Private sector leasing and Tri party agreement with lender. Is this normal?

by Readers Question

9:05 AM, 30th April 2015
About 4 years ago

Private sector leasing and Tri party agreement with lender. Is this normal?

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Private sector leasing and Tri party agreement with lender. Is this normal?

Hi all,

I have approached my lender to request consent to let on my main home. They have responded and said that they will allow it subject to a one-off charge. They further said that if it is with a letting agent then the consent will be granted in a straight forward manner. However, if I am handing the property over to the local council or housing association I need to ask them to provide and sigh a tri-party agreement. When I approached my local council they were not familiar with such an agreement and stated that the lease will be between myself and the council (tenant), who further provide accommodation for persons on their book.  Private sector leasing and Tri party agreement with lender

Have you heard of such dealings before? I am wondering if this request by the lender is lender specific as I called another housing association and they too were unfamiliar with this tri-party agreement set-up. If both parties (the local council and mortgage lender) are unwilling to budge then I am left with letting agents, which was not my preferred option.

Is it worth going back to my lender and asking what this tri-party agreement consists of exactly and if they are willing to waive?

Thanks in advance for any advice or light shed.

Leon



Comments

Mark Alexander

9:08 AM, 30th April 2015
About 4 years ago

Hi Leon

It is extremely unusual for a lender to agree to letting a property to a Council, whereby they can put any tenants in of their choosing, due to insurance related risks. I suspect this is why they are requesting this tri-party agreement, i.e. to ensure those insurance risks are addressed to their satisfaction.

May I ask which lender this is please?
.

Neil Patterson

12:48 PM, 30th April 2015
About 4 years ago

Hi Leon,

I am going to make a wild guess here.

The lender might be assuming that the lease could be longer than the standard 12 months if it is with the council as 3 year fully repairing leases are not uncommon. Hence they may want some assurance that they can get vacant possession should anything go wrong.

Worth asking.


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