Is this legal? Bank wants to amend tenancies

Is this legal? Bank wants to amend tenancies

16:33 PM, 12th September 2022, About 3 months ago 17

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Hi, We are in the process of remortgaging a block of 9 flats and have had a mortgage offer.

But prior to completion, the bank are insisting that we write an amendment to the existing tenants that if I don’t pay the mortgage they will vacate the flat if instructed by the bank.

Is this an unreasonable? Or even a legal request?

Many thanks.

Chris



Comments

Graham Bowcock

17:14 PM, 12th September 2022, About 3 months ago

As a general principle, tenants are under no obligation to accept any variation in the agreed (and signed) terms. I have never seen this request before.
I'd be fascinated to see if anyone has a diferent (and more authoriatve) answer which would specificlaly relate to the lendign element.

Monty Bodkin

18:41 PM, 12th September 2022, About 3 months ago

I think they are referring to a section 8 ground 2 notice. It must be served prior to the tenancy starting. I suspect it wouldn't be valid if served later, which makes it odd the mortgage company asking for it.

Double check the existing tenancy agreement as most will contain it.

chris

20:24 PM, 12th September 2022, About 3 months ago

Reply to the comment left by Monty Bodkin at 12/09/2022 - 18:41
I'm not sure but I think section 8 notice ground 2 they have to be mortgagee before the start of the tenancy they want a declaration from the existing tenant's that if mortgage not payed they would vacate if requested

Monty Bodkin

22:15 PM, 12th September 2022, About 3 months ago

Reply to the comment left by chris at 12/09/2022 - 20:24
I don't think that would be enforceable.

Which lender is this?

Annie Landlord

12:15 PM, 13th September 2022, About 3 months ago

Presumably the Lender is anticipating that England and Wales will follow Scotland in stopping S21 and also making all S8 grounds discretionary. Hence, repossession by the Lender is not a mandatory ground for eviction and the Lender would be forced to become a landlord

SCP

12:27 PM, 13th September 2022, About 3 months ago

In case you, the Landlord, default to the bank, the bank wants to have vacant possession, and wants your tenant to agree to this.
Would not a tenant want an agreement/covenant from the Landlord that the Landlord guarantees the Tenant that he, the Tenant, will not be disturbed by any mortgagee (covenant or agreement in favour of the tenant that he will enjoy quiet and peaceful enjoyment)?
In other words, the bank's demand strikes at the very heart of a Tenancy Agreement.

DSR

11:44 AM, 14th September 2022, About 3 months ago

from what I understand the can ask you to ask your tenants to sign a variation to the lease but the tenants are not obligated to at all to agree. ( they are just seeing if your tenants will comply to mitigate their risk).

But, as you cannot not guarantee this to the lender (unless every tenant does agree ) they will either
1. refuse a re mortgage or
2. lend on it knowing that if you default they will become the Landlord - and if they want vacant possession they themselves will have to issue notice directly to the tenant.

Crossed_Swords

12:11 PM, 14th September 2022, About 3 months ago

It's quite common now with sitting tenants or remortgages (I have had this a few times).It is to protect the lender against future repossession being declined by the court in favour of a tenant leaving them with no security. The case law in question is very specific but some lenders now incorporate this. It's nothing to worry about. It just means the bank can enforce eviction. It does not affect you at all as it would only apply if the property has been repossessed.

Crossed_Swords

12:18 PM, 14th September 2022, About 3 months ago

None of my tenants objected to signing since without a mortgage they would be given notice.

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