Advice on eviction

BigAunty

Rocky99 wrote: »

Ok it's joint names me and my husband, the lenders no nothing of my parents.

Would someone mind talking me through the repossession please, as come the 1st of feb I am unsure what moves to make, thank you

Full details of possession process here. Come back if you have any queries. Time span wise, it may take a month or more to reach court after you apply for the PO. The tenants can ask for extra time for the PO to come into effect (Shelter gives more info on this). Then if they don't leave on the date of the PO, you have to return back to court to ask for court appointed bailiffs to enforce it - this is the end of the road. Again, this might take a few weeks, may be a month or so (depends on backlog) to get the appointment.

If you are successful and the court doesn't have long queues and it isn't contested by them (they can ask for extra time) and bailiffs aren't needed, it might take around 2 months from expiry of the S21. Perhaps 3 to 4 months with long court queues, contested and bailiffs required. Your clock starts from zero if the judge turfs out the S21.

You can read it from the tenants's perspective on the Shelter website.

http://england.shelter.org.uk/get_advice/eviction/court_action_for_eviction

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There are three stages involved if a landlord wishes to obtain possession:
1 – Serving a notice – this is a s21 Notice or a s8 Notice as specified in the Housing Act 1988
2 – Applying to the county court (the one nearest the property) for a Possession Order.
3 – Applying to the court again for the court bailiff to evict the tenant.


http://www.landlordzone.co.uk/content/ending-assured-shorthold-tenancy

The_Negotiator

DaftyDuck wrote: »

Any in this context. And I don't mean that the parents couldn't possibly still have a claim for a broken contract. I was really expecting there might be a solution to the immediate problem re mortgage payments. If, subsequently, parents chased for their loss, they might win... but to be accommodated in a smaller house, possibly paid for by the equity released by the sale... which I agree with you is down by an additional and risky 50k.

The courts would expect the damages to cover the costs of a similar house in a similar location in a similar state etc. not the minimum required for the couple, they afterall gave away £150k in return for the contract.

The_Negotiator

DaftyDuck wrote: »

Yes, I suspect it would.

Based on what? A number of issues count against this:

The OP has allowed free tenancy for five years, the court would probably accept that the contract has been agreed through performance of the agreement.
The OP has put in writing that they did sign the contract, so they are not trying to say that it is forged.
Contracts do not need to be witnessed - it might be a normal part of some contracts where one party needs to be satisfied of the legitimacy of the other party. I have a construction contract infront of me for a £200 m project - it is not signed by a witness!

BigAunty

The_Negotiator wrote: »

The courts would expect the damages to cover the costs of a similar house in a similar location in a similar state etc. not the minimum required for the couple, they afterall gave away £150k in return for the contract.

Maybe - is there any case law you can cite in favour of this, important legal decisions relating to a relevant scenario? I did try to unearth a precedent but had no luck, perhaps because the keywords I used just kept unearthing common but irrelevant information.

Might be worth the OP trying to find a more specialist housing forum to post the bare scenario of the case. I just can't think of one other than Landlordzone to get a second opinion not just on her legal exposure but her potential options for dealing with a property she can't afford where she granted her parents lifelong free tenancy.

BigAunty

Rocky99 wrote: »

Just checking....
There was no witnesses to our signatures on this contract does this have any bearing?

Funnily enough, I believe guarantors can get out of their contractual obligations for being responsible for tenant arrears if the document wasn't a formal deed and it wasn't witnessed.

However, the solicitor thinks she can be held to it. It does at least signal intention, however crude it was.

pinkshoes

Just thought I'd try and summarise:

OP bought parents house for £250k. This was paid for by a £150k mortgage, and £100k equity donated by the parents.

Of the £150k released, £100k paid off the parents debts, then the OP took £50k, which they used to pay all fees.

OP says the next door neighbour's house (a little smaller) has sold for £185k recently, so the equity in their house could only be £35k to £50k in theory.

The OP's parents have now lived rent free for 5 years, so potentially saving themselves perhaps £30k+ in rent so far.

The OP is still quids in at the moment from the deal, but if parents live for too long, they'll loose out.

OP also can't afford to pay both rent and mortgage.


My advice:

WRITE to your parents, telling them that you can no longer afford both the mortgage and the rent, so you are giving them three options:

1. the house is sold, and you buy them somewhere MUCH smaller to live rent free for rest of lives.

2. the house is sold, and they can have all the equity (£35k - £50k), and use this money to rent somewhere.

3. OP will stop paying the mortgage, let the bank repossess the house, then they will have to find somewhere else to rent with NO cash to help them.

DaftyDuck

The_Negotiator wrote: »

The courts would expect the damages to cover the costs of a similar house in a similar location in a similar state etc. not the minimum required for the couple, they afterall gave away £150k in return for the contract.

That would depend what the contract stipulated, whether the house was to be sole occupancy of the parents, whether there was clear mention of no rent whatsoever, in perpetuity, etc.

Point is, continuation as is , is impossible. There are only a few viable options. Most obvious to me (unpalatable it may be for the OP) would be if the contract doesn't specify sole occupancy for parents, then OP & family move in. That is affordable for the long term, and is the only truly viable proposition I can see.
There may be room in serving the s21 successfully, selling the property (or renting it out at a realistic rent), and facing up to possible obligations to parents as a separate issue... if a court found in their favour, if it went that far. If... if... The current option leads to certain financial ruin.

The parents would actually be better off accepting the s21, as they might be eligible for housing benefit in another property (deprivation aside for the moment), or would be able to use the rent from the property to fund a rental more in fitting with their ability to pay (be paid for).

DaftyDuck

Pinkshoes... shouldn't option 2 include the return of£50,000 that was taken by the OP at the time?

My option 4 would be they all move in together as one "happy family"... I know, but it may be the only affordable option... Option 1 may just delay the inevitable as the OP may simply not have the cash to pay for this either.

BigAunty

pinkshoes wrote: »

My advice:

WRITE to your parents, telling them that you can no longer afford both the mortgage and the rent, so you are giving them three options:

1. the house is sold, and you buy them somewhere MUCH smaller to live rent free for rest of lives.

2. the house is sold, and they can have all the equity (£35k - £50k), and use this money to rent somewhere.

3. OP will stop paying the mortgage, let the bank repossess the house, then they will have to find somewhere else to rent with NO cash to help them.

Great summary.

Problem with option 1 is that the OP still can't guarantee she can meet the mortgage on a smaller property for their natural lives. What if her husband or the OP loses their job? What if they have more kids? What if rental prices continue to soar? What if mortgage interest rates soar? What if downsizing only reduces the mortgage by a hundred or two hundred pounds per month, can the OP still find 500-600 pounds per month?

silvercar

Great summary pinkshoes.

1. the house is sold, and you buy them somewhere MUCH smaller to live rent free for rest of lives.

2. the house is sold, and they can have all the equity (£35k - £50k), and use this money to rent somewhere.

3. OP will stop paying the mortgage, let the bank repossess the house, then they will have to find somewhere else to rent with NO cash to help them.

1 should be rejected as OP is older and wiser now and should not entertain the idea of guaranteeing parents a home for life in current financial position.

2 works and is a preferable solution. It looks like no CGT would be owed because the property has not gained in value (CGT looks at property value not equity.) Very luckily for OP the lifetime tenancy agreement was signed after the house purchased, so the starting point for CGT would be the then market value, not the market value of the property with 2 not very elderly residents on a free for life deal.

3 is possible but not recommended. the lender would then realise that OP bought on a residential mortgage without living in the property, that she gave a life tenancy without consent and didn't notify lender of situation. In any case repossessions take months building arears and are sold at a cheap price and the lender charges for services, so OP would have little money left if any from the eventual sale. Plus a black mark on credit file for repossession.

So I would choose option 2, but phrase it as all equity after sale costs, so estate agent and legal fees are covered, tell parents you will sign a letter instructing solicitor to pay net proceeds to them.