Section 21 - is it essential?

secondtoughest

Hello

I am renting out my property after receiving consent to let from my lender. They then asked me find an authorised letting agent, and the tenants moved in 01.07.13.

The mortgage company require a Section 21 to be included with the tenancy. They say this is if I stop paying my mortgage then they can remove the tenants. The letting agents say they don't usually issue a Section 21 with the tenancy as it means they are giving the tenants notice to leave.

The letting agents say they will issue one if required, as otherwise my mortgage company will treat the let as unauthorised and penalise me.

Could anyone explain what a section 21 is exactly and why the mortgage company want it but the letting agent wouldn't normally use it? Will it unsettle the tenants to recieve one? I have my tenancy agreement to hand if more info is required.

Thanks for your advice

G_M

What a load of ******!

A S21 is the essential 1st step if a landlord wishes to remove a tenant.

* If issued before, or at same time as, the tenancy agreement, it is invalid

* if issued before any security deposit paid by the tenant has been registered, it is invalid

So the agent appears to be proposing to issue an invalid S21

Furthermore, the reasons given "otherwise my mortgage company will treat the let as unauthorised and penalise me." is rubbish. Unless,ofcourse, your lender has made it a conditionof theirconsent. Have they? YOU should know that better than the agent!

My advice? Sack you agent and find one who knows what they are doing or you will have nothing but problems in the future.

Failing that, give clear, written instructions to the agent eg

* do not issue a S21 till I instruct you to
* Take a security deposit (of £X) from the tenant before handing over the key
* Register that deposit with XYZ scheme within 30 days, and issue the tenant with the Prescribed Information'.
* Send me copies at the same time.
* etc

Sorry, but if you do not spell out your instructions you will be at the mercy of their incompetance and ignorance.

Also, get up to spead yourself on being a LL so you can keep a check on your agent in future. Read:

New Landlords (information for new or prospective landlords)

thesaint

A Sec 21 is the first part in the process of a landlord getting his property back.
The Sec 21 may leave a tenant nervous of staying at a property.
They may decide to look for alternative accomodation due to it.

A Sec 21 will be invaildated by another fixed term offered afterwards.
So what I would do is to get the agents to serve a Sec 21, and then forward that onto the mortgage company.

If the tenants are uneasy, sign another tenancy agreement that covers the rest of the original fixed term.

G_M wrote: »

What a load of ******!

A S21 is the essential 1st step if a landlord wishes to remove a tenant.

* If issued before, or at same time as, the tenancy agreement, it is invalid

* if issued before any security deposit paid by the tenant has been registered, it is invalid

So the agent appears to be proposing to issue an invalid S21

Furthermore, the reasons given "otherwise my mortgage company will treat the let as unauthorised and penalise me." is rubbish.

My advice? Sack you agent and find one who knows what they are doing or you will have nothing but problems in the future.

Also, get uptospead yourself on being a LL so you can keep a check on your agent in future. Read:

New Landlords (information for new or prospective landlords)

I don't see what the agents have suggested that leads you to any of your conclusions.

secondtoughest

The lender has made it a condition of their consent. The letting agent wrote back to the lender saying they don't usually issue one and my mortgage company are saying it's essential. Therefore my letting agent and myself are trying to find the best solution without 1. upsetting the lender and 2. upsetting the tenants.

Why is it so essential to the lender? If necessary of course I'll do it, I'm just trying to work out the best approach.

cte1111

secondtoughest wrote: »

The lender has made it a condition of their consent. The letting agent wrote back to the lender saying they don't usually issue one and my mortgage company are saying it's essential. Therefore my letting agent and myself are trying to find the best solution without 1. upsetting the lender and 2. upsetting the tenants.

Why is it so essential to the lender? If necessary of course I'll do it, I'm just trying to work out the best approach.

I guess the lender erroneously thinks that issuing a section 21 with make it easier to reclaim the house if the tenants do not keep up with the rent. As other posters have said, they are incorrect in their assumption.

The question is, what can you do about it? I would ask the mortgage company why they are asking for something that is legally invalid.

G_M

thesaint wrote: »

I don't see what the agents have suggested that leads you to any of your conclusions.

Apologies: I had mis-read 'mortgage company' as 'letting agent'. Skim-reading!

The mortgage company require a Section 21 to be included with the tenancy.

A S21 'included with the tenancy' would be invalid, hence my conclusion.

I had thought it was the agent suggesting this- and the agent should know better.If the mortgage company is requiring it, I assume they are being loose in their wording and actually want a S21 issued in an appropriate time-frame (ie after deposit registration).

RAS

secondtoughest wrote: »

The lender has made it a condition of their consent. The letting agent wrote back to the lender saying they don't usually issue one and my mortgage company are saying it's essential. Therefore my letting agent and myself are trying to find the best solution without 1. upsetting the lender and 2. upsetting the tenants.

Why is it so essential to the lender? If necessary of course I'll do it, I'm just trying to work out the best approach.

WRITE to your mortgage provider asking them why they are giving you advice that would invalidate the S21 notice, preferably to their Chief Executive.

Quote G_M as his advice is correct (England and Wales anyway)

A S21 is the essential 1st step if a landlord wishes to remove a tenant.

* If issued before, or at same time as, the tenancy agreement, it is invalid

* if issued before any security deposit paid by the tenant has been registered, it is invalid

So the mortgage provider appears to be proposing that you issue an invalid S21

[Deleted User]

I wonder if the bank is as clear on tenancy law as GM thought the Letting Agency was (i.e. they don't have a clue).

angrypirate

RAS wrote: »

WRITE to your mortgage provider asking them why they are giving you advice that would invalidate the S21 notice, preferably to their Chief Executive.

Quote G_M as his advice is correct (England and Wales anyway)

I agree - I would complain about this. Your mortgage company are telling you a load of porkies and should know better.

thesaint

secondtoughest wrote: »

The lender has made it a condition of their consent. The letting agent wrote back to the lender saying they don't usually issue one and my mortgage company are saying it's essential. Therefore my letting agent and myself are trying to find the best solution without 1. upsetting the lender and 2. upsetting the tenants.

Why is it so essential to the lender? If necessary of course I'll do it, I'm just trying to work out the best approach.

As stated earlier, what I would do is to issue a valid Sec 21, then render it null and void by giving the tenant a new fixed term.

Scenario:

Tenancy starts 1st July 2013 - 6 month fixed term.
Sec 21 issued July 23rd to expire after 31st Jan 2014
Tenants come in on 1st Aug 2013 - 5 month fixed term.

Job done.

theartfullodger

secondtoughest wrote: »

...
The mortgage company require a Section 21 to be included with the tenancy. They say this is if I stop paying my mortgage then they can remove the tenants. The letting agents say they don't usually issue a Section 21 with the tenancy as it means they are giving the tenants notice to leave.

...

The Mortgage company (if this genuinely is their request & not some garbled message from a k**b-head broker...) don't appear to understand the law as others have said - but so what!

Just do as they ask, explain to tenant it will be invalid, no problems all round...

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