Buy to let 2 b auctioned

SpandauGirl

Please help. Am desperate 4 guidance. have been adviced that my flat, which I rent out is due to be auctioned by receuvers on the 12th sept. Have just found out thatreceivers were involved on the 3rd.

Have managed 2 get an agreement in principle 4 a remortgage, but that wouldn't complete till end of month at earliest. Also, this is at 7.09 rate due to bad credit.

don't know what 2 do as feel l should have been given more notice. alsohave tenants in flat and feel responsible 2 them.

how does the auction work, would they put a reserve on property. flat is definitely worthmore than they want. but so confused, can they really move so quickly

any help gratefully received.

silvercar

Gaps missing in this story.

1. who are the receivers? Do you mean your lender is planning to repossess your property?

2. If the property is set for auction, that means the property has laready been repossessed. Where are the tenants?

3. I'm sorry but there is no way you would be told on the 3rd that your property is scheduled for an auction on the 12th.

4. If a property was auctioned by repossessing lenders, they would allow sufficient time after repossession for it to be advertised by an Estate Agent.

To be repossessed a lender would first have to go to court; likely to then be given 28 days to sort out mortgage arrears (ie come to an arrangement) rather than pay them off.) After these 28 days the lender would then have to go back to court to gain the repossession - which could be given 14 days hence (or maybe 28 days if the tenants pleaded in court).

If a lender was taking action it would be because the mortgage arrears were of at least 2 months. You would know this.

If a lender took action they would write to you. You would know this.

They would also write to "the occupiers" for a BTL mortgage. For a non-BTL mortgage the letter would go to the property and so the tenants would find out. The tenants would know this. The tenants would contact you. You would know this.

Something doesn't add up.

A_Nice_Englishman

This thread sheds a little more light on the situation, silvercar
http://forums.moneysavingexpert.com/showthread.html?t=541929

Looks like the OP has been paying her residential mortgage instead of her BTL mortgage. Your questions still need to be addressed though.

SpandauGirl

A few answers to questions raised:

• Property is buy to let - so i understand they do not need to take you to court.
• i am not being repocessed as do not occupy property.
• they claim to have sent letters advising of missed payments - these were never received.
• i have potentially arranged a remortage - but have now been advised that i need to redeem full amount of mortgage by the 11th.
• my tenants only found out this week as well - with letter from the receiver.

i am not proud of myself for mucking up payments, but want to get things sorted now - the remortgage wouold potentially be done by the end of the month, but would be too late interms of the auction date. It appears they do not need to go to court as this is treated like a business.

Not sure I am explaining things very well, but am not an expert at all in this.

mightymouse

Hi

BTL is a business however the lender knows that there are / could be Tenants and therefore has a responsibility to them.

As with any business where receivers are appointed the lender wants a return to normal asap.

Your Tenants have rights and this might help:- http://www.thesite.org/homelawandmoney/askthesiteqandas/housingqandas/repossessionrights

It is likely this applied:-

You moved in after your landlord took out the mortgage, but the lender agreed to the tenancy;

Agreed by way of granting BTL mortgage.

SpandauGirl

Thanks 4 that.
Just want them 2 allow me 2 get my new mortgage. which is likely 2 b sorted by end of month. that in my mind would be better 4 everyone concerned.

I advised the receivers and my mortgage co. yesterday that had agreement in principle. this was after the letter was written advising of auction date. does anyone know who the receivers are working 4- r they there 2 help me as well. so confused, but it was the receivers who suggested remortgage they must know this can't be done in a week

silvercar

I don't see how they can put a property in an auction without it being advertised - who is handling the auction, is the property being advertised with an estate agent?

I still think the receivers would need to take possession - even with the tenants in the property. They can only auction a property if they own it. If they own it, it means they have taken possession. You need to know if this has occured or if it is still just in their plans. If you own the property, they can't sell it. If they have taken possession of it then they are now the owners and the remortgaging option is too late. If they have repossessed the place then they should have given you written notification of the fact, either serving it on you in person or at least by recorded mail.

I would:
phone your lender, ask them if they have repossessed or if it is their intention ie has this happened yet.

phone the auction people, find out when the property was listed with them and if they know who owns it. You could tell them that you are the owner of the property and don't understand why it is included in an auction listing, stir things up and they may decided they can't auction it yet.

As far as the financials go, the receivers / lender have a duty to get the best price in the condition it is in for a quick sale. This won't be market value but will be a realistic quick sale price. Whether they can justify selling it with tenants is interesting. The tenancy is between you and the tenants, we hear of tenants being evicted when lenders being repossessed more often than you hear of properties being sold with tenants in situ.

Do you own the property through a company? This would explain why the receivers have been called in and there not being a court case (maybe). I would have expected the lender to still have to go to court but you live and learn.

If you are happy to name the lender, someone may know how flexible they are likely to be.

Merton

Sorry to hear of your problems but this is exactly why BTL is such a terrible idea. Don't try to cling onto it - get out quick and cut your losses.

Dead_Eye_Jones

my troll-o-meter is going crazy...

reformedEffortMaker_2

Dead_Eye_Jones wrote: »

my troll-o-meter is going crazy...

haha

i cant believe i was sucked in!:mad:

jamesd

Read Recoveries for buy-to-let mortgages - the right approach and Call in the receivers.

No court action was necessary for the lender to ask the receiver to become your agent and manage the property on your behalf, including collecting rent and selling it.

Ask the lender for proof that notices were sent and received by you, not simply a screwup by the lender, or at least a copy of the notices so you can act on them now.

The receiver has to abide by the terms of the tenancy agreement but that does not block selling the property if they can find a buyer. The place I rent was sold without me hearing a thing about it until the deal was done. I still live there and the same could easily happen to your tenants with the new owner.

Immediately, do these two things:

1. Ask the receiver and the lender to explain how the receiver believes they are fulfilling their duty of care to you by selling your asset rapidly at a discounted price when you are going to be able in the very short term to repay your debt and avoid a loss, and further when you didn't know of their intent to take action because you never received their communications.

The receiver has a duty of care. Make sure that you put them on notice immediately that you do not consider an immediate auction sale to be fulfilling that duty and fully intend to ensure that they properly meet their obligations.

If you have the funds, now would be a good time to ask them to recognise that you didn't know they intended to take action, apologise for your mistake with the payments, repay the arrears and offer to both pay their receiver expenses and say an additional six months of advance mortgage payments to reassure them that you do take your obligations seriously. They probably won't go for it, but they might and since the new deal is more expensive, it's worth a try.

2. Talk to a lawyer so they can act on your behalf and get you the time you need. Nothing quite like a lawyer to explain just what duty of care means.

3. If you have a good relationship with your bank, tell them frankly that you screwed up, even though you didn't get the notices, and ask them if they would be willing to provide bridging finance. Also ask the local mortgage brokers and the solicitor if they know of a local short term mortgage lender - there are sometimes individuals around who will lend in this situation to make a quick profit.