ARTICLE FOR DRONFIELD ONLINE

ARTICLE FOR DRONFIELD ONLINE – APRIL 2009

BY Rob Cooke, head of property litigation at Sheffield solicitors, Taylor&Emmet LLP. Rob has experience in all types of disputes and represents a wide ranging client base, from public limited companies to private investment landlords. In this month’s column, he explores an increasing problem in the private rented market – mortgage repossessions.

ARTICLE FOR DRONFIELD ONLINE – AUGUST 2009

The global credit crunch is causing havoc for tenants in the private rented market. A rising number of homeowners and landlords are facing repossession, as they are unable to make their loan repayments and cannot find a more affordable mortgage elsewhere. This leaves tenants in a weak position, as in most cases, the lender’s rights come first. If you think that your landlord is being repossessed, you should seek advice immediately.

As a tenant, what notice am I entitled to from the landlord’s lender?

Lenders are often unaware that a property is rented out, so it is common for legal proceedings to start (for mortgage arrears) without the tenants’ knowledge.

A reasonable landlord should always warn his tenant if repossession is a possibility, but in many cases this does not happen until the lender has already applied for possession and a date is set for the hearing.

Lenders must send a letter to the property, addressed to ‘the occupiers’ containing details of the planned hearing. They have to do this within five days of the court date being confirmed.

Once this letter has been sent, you will hear nothing until the court agrees to give the lender possession. A notice will then be sent to the landlord and ‘any other occupiers’ informing them of the date that bailiffs will arrive. This may only happen a few days before the eviction, so it is important to seek advice immediately if you receive one of these notices.

Does my tenancy apply to the landlord’s lender?

Only in very limited circumstances.

If this is the case, it will mean the lender will become your landlord and they will need a separate court order to evict you. Most tenancies do not bind the lender, but there are the following exceptions:

You were living in the property at the time the mortgage was granted (for example, a sitting tenant or when the landlord took out a second mortgage). Ask your landlord if you are unsure about when the mortgage started
The lender specifically agreed to the tenancy
The landlord’s lender has recognised the tenancy in some way (for example, by asking you to pay rent directly to them or by accepting it from you). Most lenders will avoid doing this or will call the payments something other than ‘rent.’

What if my tenancy is not binding?

If you are in this situation, your home is being repossessed and you must take action as soon as possible. You may be able to do the following:

Persuade the lender to take over as the landlord and/or give you more time
Ask the court to suspend or set aside the warrant for possession, to allow you to find alternative accommodation
Use publicity – the media may be interested to hear about tenants who are victims of repossession
Seek compensation from the landlord. The court can award damages for the loss of the tenancy and/or storage and emergency accommodation, although it cannot reinstate you in the property

Once the lender has a possession order, you will have no right to stay and the locks can be changed. You should, however, be allowed access to collect your belongings.

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