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Rent increase question, is this fraudulent?
sotonkona
Posts: 25 Forumite
My landlord needs to remortgage and in order to get the best value he has asked if we would mind paying £200 more rent (added to a new contract) so that they can get a better mortgage. In return he will set up a standing order to pay us £200 a month back so we won’t have a rent increase. This will not be shown in our shorthold tenancy agreement (just the increase) he will give us a separate contract to say about paying us £200 every month towards bills!
This sounds wrong to me, pretty fraudulent and risky, or is this normal?
Rent in this area is already high enough without it being artificially increased so my landlord can get a better mortgage!
This sounds wrong to me, pretty fraudulent and risky, or is this normal?
Rent in this area is already high enough without it being artificially increased so my landlord can get a better mortgage!
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Comments
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It is mortgage fraud.0
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I seriously doubt it would even work - the mortgage company will prefer the valuer's opinion on what the market rent is for the area far above anything the landlord says.0
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Buy to let mortgage value of loan depends on both value of property and rent.
So for a £100k property renting at £1500/month you'll likely get £75k loan. But renting at £1/month s*d all.
So the story does make sense.
But it's fraud.
Explain you'll agree for £10k cash in claw today.0 -
Is he definitely registered as a LL? If he's actively looking to engage others in mortgage fraud is he bothered about the rules with being a LL either?
Sounds like he might be a 'Nigerian General' moonlighting as a LL or maybe your next communication from him will be telling you that he's traced a distant relative of yours that has left you a massive inheritance, but there are costs for transferring to the UK that he can help you with...0 -
How much are your council tax, gas and electric bills per month on average? You could try proposing to LL that these bills are included in the rent on the new tenancy agreement. That way there's no need for the LL to transfer money back or to commit fraud.0
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How much are your council tax, gas and electric bills per month on average? You could try proposing to LL that these bills are included in the rent on the new tenancy agreement. That way there's no need for the LL to transfer money back or to commit fraud.
Doing that with council tax would cause no end of problems.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0 -
I only suggested it because my son rented in England for two years with CT+utility bills included without any problems. Maybe the OP could ring the local council frst to make sure they would be happy.0
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That wouldnt work. But you could ask him to pay you upfront £2400 to sign a new lease for a year at the higher rent. That would be fine...probably0
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definitely fraudulent!0
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I only suggested it because my son rented in England for two years with CT+utility bills included without any problems. Maybe the OP could ring the local council frst to make sure they would be happy.
It has nothing to do with whether the council are happy.
It's not something that can be elected and often catches people out, to their financial cost. In most cases the tenant is responsible for paying the council tax except in certain legally defined situations.
People have to be very careful if they are asked to pay the council tax with the rent as, if it turns out they are liable after all for the council tax, the council will come after them for the entire amount.I no longer work in Council Tax Recovery but instead work as a specialist Council Tax paralegal assisting landlords and Council Tax payers with council tax disputes and valuation tribunals. My views are my own reading of the law and you should always check with the local authority in question.0
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