Landlord defaulting on mortgage

sprat141

Hi everyone

We have been living in our current property for 4 years, have never defaulted or paid our rent late. On the whole our landlords have been pretty good - may be a bit slow in responding to things, but we have been left to it.

We have recently found out that they have been defaulting on their mortgage and we also suspect that they haven't informed their lender that they rent the property out. Despite several reminders, our tenancy agreement expired and they have never renewed it so we now know that should their home get repossessed, we are screwed! We have previously offered to try and buy the house from them, but they refuse to sell it, however if the house is repossessed and we are evicted, the lenders will then simply put the property on the market for us to buy (which defeats the object of saving the roof above our head!)

We are a normal quiet working family who happen to have pets, so this is instantly going to go against us.

I just wondered whether anyone had any advice or whether there would be a chance that we could purchase the house from the lender? Ironically we have been in their situation in the past and we had our home repossessed, so we know the stress of what they must be going through, however we feel that we are going to be screwed because they haven't informed the necessary people.

This only really transpired in the last day or two, so we haven't managed to contact CAB or obtained any legal advice as yet.

Any advice would be most helpful. Thanks guys.

audigex

If it is repossessed then either the landlord or lender will have to give you notice: the fact that he didn't tell the lender you were there likely makes little difference to the fact that you can't simply be removed from a property that you had in good faith been a tenant of. The lender might not be happy with the (by now former) landlord, but that doesn't mean they can just boot you out because they hadn't been informed.

They may approach you to evict you, at which stage (or earlier if you are able) you could perhaps approach them regarding purchasing the property. Do you know who the lender is?

You need to talk to CAB at the very least, but I'd consider consulting a solicitor and trying to contact the lender directly.

sprat141

Thank you audigex for your quick and helpful reply. CAB is on our agenda so we will be approaching them. I don't know how we find out who the lender is without asking the landlords (which may get their backs up), but it would be really helpful to know!!

audigex

The land registry should be able to help you there best of luck

Guest101

Actually the problem is. If the lender doesnt know about the tenant, when it goes to court for a possession hearing, the tenant is not there to make clear the full situation.

This can lead to bailiffs coming to the property and removing belongings, changing locks etc, whilst the tenants arent there.

The LL is in breach of their mortgage conditions, A: by not paying, & B: by not getting consent to let (probably)

I would suggest that if anything ressembling court papers turns up, if not before, you should contact the lender (and the court) and advise them that you are the legal tenants of the property.

I wouldnt feel bad about this to the LL, there's a good chance he is not declaring the income, not secured your deposit (?), not done gas safety checks (?). - and now putting your home security in danger.

DRP

audigex wrote: »

The land registry should be able to help you there best of luck

^^yes. download the property title from the LR website (less than fiver), and find out who the mortgage provider is.

sprat141

I've just bought the land registry info so now have the mortgage lender.

We have asked to meet with LL tomorrow to try and discuss our fears. So far it appears to be one missed payment, but we have found out his wife is very poorly and it coincides with that; however, we need to protect ourselves as we also have a child.

Apparently also, if they had declared renting out their property to their lender, we could have had our rental payments showing on our credit file which could have gone in our favour in respect to getting a mortgage and proving we have never defaulted!! It's a shame really that people's lives get affected because someone wants to make a fast buck.

Thanks guys for all your feedback, it has been helpful and an eyeopener. Not looking forward to sorting this can of worms!

eddddy

If the LL doesn't have consent to let, there's a page on Shelter's website detailing what you must do: http://england.shelter.org.uk/get_advice/repossession/about_repossession/repossession_by_a_landlords_lender

You need to look out for letters addressed to "The Tenant or Occupier" or similar, and take action when those letters arrive, and hopefully get a 2 month delay in the repossession.

Otherwise, the lender may not even realise that you are tenants, and send in the bailiffs.

Guest101

sprat141 wrote: »

I've just bought the land registry info so now have the mortgage lender.

We have asked to meet with LL tomorrow to try and discuss our fears. So far it appears to be one missed payment, but we have found out his wife is very poorly and it coincides with that; however, we need to protect ourselves as we also have a child.

Apparently also, if they had declared renting out their property to their lender, we could have had our rental payments showing on our credit file which could have gone in our favour in respect to getting a mortgage and proving we have never defaulted!! It's a shame really that people's lives get affected because someone wants to make a fast buck.

Thanks guys for all your feedback, it has been helpful and an eyeopener. Not looking forward to sorting this can of worms!

No. it doesnt work like that. You can prove this by showing statements to the lender if required. But it would not ever appear on your credit report.

Guest101

Guest101 wrote: »

I wouldnt feel bad about this to the LL, there's a good chance he is not declaring the income, not secured your deposit (?), not done gas safety checks (?). - and now putting your home security in danger.

Op can you confirm if these have been done?

SeduLOUs

Also the tenancy not being officially renewed doesn't matter a jot. It automatically becomes a periodic tenancy so it is still absolutely valid as a contract with the LL.