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Landlord lying to mortgage holder and letting agent

92 replies

WhistlingPot · 19/06/2014 09:41

A few years ago we discovered (through debt collectors arriving at our door) that not only had our landlords not been paying their mortgage for the past 6 months, they hadn't had permission from their mortgage holder to let out their house.

Thanks to Shelter, we learnt that the mortgage company had legal rights to evict us with two days notice, should they wish, regardless of the notice period we had signed up to.

Being 5 months pregnant at the time with our second child, and in the understanding it would be a long term let (we had been there 4.5 years) this was an exceptionally stressful time. We were served formal notice by the ll as they were obliged to put house on the market. We found somewhere else asap, less than ideal (by borrowing and using up valuable savings) and in fear the mortgage company could still evict sooner.

We were then evicted from the new place after 6 months due to ll selling up (even though had promised long term after initial 6 month let) and rented another place. We have just gone into social housing due to being evicted again as our home has just been sold (after being promised long term).

We have never defaulted on any rent and always looked after our homes, paying for thorough end of tenancy cleaners etc.

AIBU to feel agrieved that

A) Our original ll failed to sell house but gained permission to re-let, and the new tenants are still there?

B) The letting agent allowed the property to be let (and managed it) without permission from the lender, therefore compromising our position?

Do we have any legal rights?

OP posts:
TreadSoftlyOnMyDreams · 25/06/2014 17:31

A lot of the contracts we have signed state that the ll has signed to say they have permission, rather than the la actually requiring the proof. I think there are so many checks on tenants, it wouldn't be unjust to require Las to contact the mortgage lender for direct proof, as another layer of protection

^^ This would go some way towards letting agents being able to justify the fees they are now charging to prospective tenants.

WhistlingPot · 25/06/2014 17:43

Inthedark, I appreciate your point, however we were required to vacate the premises by the eviction date or face blacklisting from all the letting agents in the area.

We were told they needed the house vacant in order for it to have more chance of selling. We did the honourable thing of going. We were lucky we had some savings and could borrow from family to cover ourselves, buy furniture that fitted etc. Not everyone is going to be lucky enough to be in that position, and indeed we were turfed out only 6 months later.

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Viviennemary · 25/06/2014 17:56

You've had a rough deal. And it is annoying that your first ll is now reletting as you were happy there but I don't suppose anybody could have foreseen this. I don't know what the answer is really. But at least you have a new home now. And I agree with checks on lls as well as checks on tenants.

Inthedarkaboutfashion · 25/06/2014 18:37

Landlords should have checks on them, I agree with that.
Thinking about the OPs situation though I'm not sure that the LL having permission to leg would have helped her a great deal. If the LL didn't pay the mortgage the building society would still be able to repossess the house and put it up for sale regardless of whether the all had permission to let or not. If they had written to the tenant (which from the OPs posts it sounds like there was letters addressed to 'the occupier') and given notice then they could have still gone to court and got an eviction notice.
The LL having permission to let will not prevent repossession if the mortgage is unpaid.

WhistlingPot · 25/06/2014 19:04

No but it would enable savvy renters to question whether or not they want to take the property on. Or barter for a cheaper rent if happy to take the risk. Or even take action against the la if they haven't done their checks properly.

The trouble is as a renter, you are often at the mercy of your letting agent.

I am dying to link to a letting agent association website which reveals how they largely view the likes of Shelter and their recommendations. Can't as not worked out how to copy and paste on phone, but it's quite shocking.

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JaneParker · 25/06/2014 19:20

I think a legal claim (suing) might be too hard and we are in a bit of too much of a take take ambulance culture at present so the fewer people who feed into that the better. May be look to yourself - were there things you did at school and after which meant you did not choose a career which enables you to get a mortgage?

Can we try not to blame others and take personal responsibility for things even though that is not the spirit of our age? Yes other people will do stupid things including many tenants and landlords but it tends to be best just to move on and personally excel as your best revenge.

PattyPenguin · 25/06/2014 20:46

I wonder whether the LL was paying tax on the rent he was getting. HMRC has a form on line you can use if you suspect tax evasion www.hmrc.gov.uk/tax-evasion/hotline.htm

In your situation, OP, I'd fill it in. And see what you can do to campaign with groups like Shelter and Generation Rent.

Sod forgive and forget. Unless people do something about unfairness and bad treatment, nothing will change. Remember the Suffragettes.

WhistlingPot · 25/06/2014 20:57

JaneParker I did very well at school, and went through further and higher education. Dp and I have always worked when possible, bar periods of ill health, misfortune etc but we could have joined the band wagon and got a ridiculous mortgage, way beyond our means, but we could see that was too risky and irresponsible.

It's interesting you raise this issue of taking personal responsibility. This is exactly the point I am making with respect to landlords who have found themselves in a tight spot, and the banking practices which put them there.

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WhistlingPot · 25/06/2014 20:59

Patty I have no grounds at all for thinking they did not pay tax, and that would feel very much like a revenge attack, which I'm not particularly interested in.

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unrealhousewife · 25/06/2014 22:45

The vitriol on this thread truly astounds me.

Of course it was OPs own fault she was evicted at short notice, she got what she deserved because she can't get a mortgage. Grin

Should be grateful to get a roof over her head, even if it was just for a short while!

Unbelievable.

Patty your tax evasion form is an excellent idea.

WhistlingPot · 26/06/2014 08:16

It is tempting Grin

I suppose if they are the sort to lie to their bank and letting agent, and would rather see another family go homeless than pay the mortgage with the rent they are being paid, perhaps it's not too far a leap to question their tax position, especially as overseas (if that bares any relevance).

How about tenants pay directly to the mortgage holder where there is a mortgage? A bit like lls can get hb paid to them?

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WhistlingPot · 26/06/2014 08:18

Oh that would really shine a light on how much housing benefit is used to pay off other people's mortgages Grin

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Inthedarkaboutfashion · 26/06/2014 09:48

A bit like lls can get hb paid to them

It isn't that easy to do that anymore. It's part of the reason why more landlords than ever don't want HB tenants.

Inthedarkaboutfashion · 26/06/2014 09:51

It would be interesting to see how many landlords are actually having their mortgages paid off by HB because I keep hearing stories about private landlords not taking DSS tenants. We can't have it both ways; people complaining that landlords won't accept DSS but then still
Complaining about HB being used to pay mortgages .
Personally I would happily support limited housing benefit for people in private rentals. It should be in line with the mortgage help that home owners are able to get if they find themselves unemployed.

WhistlingPot · 26/06/2014 09:53

I don't understand why they made that change.

It's still no reason not to consider it as an option though.

It reminds me of when a pub closed down, the lls did a runner not paying staff and stealing everything they could before leaving. I had a friend who worked there who had just become a single mum, it really wasn't funny for those who didn't get paid.

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WhistlingPot · 26/06/2014 09:55

Yy to more transparency.

And yes I agree mortgage holders should get some help if they suddenly become unemployed through no reason of their own.

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WhistlingPot · 26/06/2014 22:46

And finally....on LA opinion and attitudes to Shelter:

old.lettingagenttoday.co.uk/news_features/Shelter-savaged-for-scaremongering-in-private-rental-sector

"I wish Shelter would simply just belt up!"

"Shelter never thinking ahead as usual but are happy to give out bad advice!!!"

(To Rob Campbell Shelter CEO)
"Stop this nonsense and direct your comments to those who can do something about the 'problem' as you see it.....the government and their tenancy legislation to give landlords protection of their properties if granting longer tenancies. Otherwise go and find a proper job. Until you do one or the other I will give nothing to Shelter."

"Simply another reason for never giving donations to Shelter. What a waste of money commissioning a pointless report which has cost fortunes of donated money. 'Why should tenants have to worry about paying their rent' it states, are they advocating tenants don't pay their rent or maybe the government should support all.
SHELTER YOU MAKE MY BLOOD BOIL"

I don't know what to think tbh. But truly shocked at some these comments.

_

And on Iceland.....:

January 10, 2014
www.spiegel.de/international/europe/financial-recovery-of-iceland-a-case-worth-studying-a-942387.html

"What happened in Iceland from 2008 to 2011 is regarded as one of the worst financial crises in history. It seems likely that never before had a country managed to amass such great sums of money per capita, only to lose it again in a short period of time. But Iceland, with a population of just 320,000, has also staged what appears to be the fastest recovery on record. Since 2011, the gross domestic product has been on the rise once again, most recently at 2 percent. What's more, salaries are rising, the national debt is sinking and the government has paid off part of the billions in loans it received in 2008 from the International Monetary Fund ahead of schedule. It's a sign of confidence.

But how did they do it when others cannot? Can we learn something from Iceland?......

...........Iceland's rapid return to health hinged on a series of measures that Nobel laureate Paul Krugman later referred to as "doing an Iceland." Krugman, an admirer of Iceland's dramatic comeback, has recommended a similar policy cocktail for other nations in crisis. The rules are as follows: Allow your ailing banks to collapse; devalue your currency if you have one of your own; introduce capital controls; and try to avoid paying back foreign debts.

That may sound like an extremely self-serving recipe -- and it was. Whereas billions of public money was pumped into the banking system in Ireland so that financial institutions could pay back their creditors, Icelanders voted against this route in two separate referenda. They couldn't see why they should pay for the greed of foreign investors who followed the Siren song of high interest rates to the island nation.

Jónsson only shakes his head wearily when asked if he has a guilty conscience. He claims to have been one of the few who warned of the currency bubble long before it burst. Now, he is excited about the country's new opportunities, which are remarkably similar to the ones it has always had. "A hard-working populace. A healthy democracy. A high level of education. Tourism. Natural resources, such as wind, hydro-power and geothermal energy. (And fisheries. What would we be without the fisheries?)"
_

In October last year, The Guardian had something interesting to say:

www.theguardian.com/world/2013/oct/06/iceland-financial-recovery-banking-collapse

"Where everyone else bailed out the bankers and made the public pay the price, Iceland let the banks go bust and actually expanded its social safety net," noted Paul Krugman, admiringly. Iceland, he found, had demonstrated the "case for letting creditors of private banks gone wild eat the losses".

Nobel prize winner Joeseph Stilitz agreed. "What Iceland did was right. It would have been wrong to burden future generations with the mistakes of the financial system." For Financial Times economist Martin Wolf too, it was a triumph. "Iceland let the creditors of its banks hang. Ireland did not. Good for Iceland!"...

...."Icelanders are fast on their way back to becoming among the richest people in the world, just five years after experiencing one of the most dramatic financial meltdowns in history."
_

The bit where it relates to struggling landlords is explained more clearly in this link:

www.forbes.com/sites/traceygreenstein/2013/02/20/icelands-stabilized-economy-is-a-surprising-success-story/

"You may have heard about Iceland’s toppling economy back in 2008. As one of the hardest-hit countries at the time, Iceland’s heavily criticized method to escape veritable economic demise actually did the trick.

Faced with the possibility of financial failure, Iceland had to think on its feet. Instead of bailing out banks USA-style, the country forgave mortgage debt for the population – and completely started over from square one."

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