Tenant aware that landlord has mortgage arrears- effect?

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    Tenant aware that landlord has mortgage arrears- effect?

    Eviction of tenant when a mortgage is on the property

    Is it possible that a tenant can be evicted because the landlord hasn’t been paying the mortgage.

    The tenant has been faithfully paying the rent each month, though it appears that the Landlord (house owner) hasn’t been paying the mortgage.

    How much notice would the tenant receive?

    Would they receive this from the mortgage company or the landlord?

    I am not sure if the landlord has even informed the mortgage company of letting the house out.

    What grounds does the tenant have in such situation?

    Kind Regards

    Andyman

    #2
    Originally posted by Andyman View Post
    Eviction of tenant when a mortgage is on the property

    Is it possible that a tenant can be evicted because the landlord hasn’t been paying the mortgage.

    The tenant has been faithfully paying the rent each month, though it appears that the Landlord (house owner) hasn’t been paying the mortgage.

    How much notice would the tenant receive?

    Would they receive this from the mortgage company or the landlord?

    I am not sure if the landlord has even informed the mortgage company of letting the house out.

    What grounds does the tenant have in such situation?

    Kind Regards

    Andyman
    Yes. See ground 2 in Schedule 2 to Housing Act 1988.
    T's remedy is against L only (not against mortgagee [lender], which is probably as much a victim!)
    L is in breach of covenant for T to have quiet enjoyment: L is in effect permitting (whether by act or omission) the mortgagee's rights to possession which trample on T's rights.
    Last edited by jeffrey; 20-08-2007, 08:40 AM. Reason: typo
    JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
    1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
    2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
    3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
    4. *- Contact info: click on my name (blue-highlight link).

    Comment


      #3
      Presumably when the level of monthly payment arrears becomes unacceptable, the property will be repossesed.

      Since the mortgage lender prefers to keep the rental income coming in, the tenant will be asked to make rent payment direct to the mortgage lender. So the tenant is safe until the tenancy agreement expires.

      Comment


        #4
        Since i am in the same position with a court hearing on friday this week (that i have paid and requested!) do you honestly think that the lender's solicitor that will also be present agree to us paying them rent? I have already spoken to their solicitor after receiving a letter from them to confirm eviction and they have stated that under no circumstances can they accept anyone to stay in the property. They need it to pay off landlord debts. Off the record i was told by a rep from his mortgage lender that he only owed £4k. If this was paid then the whole eviction for 3 houses of his would stop. The stress i have gone through has been horrific as we seriously have no where to go, none of our families live nearby (closest 250 miles). What can i say at my hearing to make them on my side??? Please advise

        Comment


          #5
          Move out? There must be other rental property around.
          The contents of this note are neither advice nor a definitive answer. If you plan to rely on this, you should pay somebody for proper advice.

          Comment


            #6
            Originally posted by Grange View Post
            Move out? There must be other rental property around.
            But why should a wholly-innocent tenant be inconvenienced in this way, by having to move during a fixed-term tenancy?
            JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
            1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
            2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
            3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
            4. *- Contact info: click on my name (blue-highlight link).

            Comment


              #7
              i agree that we shouldnt have to move out. We have 2 children to think about who are due to start first school in sept. Why should they start one school which is daunting enough to star another one further away. We have tried to find somewhere for 2 weeks no no avail. i feel sick with stress that its causing the whole family upset. I have no family nearby that can help either. we went out, got a mortgage and in the process of buying a house because of this issue so we have done everything that was possible. i have spoken to everyone possible for advice etc to no avail.

              its easy for someone to say move out - you come find me a house to live in within this time scale around this area and i will move!

              Thanks to jeffery for your reply. I see you give good advice, please help with more info if you can about what i can do to help my part on friday at my hearing.

              Comment


                #8
                Could be wrong but doesn't this depend on whether the landlord obtained permission to let from his lender?

                With permission the tenant will get notice under ground 2. (I think this is two months notice that can expire before the fixed term and can only be of use where the mortgage predates the tenancy.).

                Without permission, if the mortgage predates the tenancy, the tenant doesn't have any rights, the lender can ignore the tenancy.

                That's what I thought... but I'm not sure.

                The landlord will be in breach of the AST contract but that may be as useful as a chocolate teapot if the landlord is broke (presumably he is in financial difficulties or he would have paid the mortgage).

                If the tenant's deposit isn't in a deposit scheme then I'd think about how I was going to get that back. If there is an agent involved make sure they know NOT to hand the deposit to the landlord. Be wary about paying rent in advance that you may not be able to claim back or get the use of by staying...

                Do let us know how you get on. I hope it works out.
                ~~~~~

                Comment


                  #9
                  Originally posted by rachelzander View Post
                  Thanks to jeffery for your reply. I see you give good advice, please help with more info if you can about what i can do to help my part on friday at my hearing.
                  Also, could you afford to make an offer to buy the house from the mortgagee (lender)?
                  JEFFREY SHAW, solicitor [and Topic Expert], Nether Edge Law*
                  1. Public advice is believed accurate, but I accept no legal responsibility except to direct-paying private clients.
                  2. Telephone advice: see http://www.landlordzone.co.uk/forums/showthread.php?t=34638.
                  3. For paid advice about conveyancing/leaseholds/L&T, contact me* and become a private client.
                  4. *- Contact info: click on my name (blue-highlight link).

                  Comment


                    #10
                    Hi, no we are unable to buy this property as its too much out of our price range plus it is so called "sold" so the landlords states. he sold it to his friend, they have had the surveyor round etc. thing is,i have spoken with the lenders solicitor and they say he is not allowed to sell as they are in process of repossessing should he not pay his £4000 debt, which he refuses to do!!!

                    The house we are buying has already started going through and have no intentions of looking for another. we just want to be able to stay in this property until ours is ready which is what we were initially doing until all this mess.

                    Jeffery... do you think we will be allowed by the judge to stay in the property?

                    Comment


                      #11
                      Open question:

                      Would be it ever be possible for a LL to use mortgage arrears as a back door to evicting tenants...once they are evicted the landlord comes up with arrears payments and gets his house back with vacant possession?

                      Rachel; have you contacted Shelter for advice or housing services at you local authority?
                      All posts in good faith, but do not rely on them

                      * * * * * ** * * * * * * * * * * * *

                      You can search the forums here:

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                        #12
                        Hi, in reply to your questions, i dont think the LL can do that as there is a court order on the house therefore if we are to be evicted then the courts have possession of the house which will have gone to far i would have thought for the LL to getback.

                        I have contacted the local council who say they would help but with a hostel. i really dont want this for my children, i want to be able to stay where we are for the sake of them.

                        Comment


                          #13
                          Well i had the hearing this morning!

                          It never went our way!!! I find it so sad that after the amount of people who rent properties, they all have NO rights.

                          So i came out of court in tears as this was our last hope of having a roof over our heads. Having also found out that a previous notice was issued in May before we moved into the property which the landlord had a notice of eviction for beginning of August!!! Would have been nice to have been told this before we signed the 6 month contratc. Judge stated that he had no legal rights to help me out and that i could only contact the Landlords lender to see if they would let us stay a little longer as a goodwill gesture.

                          Anyway, i have contacted them and they got back to me quickly sharpest, after having heard me blubbering down the phone. They said that the lender has received a payment covering the arrears this morning and all action will be stopped shortly. So i have been trough all this for nothing! We have until our house completion to stay in the property YAY!

                          The judge did state that i am eliable to claim compensation but i am unsure how to go about this and what i request etc. If someone could help me out once again with this bit of advice i would appreciate it alot.

                          Many thanks to all of you who gave me advice. And anyone wanting advice, dont rent unless you really have to cos its not worth your while and heart ache if something goes wrong

                          Comment


                            #14
                            Rachel - sorry for the undue stress you have had to go thru but excellent news that you can stay until you have completed on the purchase of your house.

                            Hopefully someone will be along with some good compo advice soon. x

                            Comment


                              #15
                              We were in a similar situation. Moved into a new flat in Woolwich then found out that the landlady hadn't paid her mortgage since November 06 so the mortgage company started proceedings for repossession. She also had our deposit so the letting agents kept a month's rent as our deposit as we would obviously have never got it back. They also let us stay there rent free until we found somewhere else to go, all we had to do was deal with the cheeky landlady banging on the door demanding to know why we hadn't paid our rent! Probably not the best way to go but worked out for the best in the end as it was too far to travel to work and I don't particularly like cockroaches!

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