Thursday, Feb 26, 2009
In other words "don't rent because this could happen to you"
BBC 'News': Perils of the defaulting landlord
This is another piece of shameful reporting from the state media. There is a REALLY simple way of preventing this situation - Stipulate in the letting agreement that for the agreement to be binding, the landlord has to pay any outstanding mortgage. If the landlord defaults, they default on the tenancy agreement. The BBC also fails to point out that under the Housing Act 1988, the property must be in vacant possession, so any tenant is entitled to the Notice To Quit period. If they a thrown out without notice, it is a criminal offence, for which the lending institution's principal representative get receive a stint in the slammer. Finally, if the letting agent refuses to credit check the landlord, a magistrate is very likely to view the agent as volunteering their indemnity for the landlord
11 Comments
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1. Eyes_wide_open said...
I think it's safe to say that the BBC now carry the same sort of jounalistic integrity as The Sun newspaper.
2. str 2007 said...
Pual
Where does it actually leave you then if you get that paragraph inserted, the lanlord doesn't pay his mortgage and a repossession order is served.
What difference does it actually make to the situation ?
Surely the lender wants there house back to sell and they will serve notice on you.
3. mark wadsworth said...
The article mentions that from April the law will say that tenants will get at least seven weeks notice, which seems fair enough, I'd prefer three months, the banks would prefer seven minutes.
4. refusetobuy said...
Maybe there will be so many horror stories from BTL defaults that rent laws will change.
5. paul said...
str2007 - this means that the letting agent would have a claim against against the landlord for breach of contract. It also means that you have a claim on the landlord's estate through costs incurred by the breach of contract.
The lender might want the house back, but that is a different matter. If you arrive home to see a notice that you've been locked out, or if a representative comes over with a notice from the bank that you have to vacate, my advice is always the same:
Call the police, and ask them to intervene. Stay in the property until they arrive. The bank representative will most likely leggit before they arrive to erm .. 'take advice'. Then a few days later you'll receive a Notice to Quit from the bank.
The Protection from Eviction Act 1977 (which is still valid for the Housing Act 1988) quite clearly states that it is a criminal offence to turn a tenant out on the street without a Notice to Quit. If they absolutely need you gone, you should get a written undertaking that the bank will cover all moving and emergency accommodation costs in the interim period. No undertaking, no move.
The media (especially the BBC) would prefer people not to know this stuff.
6. sneaker said...
If you don't own and don't rent, then where do you live?
7. paul said...
sneaker, the BBC has spoken with the reassuring voice of our dear leader.
Buy houses now. Prices could rise soon.
8. Roberto Birquet said...
It is tedious how so many look at the BBC as trying to mislead and supoporting government. this is nonsense. The report leads with a question that is evidently rhetorical. Is it fair that anyone can become a landlord, and if they do not pay the mortgage, a tenant has to be chucked out?
I would have thought that renters and those wanting an end to the BTL spiv culture would be grateful that the BBC brings this sort of matter to light. This site which i check as someone who has called the housing market massivly overvaued for six years is unfortuantely dominated with a certain viewpoint. That includes nonsense that Robert Peston of the BBC is somehow in cahoots withthe BBC. He also said the housing market was over-valued years ago, reported that banking was out of control, and the debt mountain was dangerous. Oh, very NuLabour on message - I think not.
9. iguana said...
Firstly, the current legislation gives 14 days notice to quit with the possibility of an extension to 42 days for instances of exceptional hardship. In practice, I am advised, the court can allow more time upon application.
Mortgagee requiring possession; if the court upon application, can be satisfied that it is just and equitable to dispense with the requirement of notice, then that will happen.
Shelter have a great deal of experience in this area and are able to offer practical advice.
10. paul said...
Iguana, we've been through this before in another post, where I showed you that the court would need to override the existing legislation to get a tenant out before the Notice to Quit expires. Re-read the legislation.
In any case, immediate eviction is not an option and is still a criminal offence.
Re-read particularly the part about requiring that the mortgagee has 'vacant possession'. The Protection from Eviction Act 1977 still forms a part of the Housing Act 1988, remember. The amendments in the new Housing Act were supplemental to the old act, not a root and branch replacement remember!
Unlawful eviction is still a criminal offence, and is likely to get the bank's representative or evictor a night in the cells at least.
This is predicated on the tenant knowing their rights however, instead of capitulating and going to their local consumer advice bureau or Shelter (while of course giving up their right to the property - great advice iguana - you must be an estate agent or landlord).
I would advise anyone worried about this (and yourself iguana) to read the legislation yourself (particulalry section IV Protection From Eviction).
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