BTL or lease without the banks knowlege?

seven-day-weekend

The point I was making is that being a tenant on a secured shorthold tenancy is never a secure option, whether the landlord has a CTL or not. You can be out at two month's notice for any reason, or none, from the Landlord or from the mortgagee if the LL stops paying. So I can't see how having a CTL makes anything more secure for the tenant.

There are other reasons to have a CTL, but tenant security is not one of them, imho.

PayDay

franklee wrote: »

I also noticed a paragraph on that shelter page I lined to before:

http://england.shelter.org.uk/get_advice/repossession/repossession_by_a_landlords_lender

"Can people with mortgages legally grant a tenancy?

Yes, but only if their mortgage deed says it is allowed and/or they have their lender's permission. Most mortgage agreements do not allow tenancies to be granted without permission, and many lenders will try to repossess the property if they find out that this has happened."

Really what we need is some legislation to protect tenants as was promised, but just got as far as consultation. This at a time when the government has tried to help home owners stay in their homes, but tenants are still left with no protection if the landlord hasn't got consent to let :mad:

Legislation will come, albeit too late for some tenants. Watch for some of the European laws being instigated here too, such as a minimum 3 year tenancy and rent reductions for landlord failings.

It won't bother me but will scare some landlords and letting agents.

seven-day-weekend

The only thing is about such laws as a minimum three year tenancy, is that it will make for less rented houses available, as many Landlords will not want to be tied in for three years. Many tenants will not want that long either!

It will be OK and give more security for the tenant, as long as there is flexibility so that the landlord can evict under certain circumstances.

franklee

seven-day-weekend wrote: »

The point I was making is that being a tenant on a secured shorthold tenancy is never a secure option, whether the landlord has a CTL or not. You can be out at two month's notice for any reason, or none, from the Landlord or from the mortgagee if the LL stops paying. So I can't see how having a CTL makes anything more secure for the tenant.

There are other reasons to have a CTL, but tenant security is not one of them, imho.

No one here is complaining about getting two months notice, that's fine and what a tenant on an AST expects. I cannot understand why the landlords here don't see that a tenant knowing they will get two months notice fair and square is far better than maybe weeks of uncertainty (if the tenant knows anything at all) and then a few days if that to move even in the middle of a fixed term

Without consent the let the tenancy isn't binding of the landlord's lender and so the tenant isn't entitled to any notice and it's unlikely the lender will let the tenant know what's going on. There are many examples of this on the forum with tenants getting just a few days confirmation to leave.

With consent to let the tenancy is binding of the landlord's lender and so the tenant will get notice per the tenancy agreement, typically two months notice.

Details are clearly set out by shelter here as I've already linked to twice before in this thread alone:

http://england.shelter.org.uk/get_advice/repossession/repossession_by_a_landlords_lender

"Can people with mortgages legally grant a tenancy?

Yes, but only if their mortgage deed says it is allowed and/or they have their lender's permission. Most mortgage agreements do not allow tenancies to be granted without permission, and many lenders will try to repossess the property if they find out that this has happened.

What about buy-to-let mortgages?

If your landlord bought the property through a buy-to-let mortgage, you will normally be in a stronger position than if your landlord's lender did not know that the property was rented out. This is because your tenancy has effectively been formally recognised by the landlord's lender, which means that it is binding on them (see below).

If the lender gets a court order to repossess the property, they would normally have to give you proper notice if they want you to leave. The amount of notice you are entitled to will depend on the type of tenancy you have.

What notice am I entitled to?

Lenders are often unaware that a property has been rented out to tenants, so it is common for legal proceedings to be started (eg for mortgage arrears) without the tenants even being aware that there is a problem.

Since April 2009, lenders are required to send a letter to the property addressed to 'the ocupiers', informing everyone who is living at the property of the date of court hearing. They have to do this within five days of the hearing date being confirmed by the court. You should therefore always open post addressed to 'the occupiers' - do not assume that it is junk mail!

After this, the only notice that you will be given is if the court agrees to give the lender possession. If this happens, the court will send a notice to the landlord and 'any other occupiers', informing them of the date that the bailiffs will be coming to repossess the property. This notice (form N54) may only give a few days' notice of an eviction, so get advice immediately if you receive one.

What happens if the lender gets a possession order?

Most tenants have no right to remain in their home once the mortgage lender has been given a possession order by the courts. From this point onwards, anyone living in the property is an 'unlawful occupant' and can be evicted by the bailiffs. No separate court hearing needs to be held, but you should still receive written notice (see above).

There are exceptions, however, you may have the right to stay on as the tenant of the lender if your tenancy is binding on them. See below for more information.

Is my tenancy binding on the landlord's lender?

In some circumstances, your tenancy may be binding on the landlord's lender. This means the lender will become your landlord after the repossession and will need a separate court order to evict you. Most tenancies are not binding on the lender, but there are exceptions. You may have a binding tenancy if:

* Your landlord had a buy-to-let mortgage (see above).
* The lender gave permission for the landlord to grant the tenancy.
* You were already living in the property at the time the mortgage was granted (eg as a sitting tenant or when the landlord took out a second mortgage). If you are unsure about when the landlord's mortgage started, ask your landlord, or get advice to find out whether the tenancy is binding. An adviser may be able to confirm this via the court, the lender, and/or by checking the Land Registry.
* The landlord's lender has recognised the tenancy in some way (eg by asking you to pay rent direct to them or by accepting rent from you) "

I don't think it could be any clearer

seven-day-weekend

Right, I understand now. If the lender does not realise that there are tenents in and the landlord defaults on the mortgage, then re-possession will start without the lender being aware of the tenants and the tenants being in the dark, until maybe a few days before the house is actually re-possessed.

With a consent to let, then if re-possession happens, the lenders will be aware of the tenancy and give the required notice.

Is that it?

franklee

clutton wrote: »

a lot of hysteria gets whipped up on MSE about this particular issue on a regular basis... its not that long ago that folks were being asked for £5k+ to get consent to let from the likes of Halifax - sheer greed - so i personally can well understand why some LLs dont get consent....

but as 7-day-w-e says, if a L stops paying the mortgage the tenant is out anyway - (consent or no consent) and its up to the Courts as to how much notice they get... and that is a piece of string answer....

I'd much prefer a guaranteed two months that consent to let gives than a piece of string. As we have seen from examples here even if the tenant knows a repossession may happen the lender refuses to talk to them so the tenant can do little but wait for the court hearing to see if possession is granted and then only have a few days to move. Some tenants like those on a periodic tenancy can just give their own notice and leave but tenants in the fixed term cannot do that as if the repossession is staved off at the last the tenant will still owe rent till the end of the fixed term.

franklee

seven-day-weekend wrote: »

Right, I understand now. If the lender does not realise that there are tenents in and the landlord defaults on the mortgage, then re-possession will start without the lender being aware of the tenants and the tenants being in the dark, until maybe a few days before the house is actually re-possessed.

With a consent to let, then if re-possession happens, the lenders will be aware of the tenancy and give the required notice.

Is that it?

Yes that's it Without consent to let the tenancy isn't legally binding on the lender so they can just ignore the tenant's rights under the AST even once they know the tenant is there.

clutton_2

"many lenders will try to repossess the property if they find out that this has happened."

this is so naive on Shelters part - lenders will never repossess a property as long as their mortgage is paid... that is ALL they care about... if they do find out there has been unauthorised lettings - they are much more likely to increase the Mortgage Interest Rate to the highset they can possibly get away with, so that they get "more of the action"


i agree that CTL should, in a ideal world, be sought, but

""If the lender does not realise that there are tenents in and the landlord defaults on the mortgage, then re-possession will start without the lender being aware of the tenants and the tenants being in the dark, until maybe a few days before the house is actually re-possessed."

this used to be universally true... but since the "credit crunch" one thing that some lenders are doing to "appear" more philanthropic is to send letters to The Occupier if possession proceedings are started so that tenants do get informed.

Tenants then have the opportunity to go to court to plead their case... a judge will not throw a family out on the street un-necessarily - s/he will encourage the formulation of a payment plan, and could grant more time, s/he may delay the possession date if the tenant can produce a signed AST on another property for a future date... I have seen this done several times... All these tactics could end up giving the repoed tenant more than the customary two months given statuarily.

The fact that folks rent, (and i am a tenant as well as a LL) inherently gives them less security than home-owners by definition.

MissMoneypenny

clutton wrote: »

this used to be universally true... but since the "credit crunch" one thing that some lenders are doing to "appear" more philanthropic is to send letters to The Occupier if possession proceedings are started so that tenants do get informed.

Tenants then have the opportunity to go to court to plead their case... a judge will not throw a family out on the street un-necessarily - s/he will encourage the formulation of a payment plan, and could grant more time, s/he may delay the possession date if the tenant can produce a signed AST on another property for a future date... I have seen this done several times...

You have also seen many cases on these threads where tenants have not had a chance to go to court and "plead their case".

You have also seen threads where tenants have a fixed rental contract on a house, only to find that the contract it isn't honoured in it's fixed term by the mortgage company, as they never gave the borrower Consent to Let.

Do you check that landlords have Consent to Let when you rent houses out? Do you check the landlord hasn't had a reposession order served on the property before you rent it out? Or do you just let the tenant and their family, take the gamble that a landlord is not behind with his mortgage payments?

clutton_2

Moneypenny says ""Do you check that landlords have Consent to Let when you rent houses out? Do you check the landlord hasn't had a reposession order served on the property before you rent it out?"

as you know i am both a LL and a tenant (from a year ago). When i chose to become a tenant i did not ask any of the prospective landlords if they have permission to let -

Why ? - i work on the basis that bad landlords are such a small minority of total landlords that i choose to trust individual people i associate with...

i dont choose to go through life believing that everyone i meet is out to shaft me....

Yes there are bad landlords, accountants, butchers - thats how our society has become...