House sale /Eviction of Tenants/Buy to let mortgage rates

Mallory1

Hi there, we are landlords on our old flat which we have a buy to let mortgage on. We realised with the interest rates being as they are that we had to sell the property. we gave notice to our tenants ( it was the end of their contract anyway) and we found a buyer who was able to exchange/complete on the date needed to avoid going to a variable rate of 9.9% on our mortgage. to cut a long story short , these tenants are clearly career fraudsters, there are many issues with them during the tenancy and now they have not moved out ( not paid rent for three months ) and are still there past the end of the contract date. They are Jeopardising the sale of the flat and meaning we will likely be subjected to having to pay the hugely inflated rate on the mortgage come the end of the mortgage. I contacted the lender to see if they may be able to help us to extend the rate as is while we go through the eviction process or at least offer us a more favourable rate. The rate is crippling as it stands. we have made all the right decisions and are now are at the mercy of career criminals ,( who we cannot even call the police on.). The lender has said NO . I cannot believe they cannot review this in certain circumstances. We have another product with them, we have always paid and never missed payment and are covering costs while the tenants are not paying and we are taking legal action.  We are a small famliy, self employed, working all the hours to make ends meet . i think the assumption is we are wealthy and can take this hit but we cannot. I am just wondering if anyone has found themselves in a similar situation and or has any advice or if anyone has had a lender negotiate interim terms with them on a buy to let mortgage if they have been in the eviction process ( which can take months & of course if we lose the seller and have to start again on selling this could prolong our exposure at this inflated /ruinous rate). Keen for any advice at all, we have been working so hard to keep our heads above water, this feels so unfair that we are at the mercy of these people who know exactly what they are doing and working the system. there is no protection whatsoever for us adn our exposure & the computer says no /greed of the lenders seems outrageous to me  ( perhaps niavely but .. ) . Grateful of any information anyone may be able to advise on. Thanks so much

theartfullodger

Welcome to MSE..

Paragraphs??

Which country (eg NI, Wales.. - the laws are different)

What sort of notice did you serve please (eg s8, s21..)?? If s21 is it valid ???  - see 
https://nearlylegal.co.uk/section-21-flowchart/

Even if notice was valid a tenant does not have to leave/comply & the tenancy does not end. (If England see Thatcher's 1988 Housing Act which explains the only way a landlord can force a tenant to leave is with court then bailiffs/hceo  - usually takes about 6 months...).  They have the right to stay just as you have the right to serve notice.

What training have you done please in being a landlord and/or landlord/tenant law, please?? (You mention tenants know "" .... exactly what they are doing and working the system"").

Regarding your notice what expiry date did you put on it please - was it e.g. the end of their then tenancy contract??

From what you've stated I doubt tenant has done anything wrong but please answer questions & we'll see if we can help.

Given you state .."" clearly career fraudsters, there are many issues with them during the tenancy  "" why hadn't you evicted them earlier when the issues arose, please?

You state ""there is no protection whatsoever for  "" - I humbly disagree, there is a lot a landlord can do, especially since 1988 Housing Act.  What specifically are you after as regards "protection" please??

Were the issues things that were landlord responsibility (eg repairs) or tenant's responsibility please??

Regarding the "greed" of lenders I'm afraid that is down to the market & basic capitalism. 


Best regards

Artful: Landlord since 2000. (Yes of course I've had issues with tenants: Often, sadly, due to my stupidity...)

Hoenir

Mallory1 said:

 The lender has said NO . I cannot believe they cannot review this in certain circumstances. 

They've no reason to do so. Unfortunately few people consider the downside risks of letting a property. You've most most likely benefitted considerably during the good times. Making a profit on letting the property and will be making a capital gain when it's eventually sold. Letting a property is a business. Unfortunately in all walks of life there are people who don't play by the rules. You've had the misfortune to end up with some as tenants. 

Tucosalamanca

Massive amount of irony here. 

Career fraudsters, issues during the tenancy, paying a hugely inflated rate, the lender has said no, always paid and never missed a payment, working so hard to keep our heads above water, this feels so unfair that we are at the mercy of these people who know exactly what they are doing and working the system, computer says no / greed.....

This could almost have been written by one of the millions of renters in a similar situation....

jonnydeppiwish!

But you haven’t ended the tenancy with the tenants so should they move out?

propertyrental

Which country?

Assuming England, comments in bold:

Mallory1 said:

Hi there, we are landlords on our old flat which we have a buy to let mortgage on. We realised with the interest rates being as they are that we had to sell the property. 

we gave notice to our tenants How? text? letter? Saying what exactly? S21?

( it was the end of their contract anyway) 

No it wasn't. Only the tenants or a court can end an (English) tenancy contract. I suspect you mean it was the end of the fixed term, which is completely different. It does not end the contract or the tenancy.

and we found a buyer who was able to exchange/complete on the date needed to avoid going to a variable rate of 9.9% on our mortgage. 

Was the buyer awatre the property had tenants? Was the buyer prepared to take on the tenancy?

So you hoped to Complete the sale on a date convenient to you, without a thought for the needs or convenience of your tenants who are losing their home?

to cut a long story short , these tenants are clearly career fraudsters, there are many issues with them during the tenancy and now they have not moved out ( not paid rent for three months ) and are still there past the end of the contract date.

Not sure why you think they are 'career fraudsters'. Evidence?

What 'issues'?

Why should they move out before the tenancy ends (which only happens if they end it or a court ends it)?

 They are Jeopardising the sale of the flat and meaning we will likely be subjected to having to pay the hugely inflated rate on the mortgage come the end of the mortgage.

Well trying to sell a property before getting the tenancy ended and the tenants evicted was ..... rash

 I contacted the lender to see if they may be able to help us to extend the rate as is while we go through the eviction process or at least offer us a more favourable rate. The rate is crippling as it stands. we have made all the right decisions and are now are at the mercy of career criminals ,( who we cannot even call the police on.). The lender has said NO . 

Lenders have their policies, and interests tates are now what they are - why should the lender make you an exception?

Again - do you have evidence they are 'career criminals'? Nothing you've said so far suggests this. If they are, you can use S8 to evict them.

I cannot believe they cannot review this in certain circumstances. We have another product with them, we have always paid and never missed payment and are covering costs while the tenants are not paying and we are taking legal action.  

see above re lenders' ppolicies

We are a small famliy, self employed, working all the hours to make ends meet . i think the assumption is we are wealthy and can take this hit but we cannot. I

I doubt the lender has made any assumption like this - they are just applying their policies uniformally to everyone.

 am just wondering if anyone has found themselves in a similar situation 

Many people

and or has any advice 

Learn (rapidly) about the legalities of tenancy law

or if anyone has had a lender negotiate interim terms with them on a buy to let mortgage if they have been in the eviction process ( which can take months & of course

 if we lose the seller and have to start again on selling

This is likely to happen - you marketted prematurely. Now, follow the eviction process and then find a new buyer

 this could prolong our exposure at this inflated /ruinous rate). 

Your business model should take into account the risks of non-paying tenants, increased mortgage rates, damage, etc - I suspect you have no business model but simply accepted the rent and hoped for the best.

Keen for any advice at all, we have been working so hard to keep our heads above water, this feels so unfair that we are at the mercy of these people who know exactly what they are doing and working the system. there is no protection whatsoever for us adn our exposure & the computer says no /greed of the lenders seems outrageous to me  ( perhaps niavely but .. ) . Grateful of any information anyone may be able to advise on. Thanks so much

Your tenants are not 'working the system'. They are protecting their home and following the law.

I suspect you are only now, after years of being a LL, learning about the relevant law....

S21 (or S8 if applicable) bailiffs, then re-market.

Mallory1

Addressing some of the comments made above

I must note that i thought this was supposed to be a safe space . I am shocked at the aggressive/offensive attitudes and responses

- Paragraphs - Low blow  - sorry i am new here and I didn't know if there was a limit to the number of words you are allowed to use. I am also in a heightened emotional state and hurried as i am trying to get on with my day job.

- England. We served end of tenancy notice ( as per contract , two months notice which also happened to be their end of tenancy/contract . We have always been incredibly respectful of the tenants despite their breaches ).  A month after the notice period was given we went the legal route to evict due to all the contract breaches as well as the non payment of rent and the uncovering of information which leads us to believe their intentions to stay on and not pay their rent.

- issues - subletting, late payment of rent every month, agressive behaviour, not signing up to energy companies and not paying bills, registering businesses at the address, pets, amongst other things. We were advised that as they were paying their rent ( albeit late every month ) we would have a difficult time removing them and it would cost us alot of money. We were not in a poistion to lose the rent money , even one month ( we have both been out of work , we are self employed, we have a family ) we decided to keep our heads down and get to the end of the contract. A big part of this decision was also due to personal safety as these people are not good people and they know where we live. I am scared of them.  They don't operate on the same playing field.

- We haven't and won't make a huge profit on this property due to not having much equity in it , covid times and selling when we are under pressure at this time means we are not getting a great price on it . We are not business people, we held onto this property at a loss to ourselves (naievely clearly ) for sentimental reasons and in the hope that it would perhaps grow in price in the bigger picture. When we made this decision,  pre covid and pre Wars  etc , we could not have foreseen the rates shooting up and subsequently being held to ransom by tenants that were found for us by  ( so - called ) reputable agents. 

- Any issues at the address. We addressed all issues when they arose  ( this flat was our home and did not suit us to not keep it in good condition for tenants or for any reason ) despite them being aggressive in person on a couple of these times. Mostly they do not respond to us so we cannot have access to do things that need to be done, general maintenance and repairs.

- In this instance there is no protection for us , we are at the mercy of people who clearly know the system and how to milk it. They have lived rent free for three months and will continue to do so at their own leisure. The truly scary thing is that they passed reference checks in the first place and also that they could pass reference checks right now to start renting elsewhere !  Meanwhile we can do nothing but wait and have to spend money on legal fees and be subject to increased mortage rates when the inevitable happens and we cannot complete the sale as we do not have vacant occupancy.

- The tenants are living in a beautiful space. it is a not a nasty landlord situatoin with mouldy ceilings and issues that are not being dealt with. They are not in financial distress. In fact,  the estate agent that was showing the property for sale,  had to ask them to clear the bed before a viewing as there were stacks of cash ( 1000's of £'s  ) on the bed !

- We used Foxtons to find and reference check these tenants and receive and monitor all payments - That is another issue . We feel incredibly let down by Foxtons, who last week chased us to release the deposit to the tenants who are still living in our property and haven't paid rent for three months ! 

I only joined this forum and wrote a note on here to see if anyone had any advice or had been in a similar situation. I know it is a long shot but i am desparate as the financial ramifications for my small family are Beyond scary.  Ultimately i know It is what it is & we are doing what we can  legally to remove them. I really appreciate any advice but i really do not need scorn and ridicule and accusations. This is not what i am about and this is not what i expected in this forum.

Thank you

theartfullodger

Thank you.  Again, please, what sort of notice   Was it an s8 or an s21 (? form 6a ?) or just your wording of a notice to quit? (iirc correctly Thatcher's states a landlord's notice to wuit has no effect in periodic tenancies).

And please, was expiry date the end of the tenants documented tenancy agreement? (there's a legal issue behind asking)

As no rent for three months I would have served 3 s8s by now, starting the day after rent was due.   S8g10 is valid if only 1p underpaid for only one day (only take to court when at least 2 months owing, s8g8,10 & 11 )

re subletting was that subletting the whole place (legally tricky for landlord) or just subletting rooms whilst your tenants remain please?

Re Mssrs Foxtons have a look at the Letting Agents redress scheme.

Best regards.

As before, welcome to MSE.

GDB2222

I agree that many of the responses were unhelpful. 

Do you have solicitors working on the eviction, or are you doing it yourself?

Which notices have you served so far? S21, S8 rent arrears and S8 breach of contract spring to mind. 

We have a tenant who has been arrested for cocaine smuggling. He’s been in custody for ten days and there’s no indication that he’s going to be released. The flat is a shambles, with the door broken in by the police. Even though he may well be in jail for the next ten years, we are going through the formal eviction process as if he were still in residence. That’s going to take six months plus. It’s obviously right that we don’t add to his troubles by throwing him out onto the street, but it’s still annoying. 

GDB2222

By the way, an interest rate of 10% is terrible. Given that you won’t get the tenants out for quite some time unless you offer them a bribe, you maybe want to see whether you can refinance- perhaps by increasing the mortgage on the house you live in. 

If you can possibly afford it, a bribe may well be your best option.  We’d love to offer our smuggler tenant a bribe, but there’s no way to contact him. 

Mallory1

Section 8 , as advised by the Solicitors we are using,  as the tenant ( who doesn't actually live there but sublets.)  is in breach of so many points on the contract.

We are waiting on a court date and have been advised of the process,  time frames & cost for a private bailiff should it come to it, which it sounds like it will.

We were very clear with them that unfortunately we had to sell the flat as we couldn't afford to keep it with the mortgage renewal coming up and gave plenty of time to find somewhere new. There was no way they could possibly have thought we would renew the tenancy with the way they behaved as tenants throughout. The tenant was not actually living there but subletting to another family member who more than likely wouldn't pass reference checks.