Repossession without arrears after property turned into cannabis farm?

by Readers Question

10:37 AM, 9th March 2015
About 4 years ago

Repossession without arrears after property turned into cannabis farm?

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Repossession without arrears after property turned into cannabis farm?

My mortgage company are intending to sell my buy to let property without my permission citing a breach of the mortgage. I have owned the house since 2003 but in 2011 the house was turned into a cannabis farm by rogue tenants resulting in an estimated repair bill of £20,000 which I simply do not have.

I have continued to make all mortgage repayments and carry out essential repairs and maintenance, but because it has been untenanted for almost three years the lender is now seeking to sell the house under the law of property act 1925.

I only discovered this fact when a specialist receivership company rang me to arrange access for a valuation of the house. The property will clearly have substantial negative equity so In these circumstances can the mortgage company rub further salt into the wounds by coming after me personally for any shortfall.

Peterrepo



Comments

Neil Patterson

10:47 AM, 9th March 2015
About 4 years ago

Hi Peter,

I am very sorry to hear of your situation.

I am not an expert in this area so hopefully others can assist, but it does sound like you may need legal assistance. please see >> http://www.property118.com/member/?id=1945

Rob Crawford

13:17 PM, 9th March 2015
About 4 years ago

Hi Peter, has the mortgage company explained why they are seeking possession? I doubt that it is because of the cannabis farm / damage issue. Rather, the property you have is not in a rentable condition and that you have a buy-to-let mortgage. Similarly if you purchase a new property with a BTL mortgage it should rentable at that time or within an agreed fairly short period. The rules surrounding BTL mortgages are very specific, they are for that purpose only. Three years is unfortunately way beyond this. However, I am confused as to why the mortgage company has not approached you to explain the issue and to establish if alternative arrangements could be agreed.

Anthony Endsor

14:05 PM, 9th March 2015
About 4 years ago

Could it be the property isn't/wasn't adequately insured?
Given the damage done and your inability to rectify it, I wonder if this is the case. In which case the lender on discovering this will not take kindly to the prospect of the property being damaged beyond repair. So this would be another breach.

Ian Ringrose

14:21 PM, 9th March 2015
About 4 years ago

Being untenanted for almost three years is unexceptionable, all BTL mortgages require you to be letting out the property.

Tony Lilleystone

16:18 PM, 9th March 2015
About 4 years ago

It appears that under S103 the Law of Property Act 1925 a mortgage lender can exercise its statutory power of sale without having to serve notice on the borrower where there has been a breach of some provision contained in the mortgage deed. .
The mortgage will no dount contain a provision requiring you to keep the property in good repair as well as requiring you to keep it let, so you appear to be in breach of these provisions even if you have been keeping up the monthly repayments.
Your only hope is to contact the lender and see if they are prepared to agree some sort of deal,
A lender is required to take reasonable steps to obtain the best price on a sale, but selling by auction is usually considered to satisfy this test.
I only hope that the sale price will be sufficient to repay the mortgage otherwise the lender will be looking to you to repay any difference.

Graham Durkin

18:30 PM, 9th March 2015
About 4 years ago

How did they find out the property was empty when you have been paying the mortgage every month and up to date .Also you must have lost the £20,000 at least in RENT alone while is un-tenanted. And now they want to sell , I would be making contact with any tradespeople i know ,get it back to a livable standard ,talk to the mortgage company if you wish to keep it .Otherwise they will sell and whats short on the mortgage you will owe and mostt likely their costs as well .Good luck with what you decide.

Mark Alexander

21:49 PM, 9th March 2015
About 4 years ago

Is there really no way that you can get the money to get this property repaired and re-let?

As others have said, three years vacant and damaged is a big problem, not least for insurance purposes.

Have you applied for personal loans, credit cards etc.? If you have been making the payments on the mortgage for three years and intend to continue to do so, surely you will be able to fund the payments on a £20,000 loan to get it rentable again because you will have the rental income to fund the payments.
.

Neil Robb

11:15 AM, 15th March 2015
About 4 years ago

Hi Are you sure it will take twenty thousand pounds to put the property right. Have you thought of a joint venture partner may be a bit late now. How much is the current mortgage and value of the property. Location?

peter cookson

18:04 PM, 15th March 2015
About 4 years ago

Hi Peter
Find a tenant who is a builder /maintenance person a create a rental contract shorthold tenancy agreement with 50% of the rent paid by is work on repairing the property. 2 birds one stone ? just a thought


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