problems the house had when we moved in (damp, carpets needed cleaning, conservatory falling to bits) on us, and not give us a good reference.

I would never rent from friends again, and once I get what I need (deposit and decent reference for new property) I am very unlikely to speak to them any further.

Fire_Fox

If the deposit was in a scheme you would have received a letter to that effect.

theartfullodger

we signed the agreement on 5th december 07. I told them the deposit had to go in to one of the schemes. I haven't asked yet about whether it actually _is_.

a) Without the deposit in a scheme & duly notified to you then any Section21 notice (to quit etc) is invalid. You can probably stay there a long time if you want to (I wouldn't..) [Housing Act 2004 Section 215 I think]
b) Sue them for the deposit plus 3xdeposit as a fine for not putting it in the scheme: The deposit & 3xfine goes to you (!). [Housing Act 2004 Section 213(6)].

£5 also says they've probably not got Landlord Insurance so when the place burns down & you're 'orribly damaged their (household normal insurance) policy won't pay out - oh err...

Cheers!

Lodger

clutton_2

tenants do not always get letters from deposit schemes directly - for example mydeposits leave it to the landlord to send the tenant a copy of their Deposit Certificate

MissMoneypenny

clutton wrote: »

tenants do not always get letters from deposit schemes directly - for example mydeposits leave it to the landlord to send the tenant a copy of their Deposit Certificate

The prescribed information (all landlords must give the prescibed information to the tenant within 14 days of the deposit being taken, or be liable to 3x the rent and won't be able to issue a S21) contains details of the deposit scheme. As per - Housing, England & Wales, The Housing (Tenancy Deposits)(Prescribed Information) Order 2007.

As theartfullodger pointed out, they can't issue you with a S21 to vacate the property and are liable to pay you 3x the deposit.

I wonder if they have told the tax office they have rented out? When you are in your new house, you could always do your duty, and report them to HMRC hotline. You don't have to leave your details.
http://www.hmrc.gov.uk/tax-evasion/hotline.htm

clutton_2

has anyone found a link to "prescribed information " on Mydeposits ? i have recently switched to them and cannot find it . anyone ? thanks

MissMoneypenny

I don't know about a link from Mydeposits, but here is the statutelaw.gov.uk link
http://www.statutelaw.gov.uk/content.aspx?LegType=S.I.+%28All+UK%29&title=tenancy&Year=2007&searchEnacted=0&extentMatchOnly=0&confersPower=0&blanketAmendment=0&sortAlpha=0&TYPE=QS&PageNumber=1&NavFrom=0&parentActiveTextDocId=3248812&ActiveTextDocId=3248812&filesize=13890

The prescribed information has to be given to all interested parties ie a parent who gave the deposit.