Consent to let

Mortgagedude

Hi,
I am a new landlord with a tenant coming in next week through a letting agent. I do not have consent to let as my mortage company wouldn't grant it and they do not do buy to let mortgages.

What they have said is that they won't be cancelling my agreement or expecting me to pay off the mortgage. Instead they will charge me an ongoing unauthorised letting fee of 2%.

My question is what are the implications for this? To my mind everything is out in the open although its not consent to let as such.

Will it invalidate landlords insurance I take out etc?



"Judge not lest ye be judged"

G_M

No, your insurance should be OK.

I don't really understand what they are saying though.

They are refusing you Consent to Let, but charging you to.... let!

Major problem then is for your tenant if you default and they repossess. If the mortgage lender has not granted Consent they do not have to take over the tenancy, they can evict the tenant.

However if the tenant knew of their fee etc I'd have thought they could argue (in a possession hearing) that Consent WAS granted.

I assume you've done everything else?

franklee

With insurance they are happy to take your payments but when it comes to a claim they may look at how to wriggle out of it. To be sure why not ask the insurer? Normally you have to declare all material facts, if you think consent to let isn't an insurance issue then no harm done in asking. OTOH if it is an issue better know.

ARLA seem to imply it may matter if you look under the buildings insurance section here:

http://www.arla.co.uk/information/insurance/buildings-insurance/

"Consent. It is essential that you advise and obtain consent to let your property from your mortgage lender, existing insurer and head lessee (for leasehold properties). Failure to obtain written consent from these parties may render your insurance void in the event of a claim. Sadly there have been many instances where buildings claims have been totally rejected because the insurer and or mortgage lender was not advised the property was let.

It says or mortgage lender.

theartfullodger

Mortgagedude wrote: »

Hi,
I.............



"Judge not lest ye be judged"

Well, if the mortgage industry has any sense you'll not find it at all easy, indeed possibly impossible, to get another mortgage in future,.. That's a judgement btw..

What goes around comes around: You've signed a contract (mortgage..) and now say you plan to break the terms.. So it'll be OK for your tenants to break the terms of their tenancy agreement then yeah??

And if the point about ARLA's advice on getting consent2let is correct you could end up very bankrupt if the place burns down...

Cheers!

Mortgagedude

Yes thanks I'm a bad, bad man aren't I. I've just slapped myself across the face for you... cheers!

I'm making people aware of the situation at the moment and taking advice.

The point about mortgage blacklisting is a consideration I hadn't thought of, I am waiting to read the letter which the mortgage company has said they will send me (detailing the charges and discouraging me I think) before I do anything.

The reason I have asked about insurance is that I don't want to disadvantage the tenant, merely to get the best deal.

theartfullodger

'spose the "idea" of re-mortgaging on a new B2L mortgage, probably bunging in some more money due to LTV guidelines, has been considered and is being pursued??

A bit of a radical idea I grant, sticking to the rules....

Thrugelmir

Mortgagedude wrote: »

The reason I have asked about insurance is that I don't want to disadvantage the tenant, merely to get the best deal.

Your the one taking the risk. As if the property burns down you've still got the mortgage and potentially no way of rebuilding it. So only have a building plot to sell.

brit1234

Simple change lender and get a buy to let mortgage.

I hope all these people renting their properties on residential mortgages get prosecuted!!!:mad:

Mortgagedude

Ah, bless.

nollag2006

Might be easiest just to ring your insurer or broker, and ask them the question directly.

If you have landlords insurance, rather than the simple domestic residential coverage, there shouldnt be a problem.

But it is well worth calling them and asking them the direct question "Does the absence of CTL invalidate my insurance?". You don't need to give your name or details

If it does invalidate your insurance, swap to another who permits it.

theartfullodger

Given your apparent lack of knowledge & your attitude (ah bless ...) I'd suggest you need a couple of courses - on how to be a Landlord, how to communicate and behave to get the results that suit you best or a course of prescriptions from your Doctor.

Seriously, think about it. If you get this Lettings game wrong it can be REALLY expensive.

Cheers!