Am I legally not allowed to work abroad because of my mortgage rules?!

silvercar

Lodger would, given LL is away out of country, become tenant on AST terms

Can you provide further info on this.

Does it mean that a lodger becomes a tenant if resident landlord takes a two week holiday abroad? or a month? Is there a minimum length of time? Seems odd to me, if a resident landlord keeps a room in the property and goes travelling quite a bit, UK or abroad, I don't see that it creates an AST situation.

G_M

silvercar wrote: »

Can you provide further info on this.

Does it mean that a lodger becomes a tenant if resident landlord takes a two week holiday abroad? or a month? Is there a minimum length of time? Seems odd to me, if a resident landlord keeps a room in the property and goes travelling quite a bit, UK or abroad, I don't see that it creates an AST situation.

No, there's no minimum length. That's the difficulty.

There is no clear definition of whether the property is the owners main residence/whether he is a resident LL.

Since there is no clear definition, the risk is that the tenant claims it (or the insurer when a claim is submitted) and only a court could decide. So the LL is leaving himself open to an unpredictable legal position.

Many factors might be taken into account by a court: how long was the LL abroad? How often? How many days per month/year are spent in the house? What was the LL doing aborad? Working? Full time job? Accomodation provided by employer? Or rented by LL? On what terms (eg 1 year tenancy in.. whereevr)? LL's tax status? etc etc

silvercar

theartfullodger wrote: »

2 week holiday no, moving abroad for, say, 1 year leaving T/Lodger in sole occupancy would I understand. Not sure the "rules", probably comes down (as most things do..) to the Judge.

Probably Street vs Mountford 1985 would be a good start

£5 to your nominated charity if I'm wrong !

Street vs Mountford seems to talk of the difference between exclusivity and permission to occupy, suggesting that if the resident landlord kept a right to access and occupied (as in possessions) there would be no exclusivity??

G_M

Not that simple. A judge could find that the 'right to access' the LL built into the contract, and/or any possessions left there, were not enough disprove exclusivity and were in fact merely token attempts to do so.

Judge would look at the whole picture ie the reality of the situation. (see my post above).

Otherwise ALL landlords would leave a sleeping bag in the cupboard under the stairs, stick a clause in their contract about the LL retaining right of access, turn up once a year for an overnight, and classify ALL tenants as lodgers, thereby removing their rights.

Judges would make mincemeat of such an arguement.

costelloe16

Hi everyone,

Thanks for all these suggestions, I'm more interested in doing something safe, I'm not wanting to take any risks so the family member acting as a lodger would be the best idea for me I think, and changing my insurance accordingly.

If I have 18k as an unsecured loan, and 106k as a mortgage, and I need to reduce my mortgage to 75%, does the 18k count towards the 25% at all?

Emmzi

For the 75% thing
a) get a valuation of the house by a valuer/surveyor and
b) ensure your mortgage is 75% or less of the valuation.

So if your house was valued at £100k your ortgage would need to be £75k or less - so you would need to pay off £106 - 75k = 31k

If the loan is unsecured it doesn't come into the equation.

poppysarah

Emmzi wrote: »

If the loan is unsecured it doesn't come into the equation.

Apart from of course having to be paid back.

costelloe16

Sorry I just want to make sure I'm understanding this!

When we first bought the house it cost 123k, we got 110k mortgage, 20k unsecured loan. So 110k works out at roughly 89% of 123k.

Since then we've paid off 4k off our mortgage and 2k of the loan, meaning our mortgage is now 106k. Presuming that our house has worked its way back to original value of 123k, then 106k is 86%. And we'd therefore need to find 9% to get to the 75% area- roughly 11k.

Is that how it's worked out? I.e ignoring the loan as though it was just a separate amount of money we owe elsewhere?

N79

theartfullodger wrote: »

2 week holiday no, moving abroad for, say, 1 year leaving T/Lodger in sole occupancy would I understand. Not sure the "rules", probably comes down (as most things do..) to the Judge.

Probably Street vs Mountford 1985 would be a good start

£5 to your nominated charity if I'm wrong !

For reference, the "rules" are contained in Parts I and III of Schedule 1 of the Housing Act 1988 - this section is helpfully titled Provisions for Determining Application of Paragraph 10 (Resident Landlords).

The main rule is (my bolding)

"that, subject to Part III of this Schedule, at all times since the tenancy was granted the interest of the landlord under the tenancy has belonged to an individual who, at the time he owned that interest, occupied as his only or principal home another dwelling-house which,—

(i)in the case mentioned in paragraph (a) above, also formed part of the flat; or

(ii)in any other case, also formed part of the building; and"

So the LL must remain living in the property as their only or principle home. A bit difficult if they are always abroad.

There are a few exceptions in Part III such as, in particular, absences of less than 28 days are always discounted (to allow for temporarily living in another house).

It then lists lots of situations where a lodger remains a lodger (eg on the death of the LL, when the property is held in trust etc).

silvercar

So the LL must remain living in the property as their only or principle home. A bit difficult if they are always abroad.

There are a few exceptions in Part III such as, in particular, absences of less than 28 days are always discounted (to allow for temporarily living in another house).

Bit hard on those that own a holiday home overseas, who as they get older intend spending winter months in the warmth.