Renting: Does LL Have a BTL Mortgage or OO?

Konisberg

Bungarm2001 wrote: »

Thanks for that Rabbitmad...you've just made my day if not my week!! :rotfl: :rotfl: :T

To the OP...Your being evicted eventually because your LL may or may not have a residential mortgage over the property and that they may or may not have informed their lender of their intention to let the property is about as likely as you being struck by lightening...twice.

Or winning the lottery.

Don't take too much notice of the tone of some of the posts on here. Some people pontificate about things they know nothing or very little about and blow things up out of all proportion.

ALL you need do if you are genuinely worried about this is to put your concerns in a note to your LL and I am sure he/she/they will put your mind at rest.

All the best... :beer:

Thanks Bungarm. At last some perspective! Some folks just have nothing better to do with their time. I have no problem with people being a little concerned and wanting to protect themselves but why does everyone get so obsessed and paranoid??!!

ziegel

Thankyou every body for your input, and particularly to barnaby-bear for understanding why I originally raised the question.

I too was under the impression that I could be evicted as a tenant very much more quickly if the landlord does not have a ‘Proper’ BTL mortgage, however I see from the discussion that this may or may not be the case in practical reality.

This quote from Cazza has significatnly eased my concerns:

But to Let mortgages for Limited Companies are a "speciality" of Capital Home Loans. I would think it unlikely that this is a residential mortgage, as far as I'm aware only an indvidual person can take out a residential mortgage.
It is possible that either the solicitor may have made a mistake when they registered the charge with the Land Registry, or that the landlord set up the Ltd Co specifically for the purpose of buying the property, I'm getting a little out of my area here, but if the sole purpose of the Company is the ownership of your property, then they may have put down the property address. Many small companies have an address where they actually operate from, but the address regisered at Companies House is that of their accoutants. Could be a similar situation here.

Thanks again

barnaby-bear

BobProperty wrote: »

First, I think you are being overly optimistic on what you can hope to achieve by doing this. The "fraud" would only exist once the tenant has been removed from the property, so you are not preventing what I assume you are attempting to prevent.
Second, you are creating an additional obstacle and complexity in an already complex situation. How long would these "permissions" be valid for? How would they affect the landlord and tenant's privacy?
Third, how many landlords would worry about this anyway? If the situation goes so completely wrong that their property is getting repossessed they are hardly going to worry about not complying with telling their lender years ago that they have rented it out. If you take an extreme "sledgehammer / nut" approach and say that you will get 5 years inside for not getting the lenders permission, then you will get delays and additional costs all of which the tenant will end up paying for.
Even with the agreement of the lender, there is nothing to stop them from repossessing the property if the borrower defaults on the loan. This is the point I seem to have difficulty in getting across. The lender has given permission to the borrower to let the property. So what? It makes no difference whatsoever if they want to repossess the place. The tenant still gets removed.

We're talking ensuring the lender knows the tenant is there (permission to let an EXISTING mechanism) and agreeing to honour 2 MONTHS notice - hardly rocket science and what the majority of above landlord's actually do.
If you make the deterrent strong you make the system self-regulating, make it a criminal offence and a ban from being a LL, amazing how LLs will comply.
Tenants can't be instantaneously made to leave even for non-payment so I can't believe the legislation covering housing ever thought through this scenario where people up-to-date and paid their rent can be left with the upheaval and nightmare of suddenly non-existent ASTs. Yes the tenant still has leave but they get notice with the permission to let system - which works.

barnaby-bear

clutton wrote: »

no LL sets out to make folks homeless.

Sometimes life's circumstances change, illness, death, bereavement, etc and LLs can no longer afford the mortgage - we all go thru hard times sometimes, LLs are no different.

i do agree that LLs should not be doing BTL on a Residential mortgage - but as earlier pointed out - it wont make a happorth o difference to the tenant if the LL reneges on mortgage payments whether they are Resi or BTL - either way the tenant still gets evicted.

Yes but with permission to let the mortgager and courts will honour the 2 months AST notice meaning the financial incompetence of the LL doesn't make people homeless when they've honestly paid rent.

BobProperty

barnaby-bear wrote: »

We're talking ensuring the lender knows the tenant is there (permission to let an EXISTING mechanism) and agreeing to honour 2 MONTHS notice - hardly rocket science and what the majority of above landlord's actually do.

What 2 months notice? If the tenant was 3 months into a 12 month AST where's the 2 months notice? What difference does the above make to repossession?

barnaby-bear wrote: »

If you make the deterrent strong you make the system self-regulating, make it a criminal offence and a ban from being a LL, amazing how LLs will comply.

I repeat my previous point, how does this help a tenant who is in a property which is being repossessed?

barnaby-bear wrote: »

Tenants can't be instantaneously made to leave even for non-payment so I can't believe the legislation covering housing ever thought through this scenario where people up-to-date and paid their rent can be left with the upheaval and nightmare of suddenly non-existent ASTs. Yes the tenant still has leave but they get notice with the permission to let system - which works.

Will you drop this "suddenly non-existent AST" rubbish. The AST is valid, repossession doesn't change that, go and re-read my previous post.
I've said it before and I'll repeat it: Tenant or no tenant, if the court orders a repossession and eviction that is what will happen. It doesn't matter what it says in the tenancy agreement otherwise you couldn't evict tenants who have valid tenancy agreements.

BobProperty

ziegel wrote: »

I too was under the impression that I could be evicted as a tenant very much more quickly if the landlord does not have a ‘Proper’ BTL mortgage, however I see from the discussion that this may or may not be the case in practical reality.

This is the point I keep trying to get across. It doesn't matter to the tenant if the LL has or hasn't told the lender that they have rented the property out. The repossession process is same. In such circumstances the best thing the tenant can do is attend court, explain their circumstances and ask the judge for time to move out. In the vast majority of cases I would think the judge would take that into consideration.

MissMoneypenny

BobProperty wrote: »

The tenant still gets removed.

You seem to be missing the point. If it was a legal requirement to provide evidence of permission to let, the tenant won't get removed because the LL wouldn't have a tenant in the property.

BobProperty

MissMoneypenny wrote: »

You seem to be missing the point. If it was a legal requirement to provide evidence of permission to let, the tenant won't get removed because the LL wouldn't have a tenant in the property.

You comment doesn't make sense. I'm not missing the point, you aren't understanding it. It doesn't matter if the lender has acknowledged the tenancy or not, if the property is repossessed and the court says that it is to be vacated, it gets repossessed and it gets vacated, tenancy agreement not withstanding.
I repeat there are two contracts here:
Lender - Borrower
Landlord - Tenant
Repossession would occur following a breach of the first. There are consequences for the second contract, but nothing in the second contract can override a court's decision relating to the first.

silvercar

If the lender has given consent to lease or there is a BTL mortgage in place, the lender acknowledges the tenancy. In the event of a repossession the lender can only evict in line with the AST. The tenant should then expect to be given the minimum notice allowed in the AST. So for a periodic tenancy 2 months notice, for an AST still in initial term or renewed this would be the end of the tenancy or a break clause.
Therefore a correct mortgage will allow a tenant a minimum notice period.

Look at recent property auctions, repossessed properties are being sold in some cases with a tenant under AST as part of the sale. In some cases the auctioneer is announcing that the property, listed as with tenant, is now vacant.

With a residential mortgage, the lender will not acknowledge the tenancy, but I would expect at least one letter, probably two, to arrive at the property addressed to the occupier, thereby letting the tenant know that there are mortgage arrears. The tenant could then go to court and plead for time to move, though I would think 14-28 days is realistic. At least in this time they could have kept some rent back to act as deposit on new place.

In the event of a BTL repossession, the lender would instruct the tenant to pay the lender rather than landlord, failue to do so would lead to eviction.

BobProperty

silvercar wrote: »

If the lender has given consent to lease or there is a BTL mortgage in place, the lender acknowledges the tenancy. In the event of a repossession the lender can only evict in line with the AST. The tenant should then expect to be given the minimum notice allowed in the AST. So for a periodic tenancy 2 months notice, for an AST still in initial term or renewed this would be the end of the tenancy or a break clause.
Therefore a correct mortgage will allow a tenant a minimum notice period.

If the tenant attends court they would be given time to get out anyway, see previous posts.
The above quote is the only part I have doubts about. I think there is a conflict of interest if there is a tenant on a long tenancy and the lender takes possession. I think it would get to the absolute letter of the law as to whether the lender has to accept the tenancy versus can obtain vacant possession. Can anyone clarify this? Suppose the lender's small print says "no DSS" but the tenant is on HB for instance.
Consider a tenant in a house worth say £300,000 vacant. They have a long tenancy agreement, say 2 years. It would fetch, say £230,000 at auction now. Does the lender go for vacant possession and sell or do they wait 2 years (in a possibly falling market and get say £230,000 in 2 years time) and just collect the rent? Are lenders even allowed to be landlords? (Mutual BSs have some funny old rules)