Reply to: Is this Legal?

[LostInBrussels]

Currently living in a rented property which was occupied by the labndlord before starting renting it .
I have a sneaky feeling that he has a normal mortagage taken out claiming that he is living in the property whereas in reality he was there only a few months and then rented out..is this legal? Do the banks not find out?

I purchased my flat only to have to relocate a mere 2 months later. I called up the mortgage company and they transferred it onto a btl mortgage. I think I had to pay circa 300 gbp for the admin fee, but the rate and conditions stayed the same as before.

[BolshieBastard]

Currently living in a rented property which was occupied by the labndlord before starting renting it .
I have a sneaky feeling that he has a normal mortagage taken out claiming that he is living in the property whereas in reality he was there only a few months and then rented out..is this legal? Do the banks not find out?

WTF!? He doesnt have to tell you whether he's informed his mortgage company. If you dont like it, **** off and find another gaffe to squat in!

[centurian]

Possibly.

But "not telling the Mortgage department of the Bank" is not going to make one jot of difference to the Insurance cover.

tim

Strictly speaking, perhaps not. But if an insurance company suspects that you have done anything dodgy (even though it's not to them), then they could simply decide not to pay out.

Remember they are ones holding the money and if they get funny, then can simply turn around and say "sue us then", knowing that if you do, you'll basically have to admit to the judge how you were being dishonest to the mortgage company.

What are their chances of finding out - probably quite low. But if they do, never underestimate their ingenuity in refusing claims

[tim123]

Change of use.

Owner not resident.

I would be amazed if a residential Buildings Insurance policy did not say it makes a difference.

Possibly.

But "not telling the Mortgage department of the Bank" is not going to make one jot of difference to the Insurance cover.

tim

[RichardCranium]

I see no reason why the BI should be void because you don't tell the Bank that holds your mortgage. It's completely irrelevant to the risk of the house subsiding or anything else that the BI covers.

Change of use.

Owner not resident.

I would be amazed if a residential Buildings Insurance policy did not say it makes a difference.

[tim123]

foolishly i did this for 3yrs, rented out my flat before selling it.

i think thats right - the owners BUILDINGS insurance would be void but your own contents should be ok

I see no reason why the BI should be void because you don't tell the Bank that holds your mortgage. It's completely irrelevant to the risk of the house subsiding or anything else that the BI covers.

Not telling the insurance company may, of course, be relevent if the tenant is the one who starts the fire

tim

[centurian]

It could invalidate his home insurance, so please take all precautions not to burn down this property. He should have notified his bank also, and they would probably load his mortgage interest rate. Not illegal though, but risky, as the bank could foreclose for breach of contract, and that could chuck you into the street.

A smart/bored CPS barrister could probably make a case under Section 2/3 of the Fraud Act (2006) - "Fraud by false representation" or "Fraud by failing to disclose information".

Essentially he's defauding the mortgage company.

[TinTrump]

I just appealed to his better nature to try not to burn the house down.

In the time I've lived in it, my house in the UK has survived 2 earthquakes and a near miss by a tornado (the one that cut a path through Kings Heath and Sparkbrook in Brum). You're taking a big risk that nothing untoward happens.

[creditcrunch]

It's not legal but, hey, screw the banks . I am renting out my place. Told the tenant upfront that bank was not informed of rental and he could choose not to sign tenancy agreement. Upside for him was a guarantee that rent would remain the same for a minimum of 2 years if he agreed to sign up despite the "buildings insurance" situation. I am not interested in making a living off rental income, just need the mortgage covered. Given the average price of lets in the area, my below market rate was frankly an offer he could not refuse. I just appealed to his better nature to try not to burn the house down. Not prepared to pay a penny more on an exorbitant BTL rate when I am an accidental landlord due to the "masters of the universe" screwing things up.

[Liability]

Currently living in a rented property which was occupied by the labndlord before starting renting it .
I have a sneaky feeling that he has a normal mortagage taken out claiming that he is living in the property whereas in reality he was there only a few months and then rented out..is this legal? Do the banks not find out?

It will void his insurance and also the Mortgage provider can in extreme circumstances call back the mortgage amount if they wanted to be really arsey.

[TinTrump]

I'm renting my house out in the UK and the mortgage lender knows (and they provide the insurance so all OK there). Is the let administered by a reputable agent e.g. a high street estate agent as mine wanted a copy of the "thumbs up" from the mortage company before taking it on?

Mortgage with Yorkshire BS and they didn't up my rate; good people in my experience.

[swamp]

If your landlord can't keep the payments on his mortgage (for 'your' house) then the bank will repossess the property and throw you straight out. You may come home and find all your possessions on the pavement.

http://www.housingrepossessions.co.u...e-arrears.html

If a landlord has an ordinary mortgage, any tenants in the property will be unauthorised unless the lender subsequently consents to the property being let. These tenants will have even less protection from repossession. If the property is repossessed the lender will not need a possession order to evict the tenants as they are not lawfully in the property. If the tenants refuse to leave, the lender may be able to evict them as trespassers, which can be done through the court in a matter of days. Any unauthorised tenant who learns that a possession order has been made should immediately start looking for alternative accommodation.

[Mailman_1]

They used to be fine and not charge for the conversion, then it was an "admin fee" to amend the mortgage details, now they void your mortgage and transfer you to a buy-to-let rate. :-(

That's my experience anyway.

[daviejones]

In my exp the banks charge a different rate when you tell them....

[NickNick]

You dont actually have to change your mortgage from a normal one to a landlords one when you rent a house out. You do need to tell whoever you have the mortgage with that you are renting it though.
As for insurance, the household policy doesn't have to change, but again you do have to tell the insurance company.

At least that was my experience.