Renting without telling my bank - Will the council tell them?

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  • nanapto4
    replied
    Hi Brixtonia she didnt ask i offered it, she isnt going into recievership she stopped the eviction at the last min but we had moved by this point

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  • Hooper
    replied
    nanapto4,

    Ouch.

    How did the landlady justify asking for a year upfront?

    If she is going into receivership presumably you can lodge a claim with the receivers against any remaining equity?

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  • Interlaken
    replied
    Be honest and rest easy. The downside when the bank finds out is not worthwhile contemplating.

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  • Hooper
    replied
    Originally posted by catdog1121 View Post
    Think of it as much as a dilemma as walking into a supermarket and picking up and item and thinking shall I pay for this or shall I just walk out with it...
    More like going into your regular lunch break cafe which has different prices for eat-in (higher) and takeaway (lower). It's a lovely day and all the tables outside are taken so you order and pay for a take-away sausage roll and a cup of tea. As you walk out a table becomes available. You look furtively over your shoulder, sit down and nibble on your sausage roll whilst worrying about whether the staff will either notice or care that you don't have a plate and your tea is in a polystyrene take-out cup.

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  • catdog1121
    replied
    dominoman,

    Think of it as much as a dilemma as walking into a supermarket and picking up and item and thinking shall I pay for this or shall I just walk out with it... What happens when the bank sends correspondence to the address and the tenants send it back marked no longer at this address? Its just not worth the risk... I would also question if you have any experience of letting? im sorry but it is people like you that give landlords a bad name and the reason the government can attack us all and the public yelp with joy.

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  • nanapto4
    replied
    A cautionary tale
    We moved in a rented house in Feb paid a years rent up front and a bond of £650 ,with the intention of staying a long time the LL said it was an investment long term and we were happy ,as She was a pension and mortgage adviser and had worked in an estate agents and she was using their tenancy agreement .When we moved in to the property we had probs with the electrics but she said she had had a full rewire ,so i contacted an Electrician friend who came and advised the plug socket under the sink was wired incorectly and that it was LIVE ,within 2 days of paying the years rent and bond we had a Possesion order from the court stating they were seeking possesion within 3 weeks which she did sort out ,after 6 months of bailiffs debt colllectors looking for her ex partner we decided enough was enough and that come jan we would give a months notice ,She left us without an oven i had to replace the broken one ,one day i mistakenly opened a letter and it was a letter from the bank saying that the dd for mortgage had been cancelled and the bank would be seeking to reposess the house ,All her mortgage statements came to the house we were renting and i used to forward them to her ,We still had 3 months rent paid in full but got another home as we didnt feel secure ,i had tried to phone her but got no reply ,4th Nov a man came looking for LL and her ex partner, I explained that i was THE Tenant he was very pleasant told me not to worry it was nothing detrimental, he asked how long we had left on the tenancy I said till Feb and with that he said his goodbyes and left

    5th Nov we got the letter addressed to the Tenant or occupier from the banks solicitors stating that the house was going to be repossessed on the 22nd nov at 10 15 am
    We received letters from the Courts, Bank, Solicitors .
    I phoned the bank's solicitor and they advised as I was a tenant I should contact the court urgently as we would probably be granted 2 months grace .
    The 8th nov we received a letter stating that as LL had no right to rent the property out as bank held first charge and precludes it being let out, our tenancy was not valid
    I had previously contacted The Estate agent about my bond being refunded and they informed me that it was not with them and explained that i should of had paper work from whichever scheme she had deposited it with within 31 days of us giving it to her, we never had any such notification so i can only assume the deposit was not secured , The day of the Eviction came and i waited outside the house for the bailiffs they didnt arrive, but then we had a text message from her at 3.09 pm asking had we left the house and why there was nothing wrong with the property iand asked for her keys i asked for my bond , later that evening she broke in and changed the locks she is now saying we stole her boiler iand this is a financial adviser i have asked for our rent and bond returning

    We according to the banks solicitors had no rights at all

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  • loanarranger
    replied
    Can I suggest that you be 100% open with your lender, explain that when the remortgage application was made the probability of taking a position overseas wasn't on the horizon . Lenders do take a pragmatic approach to such matters , yes it is going to cost £500 plus 1% on the rate of interest, but given that there are various allowances which can be offset then the next cost to you is negligible.

    As has been correctly stated in the responses , you are going to be required to confirm to a Managing Agent and also the prospective tenant that the property has the consent to be Let by the lender, are you going to compound non disclosure to the lender ( which incidentally is a major breach of your mortgage terms and conditions) by making a fraudulent disclosure to these persons; I think on reflection you will decide that it is best to accept the total advice given to your posting , make a complete and open declaration to your lender and obtain a " Consent to Let" once received you will be able to honestly obtain alternative Buildings Insurance , I say honestly since not advising the Ins Co that you do not have permission to Let Could in the event of a claim result in the policy being voided , with your name flagged on the Insurance Alert system, then where will you be apart from wishing "If Only I had ........"
    Play it right and play it straight.

    Leave a comment:


  • Hooper
    replied
    dominoman,

    I would not risk the insurance. Pretty much the same as not having any at all.

    But I also would not assume that the 2% uplift in the contract means that they won't foreclose. It could just be the rate at which you are charged interest from the first provable time you started letting up until, possibly, foreclosure.

    Leave a comment:


  • jpkeates
    replied
    While it's probably right that the mortgage plus 1% is more than the rent you can let the property at, that's only part of the story.
    You can claim some the interest cost against tax, which is a significant benefit - and the capital element of the mortgage, which is part of the problem (BTL mortgages are usually interest only) means that the tenant is funding the increase in your equity.

    I'd have thought you'd be able to at least break even.

    Two things that will help, though.
    Make sure you confirm in writing to the intended tenant before the tenancy starts (so put it in the tenancy agreement in big red letters and get them to initial it) that this used to be your residence and it is probable that you will return in future and wish to retake possession, and you may, therefore use notice under ground 1 of section 8, Housing Act 1988.
    Get in touch with HMRC - UK tax payers living abroad have to either get the tenant to pay the rent less the basic rate of tax, or HMRC have to agree that they don't have to, in writing.
    That will help if you have to try and move back in unexpectedly.

    Leave a comment:


  • jeffnevil
    replied
    Councils always seem to be able to find out about this sort of thing, it's always best to be open and honest.

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  • theartfullodger
    replied
    Morals can be good or bad.

    Ending up on a mortgage industry blacklist through cheating by breaking contract terms may make getting any further mortgage (residential or B2L) nigh on impossible.

    Experian (?) have a service to spot change of occupants indicating breaking contract. Used by most lenders.

    How would you feel if tenant felt they didn't need to respect contract terms -eg not paying rent, wreaking the place?

    Leave a comment:


  • Darth Wookie
    replied
    Originally posted by dominoman View Post
    ................... But I'm not the only one with this moral dilemma....................
    If you think this is simply a 'moral' dilemma, you are setting yourself up for a serious fall.
    Breaking contracts with people may lead to civil proceedings. Obtaining credit by deception may be a criminal act. Killing your tenants and being uninsured due to invalidation of your claim by fraudulent application may be both. Allowing your prospective tenants to take on a property that may be repossessed through no fault of their own is immoral (there's one you're right about) will land you in court. Need I go on?

    There is nothing remotely moral in your intentions.

    Leave a comment:


  • dominoman
    replied
    Thanks. I realise this is a forum of professionals, so I didn't know if I should even ask. But I'm not the only one with this moral dilemma.

    I have just checked the Mortgage terms. It's Yorkshire Building Society. They state: "The mortgage interest rate on a borrower's mortgage will be increased by 1% where the borrower has agreed with the Society the terms of an authorized let. Where a borrower lets the property and the Society has not agreed to the letting, it will be treated as unauthorized, and the mortgage interest rate on the borrower's account will be increased by 2%.

    At least in the worst case that means it won't be foreclosed I guess.

    My bigger worry would now be that insurance would be invalid if I didn't tell them.

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  • Notyetagain
    replied
    Have you actually asked for permission to let. Most bank agree to it. As far as I know Nationwide are the problem one as they allow it with a 1% increase. The issue you could have is if they were to suspect that you knew you were planning on letting the property when you went for your residential mortgage.

    Leave a comment:


  • mariner
    replied
    As of date of OP, you will not be able to claim ignorance when caught. Lender may not demand B2L for 2 year gap.

    Leave a comment:

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