Letting agents lease agreement

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    Letting agents lease agreement

    Has anyone been in this situation before?

    I have a property in East Lothian, Scotland. It is let to the Council with {Mod - name removed} as the managing agents. I am trying to remortgage the property as a buy to let but the lenders have noticed there is no right of repossession in either the agreement between me and the council or the Tennant and the council. I have contacted them about it and they say that it's not a clause they would add even if it means I would not be able to get a buy to let mortgage and they would lose the property. Is this normal or are {Mod - name removed} being difficult?

    Thanks in advance for any help in advance.

    #2
    You can't add terms after a lease has started unless both parties agree. Presumably you can just keep paying your existing mortgage. I wouldn't make too much of a fuss about this, lest word gets back to your existing lender of the arrangement you've made, and they call in the loan. Did you have 'consent to let'?

    Comment


      #3
      Thanks for the reply. The problem is I am currently looking to remortgage the flat and release equity but the lender states that there needs to be a clause that states the lenders right to repossession. The agents won't add it and they state even if the flat is repossessed the lender would need to honour the lease for its full term. Yes I have a consent to let.

      Comment


        #4
        Do you have consent to let on a non-SaT, not to a human. Does your current lender know your tenant is the council?

        Have you seen the tenancy agreement between your tenant (council) and the occupant (council's tenant, not your tenant)? Surprising if you have.

        Insurers happy with your tenant being council?

        Does tenancy with council go beyond end of current consent to let?
        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

        Comment


          #5
          Originally posted by theartfullodger View Post
          Do you have consent to let on a non-SaT, not to a human. Does your current lender know your tenant is the council?

          Have you seen the tenancy agreement between your tenant (council) and the occupant (council's tenant, not your tenant)? Surprising if you have.

          Insurers happy with your tenant being council?

          Does tenancy with council go beyond end of current consent to let?
          Sorry I am unsure what a non-SaT is. I contacted my current lender and asked for permission to let the property and they said that I could do it for 1 year then I would have to remortgage ad a buy to let.

          I have only been given a blank template of the lease the tennant would have signed. I also got a copy of the AT5 from the council uses as well but Orchard and shipman still say that if I defaulted the lease would still have to be honoured by the lenders.

          Yes, insurer's are happy with it being let to the Council, I had to go with a smaller company as the main insurers wouldn't cover sub let.

          No they both end at the same time.

          Comment


            #6
            There are 2 tenancy agreements.

            You & council. You are landlord, council is tenant. This cannot be, may not be, legally impossible to be an SaT - short assured tenancy. Even if paperwork says SaT.

            Council & occupant. Council as landlord, occupant as tenant. This may be a SaT - but council can use other sorts of tenancy. AT5 suggests it is a SaT.The occupant does not have to leave at it's end and neither you or council can make them, only Sheriff can force them out, likely months.

            The ending of each tenancy is a separate matter, not necessarily lining up on dates.

            Does lender understand your tenancy with council is not an SaT, not a short assured tenancy?
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

            Comment


              #7
              I've been told by the agent that the lease is classed as a SSST which is a Scottish short secured tenancy

              Comment


                #8
                Have you got a copy of tenancy between you & council?
                I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                Comment


                  #9
                  Originally posted by theartfullodger View Post
                  Have you got a copy of tenancy between you & council?
                  Yes but it doesn't state what type of lease it is.

                  Comment


                    #10
                    Please let us know, do you appreciate that there are two separate leases/tenancies here?? One between you & council, the other between council & occupant? Don;t mind what your answer is, just please let us know your answer.....

                    Re...
                    Originally posted by Gavster View Post
                    I've been told by the agent that the lease is classed as a SSST which is a Scottish short secured tenancy
                    Hmmmnnnn.. That may be the case for tenancy between council & occupant: But is so why the AT5 as AT5 is not relevant to SSST.
                    http://scotland.shelter.org.uk/get_a...cure_tenancies

                    Someone is telling porkies..

                    Have you a copy of the tenancy between council & occupant??

                    Suggest you join SaL..
                    www.scottishlandlords.com
                    - then call their helpline...
                    https://www.scottishlandlords.com/Resources.aspx
                    Helpline:
                    Members who require advice on any aspect of their letting business, whether legal or practical please call SAL on 0131 564 0100. Usually you will be asked to leave your details (name, contact number and membership number) and the relevant adviser will call you back. Call backs can be arranged for a time to suit you, including day time or early evening.
                    & do the free LaS courses ...
                    http://www.landlordaccreditationscotland.com/courses/

                    Slàinte mhath!
                    I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                    Comment


                      #11
                      Thanks for the replies. Yes I am aware that there are 2 leases and the lease between the Council and Tennant is the SSST. My understanding is that the ST5 is relevant in the lease between the Council and Tennant, so they can use it to evict the Tennant but in the case of me defaulting on the mortgage the lease between me and the council states that whoever owns the property must honour the full term of the lease. This is where the problem lies. I'll register with the website above and give SAL a call to see if they can provide some clarification.

                      Comment


                        #12
                        If tenancy between council & occupant is an SSST then AT5 is not relevant, would have no effect. AFAIK there is no ST5 notice.

                        Who provided tenancy between you & council?? (Bit late now but..) it should have been checked by a good landlord/tenant Scottish solicitor. Suspect you have a "Common law tenancy" between you & council.
                        http://scotland.shelter.org.uk/get_a..._law_tenancies

                        The lender is simply expecting to see the lease between you & council to have the standard clauses about lender being able to repo... e.g. the free Edinburgh SaT
                        http://www.edinburgh.gov.uk/download...osit_clausepdf
                        has
                        Ground 2
                        The house is subject to a heritable security granted before the creation of the tenancy and-
                        (a) as a result of a default by the debtor the creditor is entitled to sell the house and requires it for the purpose of disposing of it with vacant possession in exercise of that entitlement; and
                        (b) either notice was given in writing to the Tenant not later than the date of commencement of the tenancy that possession might be recovered on this Ground or the Sheriff is satisfied that it is reasonable to dispense with the requirement of notice.....
                        as one of the grounds for repo...

                        No offence but I'm still not convinced you've fully appreciated the implications of the two leases/tenancies and that even if tenancy between you & council allowed repo by lender and that happened through the courts (or indeed if you evicted your tenant - council - through sheriff court) the occupant would likely still be in occupation, have a valid tenancy, stuck....

                        Can't see your council agreeing to a change: You COULD try offering a new tenancy, revised by a good ll/tenant solicitor, at a lower rent. They just might take the bait! Certainly can't see any chance of council/occupant lease/tenancy being changed.

                        I must confess shortly after I started I signed a SaT between me & council (in Scotland) who then sublet to very nice occupant & son - i.e. entirely not an SaT and never twigged the mess I was in.. or that I'd broken terms of the mortgage. After an even worse legal mess I got myself into I started learning: Still learning, still making mistakes!
                        I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                        Comment


                          #13
                          The managing agent provided the lease that I signed and possibly naively I've thought it was just a standard lease. This lease is up in September but as previously stated the agents would not be willing to put such a clause in if I let to them again. They say that they have over 300 properties on their books with all of them having this lease and they've never heard of anyone having problems remortgaging, which I now find hard to believe.

                          For now I'll just have to hope the solicitors dealing with the remortgage can do something, if not I'll register will SAL and seek their advice.

                          Comment


                            #14
                            You are in charge, not the agent. They work for you, you tell them what to do.

                            You may wish to be more assertive about what you require them to do or you could fire them and manage matters yourself.

                            But read the agreement you have with them (the agent) -different from tenancy with council - as it may allow them to continue charging you commission.

                            Nothing to stop you today instructing your tenant, the counci, to deal direct with you from now on & start paying rent direct to you.
                            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                            Comment


                              #15
                              I've just spoken to the Council who say they wouldn't lease from me directly and all their tenancies are through this agent. I've tried another lender to see about a mortgage, so will have to see what their underwriters and solicitors say.

                              Comment

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