Tenant evicted when landlord is repossessed

m_13

It's not that the police are reluctant to do their job. It's just that civil law is used more often for mortgage cases.

Section 240 relates to a civil recovery procedure which enables the Asset Recovery Agency (ARA now SOCA) to deal with property obtained through unlawful conduct after referral by law enforcement agencies where:

1. criminal investigation has been carried out but insufficient evidence has been uncovered to pursue criminal charges; or
2. a decision not to institute criminal proceedings is made due to public interest criteria; or
3. confiscation proceedings have failed due to procedural faults; or
4. where the defendant is beyond the reach of criminal proceedings because that person is dead or abroad or there is no reasonable prospect of securing his extradition or that the person has been convicted of an offence abroad but has recoverable property in the UK.

The Assets Recovery Agency has actually gone and has been merged with the Serious Organised Crime Agency as of January 2007.

Take a look at http://www.cps.gov.uk/legal/p_to_r/confiscation_and_ancillary_orders_post_poca/

The purpose of confiscation proceedings is to deprive the defendant of the financial benefit that he or she has obtained from criminal conduct. To do this the court must decide whether the defendant, has a criminal lifestyle. If it decides that he or she does have a criminal lifestyle then Court calculates the benefit from general criminal conduct using the assumptions set out in the Proceeds of Crime Act 2002 (POCA). If it decides that he or she does not have a criminal lifestyle, the Court will instead calculate the benefit from particular criminal conduct (the actual offences of which the defendant is convicted).

Under the section on Confiscation (the way that the money is clawed back) you'll see:

• If there is a victim, whether civil proceedings are being pursued. If they are and an injunction is in place freezing all the defendant's assets, confiscation is unlikely.
• Bankruptcy of the defendant. If this has occurred, the defendant's assets will vest in the trustee in bankruptcy, the person responsible for settling the defendant's debts. Confiscation may not be viable.

In essence, unless criminal proceedings are successful or the person is deemed to have been living a 'criminal lifestyle' then confiscation under POCA cannot take place.

roger196

princeofpounds wrote: »

Roger, this actually happened to me and I think it's a real big black hole in the tenancy legislation.

Can I ask in what capacity you are submitting this? And what this process is exactly?

.

I am responding to a consultation document issued by Department of Communities and Local Government called " Lender repossession of residential property: protection of tenants". Go to www.communities.gov.uk and look for consultation docs, or ring 020-7944-2240. Closing dates for submission is 14th October 2009. The more people who respond the better, especially those at the sharp end of what goes wrong.
I am a retired university lecturer, though I usually respond in the area of tax and social security (and their interaction).
I find other peoples comments on my proposed draft particularly helpful.
I hope this encourages you to submit your views, as this is the only way that desirable change can be bought about.

Roger

princeofpounds

Ok, I might just do that thanks.

franklee

princeofpounds wrote: »

Ok, I might just do that thanks.

That would be good as you have first hand experience. Other mentions of the consultation here:

http://forums.moneysavingexpert.com/showthread.html?p=24179847#post24179847

http://forums.moneysavingexpert.com/showpost.html?p=24192827&postcount=206

roger196

m_13 wrote: »

Bankruptcy of the defendant. If this has occurred, the defendant's assets will vest in the trustee in bankruptcy, the person responsible for settling the defendant's debts. Confiscation may not be viable.
.

Thanks for your reply, I will have a look at the website you mention.

The quote above does not seem to take into account that fraud debts survive bankruptcy by virtue of Section 281(3) Insolvency Act 1986.

Roger

m_13

That may be the case but there is no point one bit of the Government (SOCA) fighting another bit for money!

The guidance from the CPS states that if the person is going through bankruptcy then confiscation may not be viable. However, as stated before the person would had had to be criminally investigated first and so SOCA would probably be joining a long list of people trying to get their money back. In this scenario it's particularly unlikely that the mortgage company would be willing to give any money back to the tenant!

I realise what you are trying to do but it would be much simpler if something existed to prove permission to let if mortgaged or leasehold rather than trying to prove fraud and recover monies after the horse has bolted.

edgex

If the LL has a mortgage on the property, it should be a mortgage that allows them to let out the property.
Proof of this from the bank should be kept on file by the letting agent & landlord, in the same way as gas & electrical safety certificates should be.
This proof would then be available for viewing by current & prospective tenants.

Same would apply to buildings (& contents) insurance, & any other areas that require permission/notification to allow letting.


Letting agents should ONLY take onto their books properties which either meet the above requirements, or are owned outright by the LL.
Through the trade bodies like ARLA, they should have some way of verifying this information.




If a LL with a mortgage misses a payment etc, maybe the banks should be allowed to 'repossess' the rental paid by the tenant/s.
ie. they would be able to order the letting agent to pay the monthly mortgage payment directly to the bank, out of the rent.
it would work the same way as garnishing someones wages.

this would be a first step, used before standard repossession proceedings.
it would stay in place until the LL had satisfied the bank with bringing any arrears up to date.
it would be allowed to run until the end of a tenancy, if the arrears have not been satisfied by that time, standard repossession would then take place.

they would have to inform the tenant that this is happening, so they dont assume they can just continue the tenancy at the end of the current contract, but at least the tenant has the security of knowing that they do actually have until the end of the tenancy.

could be a way of preventing tenants being evicted part-way through a contract, even though they had been paying their rent.
it would also prevent LL's renting out properties to new tenants when they are already in arrears, & simply not passing on the funds to the bank.




in addition
BTL mortgages should have a lower maximum LTV% than standard mortgages.
in the rental market, there needs to be a reduction of risk, together with landlords being more professional, & in for the longer term, not people looking for a short term profit.
something like an 80% max LTV% would mean that landlords with mortgages have to be serious about it, & it gives the banks a big enough risk margin to operate the suggestion above.



the banks also need to communicate between their own divisions/subsidiaries & other lenders a lot more:
if someone is having more than 1 BTL mortgage, they need to make them register as a company, & use commercial finance.
if someone has multiple properties they are letting out, they are then a business, & should be treated as such.




*personally, i would like to see all rental properties having to be registered & checked that they meet some standards with regards to safety, condition of property, efficiency etc*

roger196

edgex wrote: »

If the LL has a mortgage on the property, it should be a mortgage that allows them to let out the property.
Proof of this from the bank should be kept on file by the letting agent & landlord, in the same way as gas & electrical safety certificates should be.
This proof would then be available for viewing by current & prospective tenants.

Same would apply to buildings (& contents) insurance, & any other areas that require permission/notification to allow letting.

*

Most interesting. I hope you will submit your views, as the more people who respond the better. For details of how to submit see the consultation document issued by Department of Communities and Local Government called " Lender repossession of residential property: protection of tenants". Go to www.communities.gov.uk and look for consultation docs, or ring 020-7944-2240. Closing dates for submission is 14th October 2009.
Roger

roger196

silvercar wrote: »

I see what you are trying to achieve. You could make things a lot easier to enact by saying that all mortgage allow for the mortgagee to take tenants. That way the mortgagee is liable for the payments, whether by their own income of rental income. It would also give automatic security to tenants as ASTs would have to be acknowledged, subject to a max length. Anyone taking a mortgage would then have the right to move out and take tenants if their circumstances made it necessary. (job loss/ relocate etc). It would get ris of a quandry at present where someone knows they could afford to pay the mortgage by taking a tenant, but the lender won't allow it.

This does not protect the bank against the greater problems of repossesson where a tenant is in place. If the banks were unable to charge a premium rate of interest for BTL loans, there would be a substantial loss of profit which would need to be made up elsewhere. If o/o had to pay the BTL rate, would this be politically acceptable.

Don't know how you equate fake goods with living in a property.
The landlord has sold the tenant a fake AST. Is this much different to selling a car with outstanding HP without telling the purchaser.

Many thanks for the rest of your comments. I have deleted the paras "responsibilty of lender" (a bit off topic) and "privacy of post"(doubtful whether desirable, also whether necessary)

Roger

silvercar

roger196 wrote: »

This does not protect the bank against the greater problems of repossesson where a tenant is in place. If the banks were unable to charge a premium rate of interest for BTL loans, there would be a substantial loss of profit which would need to be made up elsewhere. If o/o had to pay the BTL rate, would this be politically acceptable.

I'm not worried about protecting banks. They can look after themselves, it is ordinary people that need protecting. Tenants protected from losing their homes, people forced to move for family or jobs and having an easy way of sorting their finances, but the banks choosing to be difficult.

In other countries you take a mortgage and you understand that you can do what you like with the property, live in it, let family live in it, let it etc as long as you understand that the bottom line is that you have to pay the mortgage.

In this country we make this massive issue of consent to let, greater risks for the banks etc when really all mortgage are loans for which the security is the property itself. BTL may mean that there could be tenants in situ but the risks aren't really greater. The skewed benefit system in this country means that anyone renting who loses their job will easily claim HB or LHA. Anyone with a mortgage that loses their job finds it much harder to claim help with mortgage payments.