Eviction by Bank for landlord mortgage arrears?

by Readers Question

10:39 AM, 18th October 2017
About A year ago

Eviction by Bank for landlord mortgage arrears?

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Eviction by Bank for landlord mortgage arrears?

What would the 118 community advice in this situation?

My niece, single mum with a 2 year old child, has been renting a 2 bed flat for 2 years via a letting agency. She’s always paid her rent on time and the flat is spotless.

A few days ago she received a letter from lenders solicitors, addressed to her landlord and the ‘current occupier’, giving them a one month eviction date, as the landlord is in mortgage arrears.

Does anybody know what rights has she got in those circumstances?

She is appealing to the lender to give her longer time to find somewhere else to live, but according to the letter, the maximum statutory extension is only two month. We are worried that even two months won’t be enough as it will fall just before Christmas!

She is actually interested in purchasing the flat – the flat was on the market last year, and she made an offer, but the agency selling it didn’t even come back with the vendor’s reply!

Is it now too late to buy this flat?

Any advice would be greatly appreciated!

Dorothy



Comments

terry sullivan

11:08 AM, 18th October 2017
About A year ago

try asking the lender?

Paul Tarry

11:12 AM, 18th October 2017
About A year ago

I would contact the lenders solicitor by mail or email, I would inform them that she is the tenant, that she has an interest in buying and as she was interested previously she has carried out the basic tests re being mortgageable, request her interest be put forward to the lender and who they would want to use for the transaction (the lenders solicitor is likely to be a large corporate firm and not a property specialist)

I would also contact the current letting agents (assuming there is one) and discuss with them

Contact the council and advise them (they will advise staying put obviously)

Gary Nock

11:20 AM, 18th October 2017
About A year ago

Hi Dorothy,
The lenders solicitors are being a bit naughty by trying to get her out in a month. They need to serve a proper Section 21 Notice which cannot expire until two months have elapsed. And if the tenancy started after 1st October 2015 then she should also have been given a copy of the Energy Performance Certificate, Gas Safety Certificate ( if it has gas) and a copy of the government booklet "How To Rent". And the deposit had to be properly protected and prescribed information served. Without these the notice is not valid. So once the Notice expires
( in two months - that puts it at 17th December if served today) then if the tenant does not vacate then the lender has to go to County Court for a possession order. Thats another 4 weeks. So mid January. With Xmas then you may as well say end of January 2018. Judge may award possession in 14 days And then if she still doesn't move out the lender has to appoint bailiffs. Another 2 weeks at least. So if she plays the system then she will still be there in February. She needs to get down to the Citizens Advice and speak to a Housing Specialist.

Lucy Fryer

11:27 AM, 18th October 2017
About A year ago

Hi Dorothy,
Here are a couple of suggestions:
a) read this website first: https://www.gov.uk/repossession. It will tell you what process the mortgage lender is going through to repossess the flat.

b) telephone the landlord - if you don't know their number and the letting agent won't tell you, go to http://www.landregistry.gov.uk which will tell you the owner's name and contact details.
c) Ask the landlord what the situation is with the mortgage arrears. Find out how far down the process they are. Has, there, for instance been a court hearing yet. Knowing where the landlord is in that process will tell you how long you (and they) have before the flat is repossessed.

d) Offer to buy the flat. If you can buy quickly (cash buyer?), haggle hard. If the owner gets repossessed, not only will they not get a proper market value when the property is sold, but they will also have lots of legal/repossession costs deducted by the bank from any proceeds realised.

e) If you cannot buy it quickly, contact someone who can (like me) and agree that THEY will buy the flat from the landlord and sell it on to you a little later once you have sorted out finance. The middle buyer will, of course, want to take an element of profit for their trouble.

f) Put everything you have discussed in writing. (If your original offer to buy the flat was not in writing the letting agent may not have forwarded it on to the seller).

g) write to the mortgage lender (and get the landlord to do so too) setting out your plan for purchase and timescales.

h) Telephone the mortgage lender - get the actual person responsible for the flat and persuade them to give you some time to get things sorted.

OR
Allow the vendor to get repossessed and then buy the flat on the cheap when it is remarketed, but you will have to find somewhere else to live in the meantime....

Mandy Thomson

12:09 PM, 18th October 2017
About A year ago

Hi Dorothy
Firstly, when a rental property is repossessed by the landlord’s lender, the lender becomes the landlord, meaning they inherit all the landlord’s obligations, contractual and statutory. This means they cannot evict the tenant without following due legal process.
Under an assured shorthold tenancy (the vast majority of tenancies, which I’m assuming your niece has), a lender as landlord has 2 ways to evict a tenant:
- By serving section 8 notice; unless the tenant has breached the tenancy agreement, the lender would usually only be able to rely on ground 2; however, ground 2 can only be used if the mortgage pre-dates the tenancy agreement
- The more usual section 21 *, where no reason is given; however, at least 2 months notice must be given and there are several technical defences (especially if the most recent tenancy agreement is dated 1 October 2015 or later) that Gary Nock has set out in his post
The tenant is not legally obliged to leave after either of these expire; the landlord must get a possession order from the county court, and even then the tenant is only obliged to leave when bailiffs turn up to carry the eviction to enforce the possession order.
Your niece should have been served a section 21 and/or a section 8 notice, and if she was and the lender went to court to get one of those enforced with a possession order, your niece would have received papers from the court, inviting her to submit a defence.
If your niece didn’t defend, the lender would get a possession order by default.

* Can't be used during the fixed term period of the tenancy.

Mandy Thomson

12:11 PM, 18th October 2017
About A year ago

Reply to the comment left by Mandy Thomson at 18/10/2017 - 12:09
If the lender the lender is telling your niece she must give up her tenancy without serving the proper eviction notice, I would raise a complaint and report them to the Financial Ombudsman.

Mandy Thomson

12:32 PM, 18th October 2017
About A year ago

Reply to the comment left by Mandy Thomson at 18/10/2017 - 12:11This is assuming the tenancy is binding on the lender, which would be the case if the lender gave consent for the tenancy (normally where the mortgage is an ordinary residential mortgage and not a BTL - common where landlord is letting their former home) or the tenancy pre-dates the mortgage, or the lender has acknowledged the tenancy in some way, such as demanding rent (not occupation charges or mesne profit).

Nrinder Gosal

13:41 PM, 18th October 2017
About A year ago

Hi strongly recommend she contact the landlord directly and see if he has the funds to clear the mortgage arrears before the eviction date as if he intends to clear it the eviction will not take place . Also continue all other avenues

Nrinder Gosal

14:59 PM, 18th October 2017
About A year ago

Reply to the comment left by Mandy Thomson at 18/10/2017 - 12:32
That really is his problem not yours. If he had told the lender it is his residence then all correspondence from the lender would have been sent to your address. Presumably council tax and electoral roll has been registered by your niece? Just make sure you know if he has the ability to pay his arrears. Also be aware you won’t have preferential rights to purchase the property as they have a duty to advertise it and get the best price possible

Dorothy

19:57 PM, 18th October 2017
About A year ago

Thank you all for all your advice! We will follow all the routes recommended!

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