How Can The Bank Find Out I Don't Have Consent to Let?

zappahey

Someone I know <ahem> simply returned all mail addressed to the landlord with the result that the landlord's mortgage interest rate went up by 2 percentage points. Don't forget that the tenant doesn't owe you any favours in your little scheme.

Henman_Bill

To clarify when I stated: "If it goes up it is likely it will go up steadily rather than suddenly increase from 1% or less to 6% on one day so there will be time to react here." When I said it I was thinking about the Bank of England base rate. However I wasn't clear about that at all, so sorry about that.

Yes, a bank can change its rate more quickly, and such a rate change may well occur as well if the bank moves me to a Buy to Let mortgage as well. I doubt my bank will do a Bank of Ireland on me though but you never know - who knows?

But as I have stated before, this would not scupper me in the slightest. It would likely make me think the minimal long term profit is no longer worth the hassle, and put the house up for sale, but I certainly wouldn't be broke or struggling for funds for repairs or to cover periods of no rent being received.

neverdespairgirl

I'm sure there are lots of shysters out there in the lettings agency business who wouldn't mind.

But most decent agents (and there are some) would mind.

For example, I know 4 people who were recently renting a flat, and there was a half hour delay on moving in day, because the gas engineer hadn't dropped the copy of the gas safety certificate off at the right office. Without that certificate in hand, the agents wouldn't allow the new tenants to cross the threshold. They similar supplied (without being asked) confirmation that there was a LL's insurance policy, and various other relevant things.

Hermoine

Back in 2008 I was living in a regional city, and got offered a job in London, which I needed to take - I was unemployed at the time.
I put my house on the market and went flat-hunting in London. A few months later the markets crashed and it was suddenly rather difficult to sell property. I couldn't afford a mortgage and London rent, so I chose to rent out my house. I faced exactly the same dilemma that you did - whether to tell the bank/building society or not. And I chose not to. If they had put me on a buy to let mortgage, I simply couldn't have afforded it - I wouldn't have been able to charge a high enough rent in that particular market to cover all my costs, since I had quite a high mortgage to begin with, and I knew I needed to use a managing agent to look after the property since I was in another city.
I used a reputable lettings agent, who I also used to manage the property. Repairs were dealt with quickly and effectively, and I complied with all the necessary regulations re gas safety certificates etc. The lettings agent I used didn't ask how I was managing the mortgage - but I suspect they knew. I declared my income, less allowable costs to HMRC.
I did this for about 2 years, until the markets improved, and then I gave my tenants notice and sold the house, and bought a flat in London.
Did I consider what I did unethical? No. Not in the circumstances I was in, which were partly caused by the actions of the banks in the first place. The only alternatives would have been to sell the house at such a price that I wouldn't have been able to purchase anywhere to live in London, or to give up the job in London and remain unemployed in the city I'd been living in.

As a result, I don't feel its fair to criticise the poster as "corrupt", and I am surprised that no-one else has admitted to being in a similar situation, or at least knowing someone else who is. I'm fairly sure there are other people out there who are in
difficult living situations due to circumstances outside our control, and often driven by the need to keep working.

darcyboo

I don't know how the mortgage companies find out, but they do! I spent some time doing voluntary work abroad in 2011 and decided to rent my property out for 12 months. Called the lender to check the consent to let process and was advised I'd have to pay an admin fee and an extra 1% interest, and so decided to go ahead without consent. Agent didn't ask for proof of consent so no issues there, and everything was fine with the tenants.

However, 15 months later, so after I'd actually moved back into the property, a letter arrived from the lender along the lines of them having reason to believe the property was being let without consent, and requesting proof that I was still living there. Thankfully, like I say I'd moved back in by that point and so was able to send them the utility bills and bank statements they wanted.

I felt terrible about the decision all along, and wouldn't do it again. But basically what I'm saying is that they can and do find out, and sometimes it's not so far down the line... Think it through carefully.

jamie11

@OP, now that you've dug your hole deep enough maybe you should lie in it and cover yourself up.

What you're proposing is stupid, no more, no less.

By the way, unless you hire an agent that is ALSO a solicitor then he cannot represent you in case you need to evict. Remember the contract is always between you and the tenant only.

Henman_Bill

I want to put an update to this thread from March and April to add something. I know it's a long time ago and people might not be following the thread anymore, and some people don't like comments on old threads, but I personally think they are very useful for when people find these threads through searches, to have the complete info here.

Basically I have gotten round to calling 6 companies that provide landlords insurance (I called Nationwide, UIA Insurance, Simply Business, Alan Boswell, Peacock and NFU Mutual).

5 of these 6 companies said that consent to let was an issue between me and the bank, that it didn't matter to them, that I could still get covered, and that claims would NOT be invalidated or affected. And 1 (NFU Mutual) said that they would not insure me without consent to let.

If anyone is in a similar situation don't take my word for it on the above companies. When you call a call centre a person can make a mistake; 2 people in the same call centre can say different things. Policies can change. So if you were going to insure a property without consent to let with one of the above companies I would repeat the call, record the call, ask them to check with their underwriter and maybe ask them to put it in writing.

grifferz

Henman_Bill wrote: »

I want to put an update to this thread from March and April to add something. I know it's a long time ago and people might not be following the thread anymore, and some people don't like comments on old threads, but I personally think they are very useful for when people find these threads through searches, to have the complete info here.

Thanks, it's always interesting to know how things work out for people, and what route they decide to take.

Henman_Bill

An update to the thread from last year. We eventually put the property on the market in December, left the country in January, and got our first tenant in February.

I had anticipated insurance being the biggest sticking point, but as I explained above, it wasn't as bad as I thought. However one thing that did become more of an issue than I first thought it would be, and did make us reconsider the whole plan more than anything, was the letting agent issue, as mentioned above by Franklee, and perhaps others.

I had a meeting with an agent, had a personal reccomendation of the agent from an acquaintance, liked them, and they became my first choice. I asked for a sample contract, but it said "If the premises are subject to a mortgage, you will need your mortgagee's written consent to the proposed letting. By signing this agreement you confirm that you have consent to grant a Tenancy". I wouldn't sign to a lie, so I called and explained that I didn't have the consent and asked them to remove the second sentence but leave the first. Eventually they decided not to, so I had to choose another agent. The sad thing is, I am pretty sure they wouldn't have cared had I signed it and lied. But they were not going to modify the contract.

My second choice agent, Belvoir, went even a step further, asking me to provide the written consent. Again I explained and try to negotiate, but of course, no chance. So in the end the first bad thing was I had to discard the only 2 agents that had a high number of properties in the town and the only 2 I had a personal reccomendation for and that seemed the best. And secondly I had kind of wasted their time. So, after that, in an effort not to waste each other's time, I started mentioning it up front, but this wasn't great either, as people would then turn me away even though they might have had nothing in the contract and had not cared had I not mentioned it. It's more a case that the companies want to be seen as reputable in my view than that they actually think this is bad. Some of them turned me away told me it goes on all the time, and clearly had no problem with it, and seemed to think me rather honest and naive for mentioning it at all.

Eventually I realised that the best thing to do was not to mention it up front but to send an email enquiry or short phone call stating an interest and asking for a sample contract by email, after which I would arrange a meeting. In case the contract mentioned consent to let, I didn't waste their time with the meeting. A bit odd to ask to see contract up front before meeting anyone but overall this worked best.

Because of all this, instead of just contacting 3 agents and choosing 1, I ended up having to contact about 10, and most of them I either didn't like or they needed consent, and it took longer. The one I eventually found knows what I'm doing, and they are OK with it. I certainly didn't have to settle for the lowest cowboy agent at all, I suspect they are kind of in the middle quality wise, eg sometimes have to send a reminder after a week, for something I would have hoped that they could have done in 24-48 hours after my request.