Dilemma – insurance claim required but no consent to let

Dilemma – insurance claim required but no consent to let

7:51 AM, 20th September 2013, About 8 years ago 20

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I have been reckless in not informing my mortgage lender that I’m renting my property out, however my most recent tenants have left the place in a state and I need to claim on malicious damage.

I’m concerned firstly that my insurer will contact my mortgage lender, and secondly if they do inform them, what are they likely to do?

Luckily there are no tenants in there at the moment so no one can be evicted, but can my house be repossessed?

I’ve never missed a payment, however the mortgage does have a guarantor on it.

My final concern is if the mortgage company demand repayment or switch my mortgage to a buy to let or black mark me, will this affect the guarantor as well or just me?

My thoughts are to stay away from the insurer and just foot the bill for the damage caused?

On another note, I would like to do things properly and request permission to let. If the mortgage lender says yes, is there any way of them finding out that I’ve already been renting it without consent?

In an ideal world id like to do the right thing with as little consequence as possible, whilst I know some mistakes will have to be paid for, if anyone has any advice on all the above I would be eternally grateful!! Dilemma - insurance claim required but no consent to let

Thanks

Jenifer



Comments

by Jay James

15:45 PM, 20th September 2013, About 8 years ago

Hi Jennifer

The suggestion that you get the above matters sorted out whilst you do not have tenants is a good idea.
It reduces the chance of being in further breach of your mortgage.
It also gives you an opportunity to make yourself aware of other landlord responsibilities, with less chance of incurring the penalties that go with failing some of these.
--
You could move back in if this would mean meeting the terms of the mortgage.
Check if moving back in would be within the terms of the insurance.

You can always move out again if you get a BTL mortgage / lenders permission to let.
--
Is the insurance for having tenants, or was it taken out on the basis of you occupying the property?

What is the cost of making good the damage to your property?

Do you have the current address for the ex tenants, such that you could consider suing them for the damage caused?

Could you afford to make good the damage yourself?

Handling matters in a dispassionate / business like way will create less stress for you.

by Yvette Newbury

16:08 PM, 20th September 2013, About 8 years ago

But is this a leasehold property or freehold? If leasehold, I could comment further...

by Jay James

16:23 PM, 20th September 2013, About 8 years ago

Reply to the comment left by "Yvette Newbury " at "20/09/2013 - 16:08":

Hi Yvette.

That got me thinking because I have a leasehold property that I may yet let out in the years to come.

What difference could this make to myself?

On second thoughts, please leave that for another thread, as it may cloud the issues for Jennifer.

by Jenifer Aldridge

16:58 PM, 20th September 2013, About 8 years ago

Hi all, thanks for all the advice it's been great. Thankfully I did have the sense to take out Landlords insurance for both buildings and contents, I've lodged the claim and seen the loss adjuster who confirmed malicious damage would not be covered so I am having to foot the bill myself. He did say he will file the claim back to the insurance company though and await their decision, so the insurance company are still going to see a report that may be passed onto the mortgage company, however I don't think it will total more than £500 worth of damage so fingers crossed the lender won't need to be involved.
Stupidly when I first rented the place I did request permission to let, they sent the forms and I failed to return them with a simple £250 fee! I wish I had paid it now! I called again about 6 months ago and this time they wanted to do a full credit risk assessment for a BTL mortgage which I know full well I cannot afford the rates on.
Is there any way I can get the lender (C&G) to agree to the permission to let rather than BTL again?
My plan is to sell anyway in spring but will need to let it for a short term until then to cover the current mortgage, and indeed I would like to sleep at night before then if at all possible!
Unfortunately I'm a tenant myself and move due to a re-location for work so I'm unable to move back into the property, had that been an option I would jump at the chance but the proximity of my current job and residence is too far to commute to consider moving back an option.
Thanks again for the responses,
Jenifer

by Jay James

17:07 PM, 20th September 2013, About 8 years ago

Reply to the comment left by " " at "20/09/2013 - 16:58":

Please can the prfesssional Lls on here comment on what I say next to Jennifer.
--
You can legitimately move back int o your property.
If you then chose to lodge (can you lodge near work instead of rent a whole property, its cheaper) elsewhere during the working week / all week, so what?
I did that whilst I had a house, its not breaking a mortgage contract.

Perhaps you could get lodgers instead of using ASTenancy in your house as Mark suggested.
That gives you more control over what goes on in your home and if you do pop back now and then, you can go to most places in the house without warning.
--
If you do chose to move into your home and take in a lodger or two, be sure:
1 that you meet insurance contract terms, and
2 that you really do move back in and not just say you have, even though you may chose to sleep near work.
--
Could you reconsider to selling now?
It may be worth approximating what monetary difference that would make to you.
--

by Yvette Newbury

17:20 PM, 20th September 2013, About 8 years ago

I doubt C&G will agree to anything other than try to switch you on to a btl mortgage, considering no doubt you are on a super duper residential rate?

But I doubt the insurers would liaise with your mortgage provider unless there was a huge claim. Why would they need to? Even if they did, I don't see a reason why they should mention how the damage occurred so may not find out you were renting.

Given that you are considering selling next year, you could try a variation on what Jay Jay is suggesting. If you rent 1 or 2 rooms in your house to lodgers, then who's to know whether you are actually there or not in the week? This would certainly be a good short term idea, in my opinion.

by Jay James

17:25 PM, 20th September 2013, About 8 years ago

Reply to the comment left by "Yvette Newbury " at "20/09/2013 - 17:20":

re paragraph 3.
exactly.
I should have been less circumspect.

by Mark Alexander

17:26 PM, 20th September 2013, About 8 years ago

Reply to the comment left by "Jay Jay" at "20/09/2013 - 17:07":

As Jenifer is a home owner, assuming the property has at least two bedrooms, then of course she can have a lodger. It matters not that she's away most of the time, or that she rents a place elsewhere. That may well be the answer to this dilemma.

by David Sweeney

19:00 PM, 20th September 2013, About 8 years ago

I wonder if Jenifer is claiming her mortgage interest against tax? If not, then the difference in interest rates may be less damaging if she looks into doing that.

by Marilyn Solomon

20:51 PM, 24th September 2013, About 8 years ago

Hi Jennifer

I'm with C&G and managed to obtain a 'permission to let' with no mention of BTL. I had a change to my circumstances 2 years ago (had to move away to care for elderly parent), they couldn't exactly say no. I think because the move was deemed for non-commercial reasons (I didn't set out to be a LL) they might take a different view. In your case, you've got to go where the work is in order to keep up with your mortgage payments. It at least strengthens your agreement. Just a thought.


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