Saturday, Apr 10, 2010
A step in the right direction
Independent: Move to protect tenants set to become law
A move to give tenants greater protection from being evicted if their landlord defaults on mortgage repayments is set to become law after clearing the Lords today. The Mortgage Repossessions (Protection of Tenants) Bill addresses the situation in which the mortgage lender did not realise the home was being let and sought to repossess giving the tenant no notice. The Bill gives tenants the right to be represented in a possession hearing and for the court to delay repossession by up to two months.
Posted by quiet guy @ 11:31 AM (789 views) Add Comment
11 Comments
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1. paul said...
Two months? Big wow. That's nothing. The tenant should be able to sue the landlord for misrepresentation.
2. markj69 str05 said...
Sue the landlord, who obviously does not have enough money to pay his own debts?
Property should be passed over to the lender, with the existing contractual agreement standing (1mnth notice, 2 mnth, or 12mnth, etc...).
If I were to purchase an investment property with a tenant, I couldn't evict without good reason. So why should the lenders? They supposedly assess the risks before lending, they should absorb all problems in the case of a default. Not the tenant!
What ever happened to protecting the innocent? Another failure of the Labour gov't, not putting things right.
3. Crunchy said...
All landlords should go through a credit check as well as the tenant.
Never mind the out dated status quo.
4. quiet guy said...
@Paul
"sue the landlord"
As markj69 correctly points out, there almost certainly won't be any funds to collect if you win.
Are there any legal eagles out there who could advise if it's feasible to put a charge on the property instead?
@markj69
"They supposedly assess the risks before lending"
I honestly don't see why the lender who is a victim of fraud in the case that the borrower fails to declare that they're renting out the property should take the entire hit. Without a national register of tenants or some such thing, it will always be hard to detect this type of fraud - especially if the borrower does live in their property for a while before letting it.
5. iguana said...
It is a very short Act and does not do much. There are no sanctions within it for the tenant to apply to the errant landlord. It is only of use for tenants whose tenancy has not been disclosed to the mortgagee. It only extends two months 'stay of execution' and then only at the discretion of the Court if the tenant can show a need, and to cap it all, the tenant must also pay the mortgagee the payments (rent) due under the tenancy agreement. Furthermore, that payment does not create a tenancy thus allowing the mortgagee to escape the responsibilities of a landlord eg; with regard to condition of the property, repairs etc.
I supose on balance it is an improvement on the earlier position when a tenant could be turfed out with no notice.
As a postscript, the tenant only gets the two months is there had been no breach of the agreement, so if tenant got wind of the impending default of the landlord and witheld rent, he would then be in breach and unable to make an application under this Act.
Good here isn't it ?
6. paul said...
Thanks for that iguana. Methinks the Independent should have borrowed the BBC's famous quote marks as in:
Move to 'protect tenants' set to become law
7. Stevie Dee said...
Since we live in a country awash with monopoly money. The tenant should surely also be compensated by some sort of compensation scheme too. Asset strip the landlord.
8. holyroller said...
What happens if the landlord surrenders the house to the bank, as was the case of a friend of mine. He had been away a few days and came back to find the locks changed on the house and his landlord was nowhere to be found.
9. James said...
My girlfriend, who has a young daughter, has been given 2 months notice due to repossesion of a rented property. She wanted it long term because she has a lot of things including a piano which cost a lot to move, not just hundreds of pounds but thousands. Also she has to pay another £200+ agency fees and pay a £1600 deposit for the new place before she gets her existing deposit back.
10. clockslinger said...
Iguana, well analysed! Quiet Guy, poor tenant doesn't have a registerable interest...he could only register a charge against the property if he "sued" landlord, won and subsequently got an interim charging order against the property to secure any monies owed . To get an order for sale would take months more and of course any monies owed to tenant would only be secured against a property in which there would most likely be no money...the mortgagee having a prior secured interest over any equity there may be. If he gets judgement for monies owed by Landlord better try to get a warrant over Landlords car/laptop/espresso machine or third party debt order over Landlords bank account (the details of which tenant may have if paying rent into Landlords account)...Tenant is pretty stuffed with or without new and pathetic piece of legislation.
11. paul said...
He had been away a few days and came back to find the locks changed on the house and his landlord was nowhere to be found.
He should have called the police to regain entry and gone with the police to the bank to arrest the manager.
The Housing Act 1988 still defers to the Protection From Eviction Act 1977, under which it is a criminal offence to forcibly gain vacant possession. Many assume that when the Housing Act says that vacant possession is required that it must mean the tenant can be thrown onto the street. It does not - it means that the landlord (or bank) has to begin the process of lawfully regaining possession.