What about the tenants?

Caz · 21-02-2009, 21:04

Buy-to-let landlords hit hard by recession - Mortgages, Money - The Independent

An article about buy-to-let landlords being in the poo due to the recession.

Nowhere in the article does it mention the position of a private tenant if it goes belly up.

Just wondering where myself and others would stand if mortgage companies repossess tenanted houses? Assuming they would evict, as they would want to sell the properties.
Anyone know anything about this. If you get an eviction notice out of the blue, are there any extra rights, seeing as you are not at fault? Would there be extended time to find yourself another home, rather than the average 4 weeks, whilst paying rent to the mortage company?

andrewb · 21-02-2009, 21:10

If your landlord can't pay the mortgage you will probably be kicked out within a week, although no notice even has to be given as it's likely that they won't bother doing it if they've just lost the house.

In my opinion government should step in here and give people extended time to find a new house.

Caz · 21-02-2009, 21:12

I know the landlord wouldn't have any say, if he/she has just lost the house. It's the mortgage lender I'm on about. There must be some legal rights in place surely?

andrewb · 21-02-2009, 21:13

As far as I know, no. Perhaps somebody can correct me.

lancsdave · 21-02-2009, 21:17

There was an article about this on the BBC news this morning;

BBC NEWS | UK | Call for tougher tenants rights

Royboy39 · 21-02-2009, 21:20

Quote:

Originally Posted by Caz

I know the landlord wouldn't have any say, if he/she has just lost the house. It's the mortgage lender I'm on about. There must be some legal rights in place surely?

In the current climate i would suggest that an approach is made to the lender...the mortgage payments may be considerably less than the rent that is paid.

If the house is about to be reposesed I am sure the lender would rather have a sitting tennant than an empty property and farm the house out to a letting agent.
Consult with the local CAB and they will ensure you get the best deal.

turkishdelight · 21-02-2009, 21:21

Quote:

Originally Posted by Caz

Buy-to-let landlords hit hard by recession - Mortgages, Money - The Independent

An article about buy-to-let landlords being in the poo due to the recession.

Nowhere in the article does it mention the position of a private tenant if it goes belly up.

Just wondering where myself and others would stand if mortgage companies repossess tenanted houses? Assuming they would evict, as they would want to sell the properties.
Anyone know anything about this. If you get an eviction notice out of the blue, are there any extra rights, seeing as you are not at fault? Would there be extended time to find yourself another home, rather than the average 4 weeks, whilst paying rent to the mortage company?

Thats an interesting question nothing i would have thought about i guess the morgage company would hopefully have some consideration especially for indivduals with children. I am almost certain their would be some legal rights on your side for extended time. Very interesting .I will check this out on Monday and let you know.

Caz · 21-02-2009, 21:28

Quote:

Thats an interesting question nothing i would have thought about i guess the morgage company would hopefully have some consideration especially for indivduals with children. I am almost certain their would be some legal rights on your side for extended time. Very interesting .I will check this out on Monday and let you know.

Well that is what I was hoping, especially in the current climate. Mortgage companies aren't usually known for being smpathetic though are they? Will be getting on to my Agent and see what she can find out about my landlords position.

Quote:

If the house is about to be reposesed I am sure the lender would rather have a sitting tennant than an empty property and farm the house out to a letting agent.
Consult with the local CAB and they will ensure you get the best deal.

That is what i was thinking roy, no harm in a tenant staying there paying rent, maybe even until a buyer is found.

Not in that position yet though as far as I know, but CAB is always my first port of call if I have a problem, they've helped me with things in the past.

Did go last a couple of weeks ago about something, but they had no appointments till March, just 10 mins at a drop in, got sorted though.

Caz · 21-02-2009, 21:46

Just found this:

A decade of soaring house prices has priced many people off the property ladder, and the current credit crunch and lack of mortgage credit means increasing numbers of people are opting to rent rather than buy. In many ways, renters may seem immune to the rise in the number of repossessions but, if their landlord is one of the many borrowers forecast to default on mortgage payments, then they are still at risk of losing their home.
Citizens Advice says tenants are the hidden victims of the credit crisis, as they could find themselves forced out of their home The latest figures from the Financial Services Authority (FSA) show that the number of possessions (where a lender, having been granted a possession order by a court, is able to sell the property and use the proceeds to reduce or pay-off the debt) has increased by 71% since last year, and with 312,000 mortgages is arrears at the end of June, this figure is expected to increase going forward.
The Government has introduced new legislation designed to protect homeowners from repossessions. Under new rules that come into force on 19 November 2008, mortgage lenders on the verge of repossessing a property will have to demonstrate to the courts that they have explored all other options before they are given the green light.
But despite this additional protection, repossessions are likely to continue to rise, as the pending recession, rising unemployment and mortgage payment shock continue to hurt households across the UK.
With that in mind, what protection do tenants have if their landlord fails to keep up payments on a property and their home is repossessed?
Sadly, tenants have very little rights at all. If a lender is given possession of a property by the courts then most tenants have no automatic right to stay in it. But it largely depends on the rental agreement in place.
The vast majority of people who rent from private landlords will have an assured shorthold tenancy (AST), as this has been statutory since 28 February 1997.
Your tenancy will either be fixed-term, which is usually from six months to one-year, or it might be a periodic tenancy that rolls on a week-to-week or month-to-month basis.
If you are within your fixed-term AST when the property you rent is repossessed then the lender must honour that agreement. So, if a bank, building society or other type of lender takes possession of the property, then they have to continue to act as your landlord and appoint a receiver of rent.
As long as your fixed-term AST lasts you cannot be evicted from the property. However, once this expires, you right to stay in your home comes into doubt.
Steve Hilton, spokesman for the National Landlords Association (NLA), says that on the day that your fixed-term AST ends the lender (or whoever is in possession of the property) has the right to issue you with a Section 21, which is your notice to vacate the property within two months.
If your fixed-term AST has already expired by the time the property is repossessed (i.e. you are on a periodic tenancy contract that rolls on either week-by-week or month-by-month) then the lender has the right to issue you with a Section 21 notice immediately. Again you'll have two months notice to vacate the property.
If your landlord's mortgage on the property was not a buy-to-let deal, or they didn't have permission to rent it out by the lender, then you have fewer rights. The lender can take possession of the property and issue a Section 21 immediately, again giving you just two months before you must leave.
Remember, you cannot be issued with a Section 21 unless you have been in situ for at least six months - this is your statutory right.
If you remain in the property for more than two-months after a Section 21 has been issued then you will be considered an unlawful occupant, and you risk being evicted by the bailiffs and potentially criminal proceedings. Although no separate court hearing is needed, you must be receive written notice if a bailiff is appointed.
There are exceptions, however. Citizens Advice says that, in very limited circumstances, your tenancy may be binding on the landlord's lender.
This means the lender will become your landlord after the repossession and will need a separate court order to evict you. This might occur if you were living in the property before your landlord took out a buy-to-let mortgage.
A glimmer of hope?
Bernard Clarke, a spokesman for the Council of Mortgage Lenders, says tenants should bear in mind that the current market conditions (that is, very low levels of housing transactions and falling house prices) might persuade lenders to 'hang fire'.
"An increasing number of lenders may decide to keep possession of the property rather than look to sell it," he explains. "Keeping the pre-existing tenants in place means they can still make money off the property to put towards the mortgage debt."
Hilton, of the NLA, agrees: "I expect some lenders will look to hold onto properties in their possession and wait for house prices to rise".
If you do find yourself in the unfortunate situation of potentially losing your home as a result of your rental property being repossessed, then the advice is to continue paying your rent as usual.
If you fail to pay your rent for more than two months in a row, then your landlord (or the lender in possession of the property) can issue you with a Section 8 notice - giving you just 14 days to vacate your home.

I'm still within my AST anyway, and it seems I should have 2 months after that, unless I read it wrong?

accyman · 22-02-2009, 05:32

my friends flat has just been taken over by the recievers or whatever working on behalf of the mortgage lender and the tennancy is continueing as normal depite the fact the landlord wasnt paying the mortgage on teh property and was infact blowing teh rent paid on god knows what

as the house market is n such decline and mortgages arnt as easy to get what most agencies are doing when reposessing a property is continueing to keep the tennant in as rent been paid is better than no mone coming in at all

if they decide to sell the property there is a required amount of notice which im sure google or citizens advice can find for you

also if a tennant is in teh house im pretty sure when they buy the house they have to honour the rent agreement

Caz · 22-02-2009, 13:59

Info found....post 9..

Lets face it, even squatters seem to have more rights than one week's notice. I don't necessarily take notice of what the media says if I think it can't be right.

. Scaremongering if you ask me.

I don't have a problem with moving by the way, you take that risk as a private tenant anyway, that your tenancy could come to an end and you have to move on. Just like to be asssured that there are some rights there, and it seems there are.