Charges against property & letting it

Kipper*

Hi. I am wondering what the situation is with charges against a property due to debt please. Here is the situation...If a neighbour were to have charges (significant) to their property but the property couldn't be taken off them due to having children as it was their primary residence it would make them homeless. They then they decided to move out & rent the property out so that they could have a larger property that they could rent and live in elsewhere. Is this allowed or should their property then be taken off them? Thanks

AdrianC

It depends entirely on creditor that's placed the charge.

All a charge means is that the property has a flag against it on the Land Registry entry which says that it cannot be transferred to another owner without the charge being released by the creditor. When you have a mortgage, the lender places a charge. Some lenders are quite happy with properties being rented out, others might not be.

Some creditors can push to gain possession of the property - that's your "taken off them". Others can push for the borrower to be declared bankrupt.


Obviously, if the family have moved out, then the need to protect the children's residence is now irrelevant. But do the creditors know this? Perhaps they do, and have agreed the situation. The debt is still protected by the charge against the property.


If this is about your neighbour, then there is no way you can possibly know the truth of the situation. You can pay a few quid and get a copy of the Land Registry entry for the property, but that will only tell you who the charge holders are. They will not tell you anything about what they do or don't know, and what they have or haven't agreed with their debtor.

00ec25

so you don't like the fact that the property next to you is now let?

What have you got against the tenants that you are scrabbling around in the affairs of the property owner trying to find something to, presumably, use against them?

martindow

Originally, because of the children, a charge was put on the house as they didn't have the means to settle their debt.


Now they have moved out there is no reason why the debt cannot be repaid by selling the house if necessary. There seems a moral case to let the creditor know the situation.



I would not feel any compunction to protect people who are avoiding their debts. I wonder if they are bothering to declare their rental income?

AnotherJoe

So let the creditor know then.

Fosterdog

Maybe they are in negative equity and selling the house wouldn't raise enough to clear the mortgage and the charge.

silvercar

If you wanted to stir trouble you could let the mortgage lender know that the property is now tenanted. it may be that the lender gave consent to let , but it may not be the case.

Kipper*

Thank you all. The situation has arisen due to them being an absolute nightmare to live next door to. We had cause for our solicitor to deal with them & through that we discovered about the charges, who are to a variety of people, one of which we have the contact deatils for. It just seems unfair that yet again they are swanning around, making money yet they owe so much to others (we are talking in total into the million). We wondered if we should contact the person we know has a charge against the property and let them know the situation a he feels fit, however, equally we don't want them moving back into the house and making our lives a nightmare again.

AdrianC

I suspect that there's an awful lot more going on behind the scenes that you don't know. If it was as simple as you describe here, then they'd have been declared bankrupt by now, children or no.

xylophone

If the house were sold, what guarantee do you have that the purchasers (or possibly their tenants if they chose to rent out the property) would not also prove to be nightmare neighbours ......lightning can strike in the same place.......:)

HampshireH

I dont really understand this post.

You dont want to live next to these people but you dont want them to live elsewhere and rent their house out.

To be frank who they owe money to is absolutely none of your business unless they owe it to you.