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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25482
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Hello. we are in a strange position as we are wondering if

Resolved Question:

Hello. we are in a strange position as we are wondering if we are able to take a lender to court !
we have a buytolet which had receivers appointed. however we have tenants in the property and we have paid jan feb and march payments. we have arrears (so they say) of £16000 and we have made an offr of £5000 plus £100 pm extra on the loan. they have declined our offers and say they are proceeding to repossession. they say they dont need to go to court to sell the property. the receivers have handed back the property to the lender in the belief it was vacant!
we want to know if they can repossess without any court order at all even though they say drdens have been appointed to handle the reposssession? if what they say is true
is there some way that we can force it to court so a judge can look at our offers?

all this has been going on months and we have had a complaint in with TMB which they have refused and now we are doing an ombudsman claim who say they will ask tmb to freeze action until resolved. the complaint includes misleading documentation,data protection breaches and appalling treatment by their own complaints department.

some positive help would be good
Submitted: 3 years ago.
Category: Property Law
Expert:  Joshua replied 3 years ago.

Joshua :

Hello and thank you for your question. I will be very pleased to assist you. I'm a practicing lawyer in England with over 10 years experience.

Joshua :

I note you have made an offer of £5K with an additional payment of £100 per month over and above the standard payment . You refer to some misleading documentation. Could you expand on this a little?

Customer:

yes in march 2013 the TMB changed over to the halifax system and as a result sent letters out with a table showing the original loan plus two other loans called loan 2 and 3. these were indicated as being on a repayment basis as the arrears were quite old we took them to now be part of the mortgage as this is what the letter implied. they also increased the monthly payment by £42 having turned the arrears amount into repayment loans and leaving the original mortgage on interest only! it is clearly shown in the table although tmb deny they have consolidated the arrears.

Customer:

sorry pressed button before finishing!! we have therefore offered them the money which clears the arrears accrued since last march. thanks to poor tennants. we already subsidise the loan currently £671 and rent £565 but the property is in the middle of all our others and we are worried about them taking action for shortfall even though there is a mig premium of over £2000 on the mortgage.

Joshua :

Thanks. The world of LPA receivers is a murky one in that it is based on laws which are getting on for 100 years old and these type of mortgage are unregulated and therefore this gives the lenders an imbalance of power in the borrower lender relationship.

Joshua :

Once appointed LPA receivers are very difficult to remove without the lenders consent through the channel of the courts. This is because the terms of your mortgage deed provide that the lender has the power to appoint and remove them rather than you. If arrears have been cleared there is a basis for an application to the courts to order their removal on grounds of equity but if there are still arrears owing it is doubtful such an application would be successful unfortunately.

Joshua :

In addition most mortgage deeds for BTL mortgages include provisions that provide that you give power of attorney to LPA receivers in respect of any future sale of the property. Assuming your mortgage deed contains such provisions which is likely - though it is worth putting the lender to evidence on this point they can sell the property without a court order as the lender claims.

Joshua :

Although BTL mortgages are not regulated in the same way as residential mortgages they are fortunately covered by the Financial Ombudsman Service who deal with principles of fairness and you can threaten to bring the behaviour to their attention as you have done. In my experience the FOS is the best form of redress for customers in your position as the Ombudsman deals as above in principles of fairness rather than strict application of the law as do the courts.

Joshua :

The Ombudsman can make determinations under their powers which are binding on the lender. They will typically ask the lender to suspend any actions pending their determination. The lender can ignore their request but the risk that the Ombudsman may award additional compensation against them if they do and they are subsequently found to have acted unreasonably.

Joshua :

Is there anything above I can clarify for you any further?

Customer:

drydens have said they are going to go to court to evict the tenants on tresspass basis as it was us who put them in there.

Customer:

how long does it take for this process and as its in court for this can we piggy back it and try to talk to the judge about the offers we have made? i also wondered if it would be of any further weight if our offer was received from a solicitor?

Joshua :

A repossession claim typically would take 1.5-3 months to complete depending upon court time.

Joshua :

You can apply to seek permission to make a statement at the hearing if you wish in writing or in person.

Joshua :

In my experienc banks have little more regard to solicitors than they do to anybody else and an offer providing it is clear should have little more weight if any from a solicitor than it would from you.

Joshua :

Is there anything else I can help you with?

Joshua :

Does the above answer all your questions or is there anything I can clarify or help with any further?

Customer:

drydens told me a tresspass repossession claim is quicker than normal?? is this true?

Joshua :

Yes but if they allowed them in as tenants they will not be able to raise a claim under trespass.

Joshua :

If they allowed them in and have accepted rent then they will be tenants and they will need to go through statutory grounds for eviction.

Customer:

well strictly speaking they didnt i did!! they paid rent to me and i paid the mortgage.

Joshua :

Thanks. Did you allow them in after the LPA receivers were appointed?

Customer:

yes i did . i have never acknowledged the receivers and they have never contacted me!

Joshua :

Thanks. Have you paid any of the rent to these receivers?

Customer:

no never all the rent since jan has gone from me to lender

Joshua :

Thanks. On the basis that the LPA receivers were appoint correctly under the mortgage deed by the lender - the lender will confirm the appointment if requested - then control of the property passes to the LPA receiver from that date and accordingly any tenants you allowed in without the LPA receivers authority would not be authorised and accordingly there would be grounds for a claim of trespass by the LPA receivers.

Joshua :

However you will wish to request that the receivers do not attempt to evict the tenants (copying in the lender and Ombudsman) pending the outcome of the FCO determination as the income from the tenants is enabling the mortgage to be paid pointing out that if the determination goes against the lender you reserve your right to claim higher compensation for any unncessary loss of rental income if they ignore you.

Customer:

ok so on that basis how long could it take to get them assuming they dont co-operate !

Joshua :

If they have known about the tenants for less than 28 days then they could use an interim possession procedure which is very fast. Haver they known about them for more than 28 days?

Customer:

Sorry joshua i went out.

Customer:

i dont know if the receivers them selves knew about the tenats but i did tell one of the lpa receiver team for tmb that there were tenants in there in january! assuming this call was recorded then yes they should have known.

Customer:

bearing in mind that the tennats went in there on the 20th jan2014 and the receivers only went there on the 27th march then they really werent exactly managing the property??

Joshua :

Thanks. If they have known about them for more than 28 days then they cannot use the interim possession order approach. They must make a declaration to this effect if they want to use it. If they have not and they can use the approach then they can serve a possession order and if defended the matter will be heard within 7 days usually and the possession order confirmed if it is found to be valid. Accordingly posession can be achieved in a matter if a couple of weeks +/-.

Joshua :

However this is only where they have known about them for less than 28 days otherwise it will take a couple of months overall

Customer:

ok thats great info thanks. am looking for good solicitor and i am nr gloucester have 10 properties some of which i will be selling as soon as feasible and i am trying to buy some land as well. dont suppose you are interested? we also have 32 tenants which creates its own issues too.

Joshua :

I would be delighted except I regret I am prohibited from accepting private referrals from this site. You should however be able to negotiate a keen fee given the amount of work you propose to give a solicitor.

Joshua :

Is tehre anything else I can help you with on the above?

Joshua :

If you have no further questions for now I should be very grateful if you would kindly take a moment to rate my service to you today. Your feedback is important to me. If there is anything else I can help with though please reply back to me though.

Customer:

ok off out now but will sort rating later thank you again

Joshua :

Many thanks.

Customer:

hi joshua sorry to ask again but i had a letter from drydens today saying they understand there is a tenant in the property and they want the tenancy agreement within 7 days or they will asume trespass and evict. do you think i should send it?

Customer:

have also done my letter to ombudsman and will send today

Joshua :

No problem. They are entitled to a copy of the tenancy agreement if they ask for it. There is no reason not to give it to them voluntarily as they could seek disclosure through the county court if they wished.

Joshua :

Is there anything else I can help you with?

Joshua :

I should be very grateful if you would kindly take a moment to rate my service to you today.

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