Tenant aware that landlord has mortgage arrears- effect?

[jeffrey]

I haven't given this much thought, but it seems to me that the contract ended when the court gave M possession. Your contract with L has been frustrated, L is incapable of keeping his side of the bargain.

Perhaps one of the lawyers here can confirm.

It's not quite that simple. For instance, L could theoretically make full payment to B, so the Order might never take effect.

[Swallow]

Agent still involved

Just curious here, does the agent still represent the LL in this situation?

Just to respond to JTA: Yes, the agent still represents the LL but, like the court, seems to have trouble contacting him!

This experience has demonstrated that Tenants should really check with their LL, prior to letting, to make sure that they have a legal BTL mortgage - surely the agent should be enforced to check, else they are selling "illegal" tenancies...
Even if it is a BTL mortgage, it seems that the tenant has no protection on repossesion (especially if they have paid rent in advance) as the lender is highly unlikely to write-in specific tenancies into their mortgage contract.

[paulaosbourn@aol.com]

Can I give Notice to L? She's in mortgage arrears

Hello everyone,

I deperately need advice on serving a notice to quit to my landlady. Here's why:

I moved into the property on 7th April '06 via a letting agency. Paid up front a months rent and a bond. By the December of that year the landlady wasn't happy wth the letting agents services so she came round one day to say that I should pay the monthly rent into her bank account. No new tenancy agreement was signed or anything, not even a verbal agreement. That was the last time I saw her!! So every month I have been paying the rent on the dot. On the 17th November 08 i received a letter from a solicitor stating that a notice of possession of the property has been served and the case is to be heard on the 22nd of december 08. This is to do, i think, with my landlady not paying the morgage. I CANNOT get in touch with her whatsoever to really get an understanding of what exactlys going on. I've decided to move out and found a property to rent not far from where i live so i need to serve a notice to quit also to get my bond back. its completely ruined my christmas as it's been really stressful trying to get answers from anyone. Unfortuantely i don't qualify for legal aid so if anyone could help i'll be most greatful!!!!

[Paul Gibbs]

if possession is being sought by the mortgage company then you are in difficulties to stop the possession claim.

I would contact the mortgage co and see if they are happy for you to stay there as a licencee until its sold - you can pay rent direct to them.

If you want to give notice then you sound like you have a periodic tenancy so 2 months notice required in writing. Might be wise to see if she agrees an early surrender if thats what you want - but document it in writing so its clear.

sorry if this is a bit garbled in a rush to get out the office!!!

[PaulF]

You probably won't need to serve any Notice as the matter is in the hands of the courts now, and you might want to contact the lender if you know who it is. You could offer to pay the rent directly to the lender and they might let you stay. They probably won't want another property to sell in the present market.

Contact the court or the solicitors from whom you've received papers and see what you can find out. You might want to attend the court hearing if you are near, but it is unlikely to affect the outcome unless an arrangement has been agreed with the lender beforehand. There should be some superior advice from the legal eagles here!

[bunny]

[QUOTE=Paul Gibbs;106666]If you want to give notice then you sound like you have a periodic tenancy so 2 months notice required in writing. /QUOTE]

I can't advise on the repossession issue but in respect of your notice, if you are on SPT (statutory periodic tenancy) then you need to serve one month's notice to end on the last day of rental period. If your rent is paid monthly on the 7th of each month (based on the info you provided) and you serve notice in writing now then you are liable for rent up to 6th February as you have missed serving notice (just) for it to end on 6th Jan.

Do you know who your landlady is, in terms of her address I mean? In your tenancy agreement there should be a reference to S48 in respect of who and where to serve notices to. What does that say? Does it state that notice should be served on the agent or the landlord and whose address is it?


I understand from your post that you want to move out as you have found somewhere new. I can't advise you much further in respect of you ending the tenancy any earlier other than what I have said above. You may be able to agree with the landlady early surrender but that's if you can track them down.

Post back with more info and I am sure others more knowledgeable about repos will post more advice.

[louey42]

Tenancy Deposit - Landlord Mortgage Default

Hi,

My landlord has recently defaulted on his buy-to-let mortgage (a letter came through from the receivers), and I am unsure as to where I stand with regard to the deposit I paid. Unfortuantely the deposit is not subject to one of the newly introduced 'government schemes' as we have been tenants since Feb' 2007...

Has anyone been in a simlar situation? I am unsure as to whether I should refuse to pay the rent in order to recoup my deposit, however I am worried about being 'black listed'. The contract we are on was a rolling monthly contract.

Any advice/suggestions much appreciated.

Thanks!

[thevaliant]

In theory, you should ignore the fact that your landlord's property is being repossessed, with the exception that you may have to move out very soon (they may require vacant possession).

Practical realities suggest that if your landlord can't pay his mortgage, you won't be seeing your deposit. Not paying your last months rent is a bad idea, but if you really suspect you won't be getting it, it is your only hope of recovering the deposit.

[PaulF]

I wouldn't be quite so defeatist. After your evicition or vacation whichever comes first, you should use the Small Claims Court to try and recover your money. It's the only way you can do so, unless you stop paying the rent, which is something I would seriously consider, as it won't stop the premises being repossessed even if you withhold it.

[humbleone]

Whatever you do stop paying anything to the landlord. There is no 'blacklisting' to worry about, nor should there be any other consequences. I manage properties and have had this happen twice with landlord clients. They never informed us of the problems and the first we find out is when the tenant recieves a letter from the creditor saying they are taking the house back. Our tenant clients on both occasions were advised not to pay anything further, and to make their details available to the bank to show willing. There has been no comeback on either tenants since repossession, and nor should there be. Remember you are now a victim in all this, being forced from your home for no fault of your own.

[louey42]

Hi, thanks for all the advice.

The letter I received from the receivers stated they effectively became my landlord, and all future rent should be paid to them. I (regrettably now) provided them with a copy of my tenancy agreement and am waiting to hear from them. Effectively therefore all that has changed is who I pay the rent to...

I assume that in a 'normal' tenancy the landlord can file a CCJ against the tenant if the rent is not paid (what I effectively meant by 'blacklisting'), so I am concerend by failing to pay the same could still apply, i.e. the receivers file a CCJ which blemishes my credit rating.

Does anyone have any experince of this? Which action could the receivers take against me if I failed to pay?

[jeffrey]

Receivers do NOT become your L.

A 'receiver' is merely an agent appointed by a creditor (usually, a mortgagee/Bank) to protect its security and recover debts which the debtor/borrower (your L) owes to the creditor. It is a representative, not a replacement, although it does have power to direct other parties (e.g. you) to pay the receiver instead of the debtor (your L).

[Seminole]

Tenant aware that landlord has mortgage arrears- effect?

Does anyone know whether a landlord's failure to notify their mortgage company that they have let the property, is grounds for voiding a tenancy agreement?

We have become aware that our landlord has 3 months arrears on the the mortgage on our property. We have just taken out a 30 month Assured Shorthold Tenancy with a 12 month break clause.

We're concerned about our lack of rights if they haven't disclosed the letting of the property to the mortgage company. We want to work with the landlord to help them resolve their problem but are wondering what the position is if they haven't disclosed and we want to get out. In other words, in these circumstances can we walk away from the tenancy?

[MrJohnnyB]

The lease is null and void if all with a legal interest in the land have not informed and approved any proposal to let the property. I also think it amounts to fraud or something similar. Not too sure on the specifics of AST's.

But basically think an AST creates a legally binding contract between you and your immediate landlord, and not between you and the land. Ie if it was a commercial mortgage which was pre-approved then obviously it would tie to the land and the bank would have to honour it. As I soley deal with commercial premises I cannot be 100% I believe the bank would just be able to kick you out if they obtain a possession order.

[Seminole]

Thanks for this. That's pretty much what we thought.

We have just heard that the letting agent believes that there is a buy to let mortgage in place and that gives us some assurance. We will still be asking for confirmation in writing though!