Landlord Not Paying Mortgage - Tennants' Rights?

My husband and I have been comfortably renting our 2 bedroom house now for about 8 months. We now have a two month old as well so suffice it to say, we're settled and hoping not to move for a couple of years.

Recently we started getting post 'to the tennant' from a solicitor for a bank and have learned that basically the landlords have not been paying the mortgage and a court date has been set (for 9th of April) to determine further action on the property being repossessed.

We have been in contact with the letting agent, where we pay our rent, and they haven't been able to contact the landlords for some time now. They said they have even sent someone to the forwarding address they were given and it doesn't appear as though anyone even lives at that property!

My personal guess is that the landlords stopped paying on their mortgage back when we began renting the property.

The obvious issue and concern now is that we have a 2-month-old which means I won't be returning to work for at least another 7 months, and we aren't really in the position to move if there is any way to prevent it.

We pay the rent and council tax on time every single month and have maintained the property's appearance well. My husband is considering not paying the rent from here and setting it aside for a new place to live since the landlords aren't paying it on to the bank anyway, but we both know that would only get us in trouble with the letting agent.

We're also questioning the letting agent's responsibility of verifying that the landlord's mortgage was buy-to-let, which we suspect now it was not.

Anyone have any experience or know what our rights may/may not be in this situation?

You should post to Money Saving Expert if you haven't already, they are usually quite helpful in these kinds of situations.  I'd stop paying the rent definitely.

I would consult someone a your local CAB as they would be most likely the place that could offer you the most reliable advice.

Please get advice about this from CAB, your local council, local housing charity, as is appropriate.

http://www.direct.gov.uk/en/HomeAndCommunity/BuyingAndSellingYourHome/RentingAHome/DG_4001369

Sending good thoughts.

I know someone this happened to and she had no idea until the place was actually foreclosed!

She was able to rent directly from the lender, though.

Could this be an option for you?

I'd get onto Shelter website right away!  IIRC there's a section dedicated to just this situation.

Also just so you know, if you don't already, your deposit should be protected, as it is required by UK law to have it insured.  I suspect the letting agency has done this??

Hubby (estate agent) says:

Give your notice right now.  You can break contract early under law (he can't remember the name of the specific section right now) due to the landlord not keeping his side of the agreement.  You should carry on paying rent until you move out because he could still theoretically come after you for the arrears down the road.  Repos can take up to 6 months or so, but given your circumstances now, you're better getting out as soon as possible as the bank will not keep you on as tenants and you'll have to leave anyway.

This sucks, but your deposit is protected under legislation at least.  Wish there was more you could do!

I should add that we were on a 6-month tenancy agreement until December. Since then it has defaulted to a month-to-month. We wanted to sign another but this is when the letting agent said they couldn't contact the landlords to have it renewed...probably because the a$$hats have fled the country.

Anyway, haven't they broken the lease agreement anyway by letting a property that is not a buy-to-let mortgage?

My husband and I were discussing it more tonight and questioning keeping the rent for March and April and notifying the letting agent that we are holding it in an account until the court date when we can learn what will happen to the property. Ultimately we would like to stay here if given the opportunity by the lender as we really like the property and location. We'd be willing to consider buying the property ourselves if it goes up for auction or anything.

Anyway, haven't they broken the lease agreement anyway by letting a property that is not a buy-to-let mortgage?

Unlikely, unless the lease agreement specifically requires them to pay the mortgage. What they would have broken in this situation is their mortgage agreement, which of course they've broken anyway by not paying it!

My husband and I were discussing it more tonight and questioning keeping the rent for March and April and notifying the letting agent that we are holding it in an account until the court date when we can learn what will happen to the property. Ultimately we would like to stay here if given the opportunity by the lender as we really like the property and location. We'd be willing to consider buying the property ourselves if it goes up for auction or anything.

Legally, I suspect you'd be on thin ice doing that, although you might well "get away" with it especially if the owner has disappeared. Unless and until the house is foreclosed on you have a legal agreement with the current owner to pay rent.

What I would find out is what your rights are in the UK if the house is foreclosed on and you are renting month to month. Presumably the bank would have to just give you a month's notice, but maybe there are other protections for tenants.

No they have broken the lease by not paying their mortgage, as the landlord is supposed to "own" the property and not paying their mortgage invalidates this.  That's not the properly legal terminology, but that's the gist of it.  HUbby can't remember the specific section number under the law, but there is something dealing with it.  LMB, not to be the bearer of bad news, but he says that banks very rarely allow tenants to stay - he's never had a repossession come his way where they were.  They also don't usually go to auction unless there's a good reason - it'll be listed and sold through local agents.

Since you're on a rolling lease now, you only need to give a month's notice anyway...

There is supposedly a protection if you're in a lease *if* the lender has given permission for it to be let out, at least according to MSE.  When we were looking at flats, we asked for that permission from one landlord, and it caused a bit of a problem.  Not because I think that there wasn't permission, but it was a PITA for them to show it.  We then didn't bother with this flat, but it was through a major letting agent.  It makes me a bit nervous about it now though.  However, our current landlord is pretty secure and responsible.

But if you're on month to month, I doubt you have any protection, unfortunately.  It seems a renter's nightmare.

No they have broken the lease by not paying their mortgage, as the landlord is supposed to "own" the property and not paying their mortgage invalidates this.  That's not the properly legal terminology, but that's the gist of it.  HUbby can't remember the specific section number under the law, but there is something dealing with it. 

It would be interesting to see something to back up that assertion as it makes little sense. The house is owned by the landlord until it is foreclosed by the lender, at which point ownership changes to the lender.

The lease has not technically been broken but it has been frustrated which is a legal term meaning something has happened to prevent it from being fulfilled, basically. There was supposed to be a law change in the offing to give tenants more protection in this situation but I don't think it has gone through yet. I second the idea of contacting Shelter. They offer a swift and relaible (and free!!) legal advice service.

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Shahbnou I love your signature, it cracks me up

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