Sub letting means higher mortgage repayment?

tom_dog

Hi folks,

[FONT=&quot]I'm currently renting a 2 up, 2 down property with 2 others. The house is in the process of being sold and is near completion and as far as I know we'll be able to stay. However, when we first took on the tenancy, the agreement was only for 2 people. Since then a third person moved in with the landlords consent, although the agreement remained with only 2 people on it and our rent was unchanged.

I spoke to the estate agent the other day for an update on the sale and he told me that there was a possible complication with the tenancy agreement. Apparently if the new landlord, and their solicitor, draw up a new tenancy agreement for 3 people the mortgage lender will raise the landlords mortgage repayment, and therefore our rent, by a considerable amount. Is this true or is the estate agent concocting an excuse to soften the blow for our imminent rent rise?

Also, if the landlord decides to keep the tenancy agreement for only 2 and we continue to sub let the other room with the landlords consent, then I assume there'll be some sort of legal risk for the landlord?

Any advice gratefully received.[/FONT]

lil_me

It becomes a HMO so would likely cause issues with the lender because of that, AFAIK the HMO doesn't apply with just 2 tenants but does apply with 3 or more. HMO must meet specific standards and need a licence.


http://scotland.shelter.org.uk/advice/advice-2750.cfm

http://www.bhphousing.co.uk/hsgprivat.nsf/61b63a407eca7a438025663c0065cadd/0d642343ac5464e3802571af004de195?OpenDocument

tom_dog

Thanks for reply.
That makes things more interesting as one of the other tenants is my brother!
Does that count as a 'member of the same family' according to HMO?

*edit* Just checked Government website on HMO and there are still "three or more tenants who form two or more households" so the landlord will still need an HMO license.