Would you allow an investor to AirB&B your flats ?

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    #16
    @KTC

    Letting to any tenant on HB when the mortgage terms prohibit it is fraud.
    This on the basis that when the mortgage contract was signed the borrower accepted those conditions.
    The borrower was assessed on mortgage suitability on the basis of not renting to HB tenants.
    For a LL to then take on HB tenants is fraudulent activity.
    Obtaining a mortgage under false pretences.
    That is mortgage fraud which is a criminal offence.

    Lenders will take action against LL who do breach mortgage conditions as evidenced by the recent Nat West debacle.
    The fact that Nat West have now changed their conditions was only as result of the negative publicity over the HB tenant restrictions.
    Personally I feel that that Govt should ban all lenders from having HB restrictions.
    HB is Coin of the Realm just as much as normal wages.
    The fact that taking on HB tenants raises many business issues is a completely different matter.
    LL declining HB tenant is NOT indirect discrimination and NEVER will be.
    You simply cannot force LL to take on HB tenants at the outset of a tenancy.
    LL are ENTITLED to take a business view on who they take on as a tenant.
    i will ALWAYS discriminate against certain types of HB tenant.
    There are many HB types which would make excellent tenants from a purely BUSINESS perspective.
    HB tenants are not protected characteristics.
    LL are NOT not for PROFIT BUSINESSES!!!!!
    But for the majority of leveraged LL HB tenants are a very poor BUSINESS proposition.
    That is NOT to say that HB tenants are bad people.
    Most of them aren't.
    But they are subject to the HB process which is dysfunctional and NOT fit for purpose.
    In conjunction with UC the whole issue of HB tenants means very few LL wish to engage with the dysfunctional process.
    LL and HB tenants alike are VICTIMS of the system.
    This causes LL to avoid HB tenants.
    There is also not the small issue that few HB tenants can even afford the market rents that LL require.
    LL CANNOT be forced to take on HB tenants who aren't able to afford the market rents that so many LL now require.
    The situation is set to become far worse as many LL are having to further increase rents as a consequence of all the other costs burdens being imposed on LL.
    Inevitably this means that fewer LL will be prepared to let to HB tenants.
    This is not the fault of the LL.
    It is the dysfunctional system that is to blame here.





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      #17
      Your logic and understanding of the law need some work. I asked for specific references to the legislation to back your arguments up, not just a basic repeat of what you said.

      Fraud in England and Wales is a statutory offence under the Fraud Act 2006. It's broken down into three classes - fraud by false represetation, fraud by failing to disclose information, and fraud by abuse of position.

      Obtaining a mortgage under false pretences is indeed fraud, by false represetation or failing to disclose information. However, just breaking the terms and conditions of an existing loan is not, that's just a breach of contract.

      The test applies when those acts were done. If somone is applying for a mortgage on the basis that they're going to live in the relevant property as their home when in fact they intended to let it out from the beginning would satisfy the test. Using people who let out AirBnB as the example given the origin of this thread, most of those involved are or have genuinely lived in the property as their home, and had no intention to let it out when they applied for the mortgage.

      You're jumping from a person breaking a term of a contract they're a party to, to they necessarily intended to do that when they made the application for the loan. The real world doesn't work like that.

      LL declining HB tenant is NOT indirect discrimination and NEVER will be.
      If you're so sure, please volunteer to be the test case defendant when this inevitably goes to court in the future.

      LL CANNOT be forced to take on HB tenants who aren't able to afford the market rents that so many LL now require.
      That's not what was mentioned. We were talking about a blanket ban against everyone who are in reciept of benefit, not the considered decision on the individual facts of a particular case whether someone total income mean they can or cannot afford to rent a particular property given how much the rent is.
      I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

      Comment


        #18
        Originally posted by paulgbar666 View Post
        @KTC Letting to any tenant on HB when the mortgage terms prohibit it is fraud.
        This on the basis that when the mortgage contract was signed the borrower accepted those conditions.
        The borrower was assessed on mortgage suitability on the basis of not renting to HB tenants.
        For a LL to then take on HB tenants is fraudulent activity.
        Obtaining a mortgage under false pretences.
        That is mortgage fraud which is a criminal
        There is no crime of “mortgage fraud”, there’s Fraud, which has three “branches”.
        Breaching a mortgage term isn’t a crime, but it might possibly be a fraud.

        But fraud has to be “dishonest”, which is quite a tough test.

        For example, taking out a mortgage and then later breaking a term is only possibly dishonest if the person knew that they were going to break the term and knew that when they signed the agreement.
        They’d have to be aware of the term and “gain” from the fraud.
        But if they didn’t know that they would in future breach the term, dishonesty is probably impossible.
        Gain is really tough in this case, for example, because there’s no gain beyond the normal rent a landlord would receive anyway.
        If a tenant paid more rent because their circumstances breached the terms there might be a possible case.

        Because something breaches terms and conditions doesn’t make it a crime. There’s a significant difference between not legal and a crime.

        Criminal law is very specific to the facts of any particular case, so it’s unlikely to be possible to be definitive about what is and isn’t a crime, but have you ever heard of anyone being charged with mortgage fraud for letting to someone on benefits?


        When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
        Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

        Comment


          #19
          The gain or loss part are actually pretty easy to satisfy, the person merely has to intend to make a gain for himself or another, or intend to cause loss to another or to expose another to a risk of loss. The actual gain or loss doesn't even have to happen, just intention is enough. Letting something out carries with it an intention for the landlord to gain rental income. Even if the tenant never pay their rent, the intention of gain is there. That's not even thinking about he loss or risk of loss to the lender.
          I am not a lawyer, nor am I licensed to provide any regulated advice. None of my posts should be treated as legal or financial advice.

          Comment

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