My Rental Income

Werdnal

As you appear to have missed some other essentials, do you understand deposit protection laws and if your tenant paid a deposit, have you fully complied?

duckandcover1

G_M wrote: »

Goodadvice above.

1) Mortgage lender. Establish if they are likely to grant CTL if asked. Somelenders never do, some usually do, andsome fall in between. Which is your lender? If CTL is likely I would come clean and ask. If you know they'll say no, start shoppig around for a BTL mortgage, and switch

2) Complete a paper tax retun by Oct 1st to cover rent earned from April 2012 - April 2013. You are within the required timeframe,so noproblem. Learn about tax deductable expenses etc. (see link below)

3) Read your lease!

Now read the post below, and ALL thelinks within it!

Mortgage lender is santander

I will read my lease, will it be within my Home Information Pack? I have never seen it although admittedly never really looked. It has also recently been sold on by the house builder to a third party, unsure if this changes anything

duckandcover1

Werdnal wrote: »

As you appear to have missed some other essentials, do you understand deposit protection laws and if your tenant paid a deposit, have you fully complied?

I think that I may fall foul of this also, as when I rented the house the deposit was collected by the estate agents. This was when I intended to have them manage the property. All that changed when I had real issues with them conducting an inventory and being very difficult to deal with, the tenant even said the same and was made up when I took over managing the house.

Now, given this, I think it is highly unlikely that they have filed the deposit away and have probably paid the deposit to me, I haven't seen it so will have to check past bank statements.

Lets say I haven't complied, what can I do to resolve this?

somethingcorporate

You should ask your lender.

By breaching the terms of your contract they could theoretically call in your whole mortgage debt immediately (however, they likelihood of this happening is very low).

Still, do you want your tenant to know you are a rookie landlord that doesn't care enough to do any research prior to starting up this business (which it is!). The consequences of getting it wrong can be horrific - lack of gas safety can lead to criminal prosecution and huge fines.

Edit: cross posted - you can protect their deposit now. Failure to do so means they can sue you for a multiple of that deposit.

LLs like you give professional ones that take their responsibilities seriously a bad name. You've shown your mortgage company (who lent you a substantial amount of money) and your tenant absolutely no respect. Get your house in order, literally, before it has serious consequences for you.

duckandcover1

somethingcorporate wrote: »

You should ask your lender.

By breaching the terms of your contract they could theoretically call in your whole mortgage debt immediately (however, they likelihood of this happening is very low).

Still, do you want your tenant to know you are a rookie landlord that doesn't care enough to do any research prior to starting up this business (which it is!). The consequences of getting it wrong can be horrific - lack of gas safety can lead to criminal prosecution and huge fines.

Edit: cross posted - you can protect their deposit now. Failure to do so means they can sue you for a multiple of that deposit.

LLs like you give professional ones that take their responsibilities seriously a bad name. You've shown your mortgage company (who lent you a substantial amount of money) and your tenant absolutely no respect. Get your house in order, literally, before it has serious consequences for you.

I agree, I am giving landlords a bad name, but I am here now trying to sort everything out so that I can be a good landlord, and I will be a good landlord.

I will raise the issue with my lender, but as a way of testing the water. I am due to remortgage soon so will look at buy to let as well.

I am worried about asking my lender about CTL because I can not afford to have the house empty, I would like to keep it as I plan to move back in some time in the next few years.

Does anyone have any experience of CTL with Santander?

Werdnal

somethingcorporate wrote: »

Edit: cross posted - you can protect their deposit now. Failure to do so means they can sue you for a multiple of that deposit.

No, late protection is not an option.

If the deposit was paid by the tenant more than 30 days ago (as in this case) you cannot protect it now.

OP you can return the deposit in full to the tenant, getting a written receipt signed as proof you have done so. However, this will not prevent the tenant suing you for the suggested penalty of 1-3x the deposit value, but showing willingness to return it, you will mitigage the penalty to a lesser amount.

Are you sure the agents did not protect it for you initially? If they did so, you may be in the clear here.

G_M

duckandcover1 wrote: »

Kynthia,

Thanks for your reply. I respect your opinion and as it doesn't seem to be illegal, I would rather not tell the mortgage providers given that I have a very good tenant, who wants to stay in the property until he retires and then may not be able to afford it, and also he has asked to do some work on the garden to improve it and also to paint the walls if the paint starts looking tired.

1) If your tenant wants to make improvements like this
a) get it clear what they intend to do exactly, then give them written permission & keep copy. It avoids future misunderstandings to have it in black & white
b) consider giving him a (new) long term fixed term tenancy. Security is only fair if the tenant is going to spend money on your property. (remember any tenancy over 3 years must be signed as a Deed - this does not apply to monthly periodic tenancies [rolling], but they are very insecure).

I will read my lease, will it be within my Home Information Pack? I have never seen it although admittedly never really looked. It has also recently been sold on by the house builder to a third party, unsure if this changes anything

How do I know where it will be!? It will be wherever YOU put it! Presumably with all the other conveyancing documents when you bought.

No. The lease is fixed for how ever long it lasts (99 years? 999 years?). The freehold may have been sold on, but not the lease; YOU own the lease (I assume!)

...when I rented the house the deposit was collected by the estate agents. ......I think it is highly unlikely that they have filed the deposit away and have probably paid the deposit to me, ...

Lets say I haven't complied, what can I do to resolve this

?
You MUST establish where the deposit is. Registration is a legal requirement, with a penalty.
* check each of the 5 schemes yourself (see links below)
* speak to your agent or go through your written records of the time

If a deposit was taken, and not registered, return it to the tenant in full.
* even if you return it, you are in breach, but the penalty will be the low end of "up to 3 times the deposit", rather than the full 3 times.
* unless you return it, you cannot use a S21 Notice to evict. I know you have a good tenant, but the future is uncertain. Don't close doors on yourself.

More details in:

New Landlords (general information for new or prospective landlords)

Thrugelmir

duckandcover1 wrote: »

I would rather not tell the mortgage providers given that I have a very good tenant,

If you have registered on the electoral role at your residential address where you live. Then a trail is already being left.

Werdnal

Thrugelmir wrote: »

If you have registered on the electoral role at your residential address where you live. Then a trail is already being left.

I would agree with this. So many government agencies and other organisations share information these days, it is only a matter of time before mortgage companies get hold of it too. Everything you register in your name at your current address - driving licence, employer records (PAYE), council tax, electoral roll, banking, credit cards ... could trip you up with your lender, eventually!

duckandcover1

Werdnal wrote: »

No, late protection is not an option.

If the deposit was paid by the tenant more than 30 days ago (as in this case) you cannot protect it now.

OP you can return the deposit in full to the tenant, getting a written receipt signed as proof you have done so. However, this will not prevent the tenant suing you for the suggested penalty of 1-3x the deposit value, but showing willingness to return it, you will mitigage the penalty to a lesser amount.

Are you sure the agents did not protect it for you initially? If they did so, you may be in the clear here.

I have found a payment for the deposit, I will return the deposit to the tenant in full at the weekend when I see him. I will just have to accept the penalty if it comes to it although I am hoping it won't, the tenant is happy just being in the house so I hope I won't have any issues with this, although fully accept I could