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Landlady Had Decided To Sell House

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A friend of mine is getting concerned about being thrown out on his ear as their lanlady has decided to sell the house they have only just signed an AST for. I told him not to worry too much as these things take time (especially with the state of the market currently). There is however an additional clause in the AST referring to mortgage ground II (see below for text) that I have not seen before.

Mortgage GROUND II

The landlord gives notice to the tenants that possession of the premises may be sought under Ground II of part I of

Schedule 2 of the Housing Act 1988 in that:-

The premises are subject to a mortgage granted before the beginning of the tenancy and ; the mortgagee is entitled to

exercise a power of sale conferred on him by the mortgage or by section 101 of the Law of Property Act 1925; and the

mortgagee requires possession of the premises for the purpose of disposing of it in exercise of that power and; either

notice

was given as mentioned in Ground I above or a Court is satisfied that it is just and equitable to do so

For the purposes of this Ground “mortgage” includes a charge and “mortgagee” shall be construed accordingly.

My questions are:

1. What exactly does this clause mean? Can no notice be given if they sell the house and want them out?

2. Could they still refuse viewings based on peacful enjoyment etc etc even with this clause in place? Then the landlady would have to wait until the end of the mutual break (see below for the break clause)?

Mutual Break Clause

Both the Landlord and Tenant shall have the option that at any time after the initial fixed term of this

tenancy being SIXTEEN MONTHS (or after a similar period following a fixed term extension to the

original tenancy) either party may invoke this break clause by providing a minimum of two months

written notice on or before the rent due date to the other, therefore to serve a minimum period of EIGHTEEN

MONTHS (Such notice to be served to the landlord or the landlords agent by recorded delivery). At the end of such

notice the tenancy shall end and all obligations and responsibilities shall cease; subject nevertheless to any claim by either

party against the other in respect of any breach of any of the terms and conditions of the agreement.

Sorry for the War & Peace post but I wanted to get the detail in. Thanks in advance.

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IANAL. However, the clause seems to be about re-possession by the bank. ie if the landlady doesn't pay the mortgage, the bank can repossess the property and throw you out. I wouldn't worry about that clause too much, because no landlord would want that to happen.

In practice, if the landlord wants to get you out, he has to take you to court. That always gives you a bit of time, months sometimes. As long as you pay the rent, you should be safe for the 18 months (unless, as above, landlord goes bust).

Next time, do not agree to such a long lease unless you are certain your life will not change during the next 18 months. If landlady wants you out before the 18 months, she can always bribe you to leave.

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It's a standard clause, it means if the house gets repossessed then the bank can get vacant possession of the house by applying to the courts to kick out the tenant. They would still have to serve section 8 notice, a minimum of two months. I wouldn't worry about it, it has no relation to the landlady's rights/powers to sell the house or arrange viewings etc, it's just to protect the lender in case of a repo.

Edited by Little Professor

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Mortgagee is the bank/building society

http://www.investopedia.com/terms/m/mortgagee.asp

Mortgagor is the landlady

http://www.investopedia.com/terms/m/mortgagor.asp

Unless the house is in fact being repossessed by the bank, I think the landlady has got her mortgagee and mortagor mixed up. Common mistake. Looks like she's stuck with the full 18 month agreement.

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A friend of mine is getting concerned about being thrown out on his ear as their lanlady has decided to sell the house they have only just signed an AST for. I told him not to worry too much as these things take time (especially with the state of the market currently). There is however an additional clause in the AST referring to mortgage ground II (see below for text) that I have not seen before.

Mortgage GROUND II

The landlord gives notice to the tenants that possession of the premises may be sought under Ground II of part I of

Schedule 2 of the Housing Act 1988 in that:-

IANAL, but I'll stick my neck out and say there's no way such a clause would be enforceable by a landlord.

A lender (mortgagee) can repossess, and I expect that's the law referred to. But that's a red herring: the tenancy agreement is between the landlord and tenant, not the lender. A repossession could only happen if the tenancy is invalidated: a court declares that the landlord had no right to enter the agreement. Which means the landlord is in breach of her mortgage terms and conditions as soon as she signs the tenancy agreement.

Can't see there's any way this clause serves the landlord. As a tenant I'd take it as a warning that the landlord is at best clueless; at worst defrauding me (by knowingly entering into a contract she cannot fulfill). The fact it's there will scream "fraud" if it does get repossessed.

Best case: it's a minor technical thing. Landlord has made best efforts to apply to change the mortgage to BTL terms, but the lender has repeatedly been too bloomin' inefficient to reply. Frustrated landlord is trying hard to act in good faith towards tenant.

Worst case: landlord is in trouble and fully expects to be repossessed - maybe proceedings are already underway. Just grabbing whatever she can on the way, including some mug's rent.

If she's also trying to sell, I'd worry about the latter.

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My tuppenceworth, the landlord has not indicated any intention to attempt to bring the tenency to an end early (unless I've misread) only that they intend to sell. So taking the clause out of the way (applying to the lender only) I'd guess she's looking to sell on the rental property as 'with tenent'.

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My tuppenceworth, the landlord has not indicated any intention to attempt to bring the tenency to an end early (unless I've misread) only that they intend to sell. So taking the clause out of the way (applying to the lender only) I'd guess she's looking to sell on the rental property as 'with tenent'.

+1

House are bought and sold all the time with sitting tenants. Take a look at any auction catalogue and you'll see.

In the OP, anybody who bought the house would also have to buy and honour the 18 month AST. The terms of the AST would remain the same, only the name of the landlord would change. The whole thing should be of no interest to a tenant, it may even be beneficial if the landlord improves.

The clause in the OP is a standard clause in an AST, it has nothing to do with a landlords sale and so is not relevant in this situation.

As for allowing viewings, well you can be as awkward or co-operative as you like. You have nothing to lose, the home is yours for the 18months. I would expect at the very least to negotiate a discount on my rent for some form of cooperation.

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  • 311 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
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      • Even
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      • up 5%



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