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Anyone know what happens when a company that owns and rents out property goes bust?

13 replies

Fimbo · 28/01/2011 09:33

They own 6 houses in my street, two of which are next door to me. One set of neighbours are trying to move out quickly in the hope they get their deposit back.

Tia

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lalalonglegs · 28/01/2011 09:46

I'm really sorry, it must be stressful. Assuming they have mortgages or loans against the houses that they haven't been servicing, then the lenders are going to probably try to repossess. Your deposits should be safe if they were put in a TDS - do you know if yours was?

I'm not sure that there is any point in moving quickly, I'm pretty sure if the company's gone under and the deposits aren't in a TDS then they're not going to be paid back . I'd stay put until someone tells you otherwise - it could be the house is sold to another BTL individual or company who is quite happy to keep you on as tenants.

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BeenBeta · 28/01/2011 09:54

Yes, they will probably be repossessed and the mortgage company will evict the tenants.

If you have had a tenancy for a long time that started before the TDS schemes were introduced then it is likely the landlord would have the deposit and it will be lost.

In this very rare instance (and I woudl not nornally recommend this) I would recommend witholding the rent to ensure you get your deposit back unless you know it is for sure in a TDS.

This did happen to me once, when a private landlord went bankrupt. We terminated the tenancy without notice after witholding the rent. We did do a proper checkout and a proper clean and left it in a good state but we did make sure our deposit was safe. There really was not much the agent or landlord could do.

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Fimbo · 28/01/2011 09:54

Oh sorry lalalonglegs, I own my house, it is my neighbour who this is happening to. I feel so sorry for her, I don't think she knows whether the deposit is in a TDS or not. It's £1600 so a lot of money to lose. We live on a new build estate and the company bought up every house that was left when the estate was complete.

Thank you.

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Fimbo · 28/01/2011 09:57

Thank you BeenBeta. She is looking for somewhere else to rent, so perhaps withholding the rent for 2 months would be a good idea.

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BeenBeta · 28/01/2011 10:02

I suspect the company that bought the houses may in some way connected to the developer or the banks that were lending to the developer. In many cases, new build houses that could not be sold because of the downturn were bought up by another subsidiary company of either the developer or their bank and then refinanced in what is called an 'extend and pretend' loan.

Now, as it is the new financial year, the banks are opting to repossess because the property market is begnning to fall again.

This is going to start happening a lot.

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Fimbo · 28/01/2011 10:07

That would make sense Beenbeta.

A woman connected to the company has been on PropertyLadder believe it or not!

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lalalonglegs · 28/01/2011 10:13

If money is in TDS, your neighbours should have details of scheme with their tenancy contract. It has been illegal not to register a deposit with a TDS since April 2007 so if she has moved in since then, and the company renting out the homes was in any way professional, it should be insurance backed and there shouldn't be any issues getting it back.

HTH

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lalalonglegs · 28/01/2011 10:15

Ha, ha re: Property Ladder. Any idea which one (have embarrassingly encyclopaedic knowledge of all the episodes)?

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Fimbo · 28/01/2011 10:16

I don't think she honestly knows lala. I know when we did rent a property we got a letter stating the scheme number the deposit was in, I will need to speak to her again but I don't think she has anything like that.

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