Accidentalish Landlord - consent to let expired

marshall666

Hi everyone
I wasn't sure whether to post this in the mortgages or house buying/renting/selling so apologies if I'm in the wrong forum.
My fianc! became a landlord when we bought a house together in August 2013; she did everything by the book and obtained consent to let from her lender (Principality).
She had to renew this consent twice; both times she received a reminder letter and she duly reapplied for and got the consent to let.
As she was about to re-let the property she realised that the last letter she had gave an expiry date of last November, and so she was actually without consent.
She's now contacted principality who have told her they've had a policy change and she must now switch to a BTL - which is fine as thankfully she is at about 75% LTV. But they want to charge her £2K to get out of her fixed rate mortgage (ERC if I have my acronyms correct).
I understand they are completely within their rights to do this, but wonder if there was any way to wriggle out of the ERC, it seems a bit unfair if she is staying with them and essentially being forced to end it by the lender. I know she isn't actually being forced! But it feels like it, since it would cost her at least £2K to sell the property.
The other issue is that despite the consent to let expiring, the lender has continued to take the SVR+1% that they put her on when consenting to let - is this worth chasing up? She could be on dodgy ground since for some of that time she was letting without consent.
Your thoughts most appreciated.

stator

How long exactly until the fixed rate expires?

marshall666

sorry - fixed rate expires end of 2016

silvercar

The other issue is that despite the consent to let expiring, the lender has continued to take the SVR+1% that they put her on when consenting to let - is this worth chasing up?

This is the point where I would keep quiet, not chase up.

The lender gave CTL, the lender knows the property is tenanted, the lender is charging a premium as a result, the lender should be aware of tenancy law in the UK and that landlords don't have the power to evict on a whim.

I would be dragging this out as long as possible.

If the lender sends another reminder, I would send a reply along the lines of you don't want to redeem, but would consider a move to CTL if this didn't involve an ERC. Then wait. If you get another negative response, you could reply along the lines that you accept CTL has ended and will not renew the tenancy, but you have to follow the law on ending tenancies. If you get a negative to that then ask the lender to indemnify you against breaking tenancy law.

marshall666

silvercar wrote: »

This is the point where I would keep quiet, not chase up.

The lender gave CTL, the lender knows the property is tenanted, the lender is charging a premium as a result, the lender should be aware of tenancy law in the UK and that landlords don't have the power to evict on a whim.

I would be dragging this out as long as possible.

If the lender sends another reminder, I would send a reply along the lines of you don't want to redeem, but would consider a move to CTL if this didn't involve an ERC. Then wait. If you get another negative response, you could reply along the lines that you accept CTL has ended and will not renew the tenancy, but you have to follow the law on ending tenancies. If you get a negative to that then ask the lender to indemnify you against breaking tenancy law.

Thanks for that reply - the issue is that the tenancy has ended and she's now looking to get someone new in, so she's obliged to notify the lender of the new tenancy agreement, as far as we can tell.
Edit:
Just to clarify above, there wasn't a reminder about the CTL ending, we only noticed it was tacked on the end of the last letter granting CTL which was in April or May 2014. It seems a bit odd that they haven't send anything out notifying that the CTL ended at the time.
Also - sorry do you mean "a move to BTL if this didn't involve an ERC" above?

marshall666

any advice from brokers out there? we're going to see a broker soon, but any opinions beforehand would be well received

Let_Us_See

Ah! Most advisers charge for advice and that's how they survive. Good luck with your broker appointment.

somethingcorporate

I'd just go quiet on the issue.

We had C2L from the BoI for a period of 2 years. 5 years later and they write to us to tell us we owe the renewal fee. It has meant we have avoided the £7k ERC as the fix expires tomorrow and the house is currently under offer.

chanz4

if their was a fire, the insurance maybe invalid