Rental flat is repossessed.
Discussion
I was involved in a general debate in work today about the fate of a colleague who is currently renting (moved in about 2 months ago) through an agency; contract is with the agency and the rent is paid to them directly. The chap has since received a letter from a repo company (acting for the mortgage provider) instructing him not to pay any more rent to the agency as the flat has been repossessed from the owner (nothing to do with the agency). The chap has since called the agency and they know nothing of the repo of the property.
Despite the debate, we don't really know what's the deal with this sort of situation as its not historically been a common occurrence - any wise PHs out there got any experience / advice for this sort of situation?
Despite the debate, we don't really know what's the deal with this sort of situation as its not historically been a common occurrence - any wise PHs out there got any experience / advice for this sort of situation?
Edited by Northern Chimp on Tuesday 28th April 15:32
The contracts will most likely be as follows:
The owner has a contract to may the mortgage with a mortgage company.
That gives him the right to rent the flat and employ an agency.
The owner has a contract for the rental of the flat with the agency to administrate deals on his behalf.
The tenant has a contract with either the landlord direct or to the agency.
In either case, if the landlord does not legally own the property, then he has no right to claim rent, neither does the agency to claim it on his behalf.
They should stop paying the rent ASAP and look for another rented place in case they are kicked out.
The owner has a contract to may the mortgage with a mortgage company.
That gives him the right to rent the flat and employ an agency.
The owner has a contract for the rental of the flat with the agency to administrate deals on his behalf.
The tenant has a contract with either the landlord direct or to the agency.
In either case, if the landlord does not legally own the property, then he has no right to claim rent, neither does the agency to claim it on his behalf.
They should stop paying the rent ASAP and look for another rented place in case they are kicked out.
Try to find out who the bank is that repossessed and if you can, talk to their realisations team as a flat with a sitting tenant in it is likely to make them marginally more than an empty flat. I've seen deals done where the tenant lives in the property rent free until immediately before the sale, when a new tenancey agreement is entered into.
Be prepared to move out at minimal notice though as banks are great at changing their mind.
Be prepared to move out at minimal notice though as banks are great at changing their mind.
If I were him I would visit the CAB.
I guess he has paid a deposit which by law the agency must hold in one of the schemes for tenants deposits.
If he does go to the CAB tell him to take his assured shorthold agreement and and correspondence that he has for both the tenancy and the repossession.
I guess he has paid a deposit which by law the agency must hold in one of the schemes for tenants deposits.
If he does go to the CAB tell him to take his assured shorthold agreement and and correspondence that he has for both the tenancy and the repossession.
I seem to recall reading that there are proposals to change the law on this. Currently the tenant has very few rights if the property is repossessed, and whilst under the proposals they won;t have many more, they will at least have a greater time to get out.
However as said above the mortgage company may prefer to keep the tenant, at least it is some income!
However as said above the mortgage company may prefer to keep the tenant, at least it is some income!
Interesting one. Might be worth linking this up to the business forum too.
Knowing the reason for repossension would help. Your friend may well be out on their ear but there maybe a deal to be done. At this time an income against the debt would be preferable to the uncertainty of a sale. Your friend may have to do a bit of work to thrash out a deal.
Knowing the reason for repossension would help. Your friend may well be out on their ear but there maybe a deal to be done. At this time an income against the debt would be preferable to the uncertainty of a sale. Your friend may have to do a bit of work to thrash out a deal.
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