Forgotten victims of repossession crisis – joint campaign launched

A new campaign has been launched.

Their advice is all sensible stuff:

* Always open mail addressed ‘To the Occupier’. This may include notice of any possession hearings.
* If you’re thinking of moving into a new property, make sure the landlord has permission from the lender to rent it out. Otherwise, the lender does not have to recognise the tenancy at all.
* If you were already living in the premises at the time when the mortgage was taken out, the lender may take you on as a tenant and allow you to pay rent to them directly. If you think you may be in this position, contact a Citizens Advice Bureau or Shelter.
* Try to find out as much you can about your prospective landlord and his/her mortgage status before taking up a tenancy - although in practice this isn’t always very easy.

However, finding out about your landlord is difficult and agents will lie to you.  I still think some new clauses in the contract would help.

How can you avoid a bankrupt landlord?

The media is all over the rise in repossessions of borrow to letters and the impact on tenants at the moment.  On the forums, we have a story of on tenant who may be evicted, but is still expected to sit out the whole tenancy by the agent or face penalties.  He naturally wants to protect his family from a last minute eviction, so found other accommodation.  The letting agent claims he is liable for the whole tenancy.

Although credit checks for landlords are one of our manifesto pledges, we have recently be considering a clause in the AST which helps you get out if the landlord defaults.  There should be a requirement in the AST that the landlord pays the mortgage in full every month.  This way, if they get into arrears you can claim breach of contract and terminate the tenancy.  This affords you some protection from a landlord who takes your rent to pay a mortgage on another property.

Another clause I would like to see is that the mortgage is an appropriate product (i.e. not a owner occupier mortgage). No-one should have to rent from a landlord who is lying to his lender.

Perils of Defaulting Landlords

This story is been run by the BBC, including a few case studies of blameless tennants evicted due to landlords in arrears.

http://news.bbc.co.uk/2/hi/uk_news/7912025.stm

When asked for comment on why letting agencies credit check tennants, but not landlords, I think the response from Townends (a large agency in Surrey) sums up the problem:

“Credit checks are not something any agent would do on a client. Landlords sign a contract, and have to make sure everything runs smoothly, and we conform to a code of conduct.”

So no argument against credit checks on landlords, other than the fact that they dont already do it.  In this market, with more and more agents attempting to sign up landlords as their sales businesses collapse, it would be a brave agency who tried to credit check a landlord!  This is why legislation or at least changes to the code of practice are required as it will never happen without this change.

Agents are there to represent the interests of landlords and derive their income from the landlords, not the tennants.  Unless that can be changed through legislation, I dont see any way of improving the lot of private tennants.