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RJM Law, Lawyer
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Experience:  LL.B (Hons)
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My consent to let expired on a property that is

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My consent to let expired on a property that is unmortgageable due to Cladding issues. The leader did not offer me an alternative product so I had to move back in and rent the spare rooms. The lender is now saying I am in breach of my terms.
JA: Where are you? It matters because laws vary by location.
Customer: I cannot move product, I cannot sell, even though the provider does offer BTL products, I was not offered one when my original consent lapsed. England
JA: What steps have you taken so far?
Customer: I have phoned them and written an email outlining why I am in this situation
JA: Is there anything else the Lawyer should know before I connect you? Rest assured that they'll be able to help you.
Customer: That my main residential mortagage is with the same company.
Customer: replied 13 days ago.
Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call.
Customer: replied 13 days ago.
Let me know if you need more information, or send me the service offer(s) so we can proceed.

Hello, and thank you for choosing our service today. I am the expert who shall assist you with this opportunity

Please note, our service is conducted through emails and from time to time there may be a delay between answers and responses, this is due to the expert availability at the time.

If you do not receive a response immediately, please be advised I may be working through other matters however you shall receive a response as soon as I am finished with any live. However please be assured I will get back to you.

I will be able to provide you with guidance in relation to your question which should assist ifi in clarifying matters and navigating the legal system. However, please note this does not form a professional client relationship.

I look forward speaking with you and providing help.

Customer: replied 12 days ago.
hello

Thank you I am just looking through this for you now.

Customer: replied 12 days ago.
I'm sorry but this service has offered zero value so far, I am not inclined to spend another £44 without any evidence

You are under no obligation to accept calls, I have not provided a response to the question yet, but I am looking through this now.

Customer: replied 12 days ago.
thanks, ***** ***** interested to see what you think

On what grounds are they stating you are in breach, and why did the consent end?

Customer: replied 12 days ago.
consent was only granted for 2 years, this two years ended as did my initial term. At that time, my interest rate was set to go up from 2-5% AND I was no longer allowed to rent the property. My options were sell or remortgage (both impossible due to cladding) or move back in as a residential mortgage and switch to a new product.

Ok thank you, ***** ***** lender aware of the cladding issue when the initial terms were granted?

Customer: replied 12 days ago.
Effectively the options were, bankruptcy or move back in. So I moved back in, but quickly realised I could not afford my outgoings without renting the rooms so I rented them, when they became aware of that, they informed me I was in breech

or is this a new issue that has arisen during the two years.

Customer: replied 12 days ago.
The cladding issue only became apparent after the consent to let, when I tried to remortgage

Ok and I am assuming you cannot sell due to the same issue.

Customer: replied 12 days ago.
Background to the leasing and Consent To Let (CTL) of 38 Morris Blitz Court (38MB):38 Morris Blitz was purchased in 2015 as a residential dwelling.In 2019 my partner and I applied for a mortgage to buy 3A Sabine Road (3A) also with Clydesdale Bank (CB), at that time the proof of income provided was of mine and my partners salary combined with my rental income, a portion of that income coming from the leasing of the 38MB.Near the time of application, I received CTL for 38MB from CB. Clearly at that time CB was aware that I was an intended to continue to be a landlord and that this income would be a key revenue stream for the payment of my loan on 3A.Between may 2019 when I purchased 3A and the expiry of my CTL several things happened;Firstly: the Cladding crisis/EWS1 leading to some properties becoming £0 valued for mortgage purposes. 38MB sadly and I believe incorrectly failed its EWS1 inspection receiving a B2 ratings, Hackney Council who are the freeholders have no plans for remediation works. The effect is that this property can no longer be remortgaged or in all likelihood sold at a fair market value.Second: the pandemic and subsequent government response to evictions created an environment where tenants either could not or would not pay and central London properties like mine were disproportionally effected.Third: I contracted Covid severely in April 2020, the condition was debilitating both physically and mentally and combined with the stress caused by the situation outlined above, lead to a depressive episode of which I am still recovering.Upon expiry of my CTL which roughly coincided with the expiry of my initial fixed rate I was informed that my options from CB were;1) Cease renting the property and re-enter as the owner and move onto a different fixed term product.
2) Remortgage to another provider
3) SellThese leads to an obvious predicament, CB offered me a mortgage on 3A underwritten by rental income which CB are then also demanding that I cease.Having made multiple attempts to secure alternative leading and being prevented by the EWS1 issue I was left on a SVR of 5%+ while being told that I can no longer use the property as a rental asset. The increase in mortgage costs while being losing a substation revenue stream would simply bankrupt me. For no other reason that CB did not wish to extend my CTL and refused to offer me a suitable alternative product.Given that I had informed CB that the property had failed the EWS1 form and was hence both unsellable and unmortgageable I was left with only one option which was to reenter the property.It is clear that in 2019 both CB and myself were acting in good faith, CB understood that my rental income was a substantial element of my earnings, that 38MB as an asset was a fundamental part of that income. CB and my expectation was that I would either secure alternative leading or move to a BLT product offered by CB upon expiration of my initial term.It is my opinion that CB has duty pay due regard to the interests of its customers and treat them fairly, in this instance it would seem perverse that I have a loan offer extended (on 3A) on the basis of an income stream then have CB demand that cease. Furthermore, it is my understanding that on the expiration of an initial mortgage term a mortgage provider has a duty to offer a suitable alternative product or solution; In this instance that would be a BTL or CTL.To recap, CB has made me two separate loans, the second on 3A was reliant on the income stream in part generated by the first 38MB. Due to factors outside of our control we find ourselves here

Ok so although the lenders have stated that you will have the option to remortgage due to cladding issues, they now cannot do this even if they wanted to as it would cause them to act unlawfully so until cladding is fixed, that is not going to be possible.  However they could potentially offer a new residential mortgage, but I don't know their reasoning as to why that is not happening.  Therefore it looks like your option (outside legal action) is to sell, you can still sell a property with cladding issues, but of course you have to disclose this and it will be difficult to do.  Due to the cladding issues you unlikely be allowed to rent out regardless of what type of mortgage.  Therefore you may have to see if you can legally have your terms changed on the mortgage you have.  What you will need to be aware of is that a if you continue to breach the terms of the agreement they will have the legal right to terminate your agreement.  Therefore I would firstly advise immediately putting this issue forward to the finical ombudsman service.

The court asks for you to attempt to mitigate the issue personally prior to intimating court action. Therefore, you will require to raise an official complaint with your provider, if you exhaust this issue and are unable to remedy the situation, you can escalate this matter. You will want to escalate this to the relevant ombudsman (i.e. financial, consumer etc.). The ombudsman can look at your case and evidence you provide, and undertake an independent review and investigation of the matter. Should the ombudsman see fit, they could potentially provide a remedy to the issue for you. However, if you do to obtain a remedy from the ombudsman or you do not agree with their decision, you can look at personal intimating legal action yourself.

Rightly or wrongly, if you are in breach of a contract and they terminate it, this can cause much larger issues.  Therefore you will want to deal with this immediately.  If possible it may be advisable to instruct a representative in the matter.

The court asks for you to attempt to mitigate the issue personally prior to intimating court action. Therefore, you will require to raise an official complaint with your provider, if you exhaust this issue and are unable to remedy the situation, you can escalate this matter. You will want to escalate this to the relevant ombudsman (i.e. financial, consumer etc.). The ombudsman can look at your case and evidence you provide, and undertake an independent review and investigation of the matter. Should the ombudsman see fit, they could potentially provide a remedy to the issue for you. However, if you do to obtain a remedy from the ombudsman or you do not agree with their decision, you can look at personal intimating legal action yourself.

I shall provide you with a helpful link that will assist you in finding a solicitor/representative near your local area. This will provide you with someone nearby your area who can assist you if required.

I hope this information proved helpful. You will find a local solicitor who deals with these matters on the law society webpage which is as follows;

https://solicitors.lawsociety.org.uk/ (England)

https://www.lawscot.org.uk/find-a-solicitor/ (Scotland)

https://www.lawsociety.ie/Find-a-Solicitor/Solicitor-Firm-Search/ (Ireland)

https://www.lawsoc-ni.org/solicitors (N. Ireland)

Hopefully, I have answered your query in a way that is simple and easy to understand. If anything remains unclear, I will be more than happy to clarify it for you. In the meantime, thank you once again for using our services.

Should you require any further assistance on this matter, please do not hesitate to post a further questions for additional assistance.

Kindest Regards.


Customer: replied 12 days ago.
I have to say that your are incorrect about being able to rent the property, perversely you can still rent properties with cladding, unless you know otherwise?

I said you "may not" it will depend on the local authority as it changes for each one.

Customer: replied 12 days ago.
why would the mortgage providers be acting unlawfully to give me a new mortgage? My understanding is that your existing provider is still supposed to offer you new products

It could likely be an insurance issue for them.   However, if you can (as you state) lawfully rent the property out moving forward,  then I agree yes, they should be offering you a new mortgage, if that was in your original agreement, and if they are not doing so you could potentially argue they are breaching your contract by not allowing this.  However it will depend on the specific terms of the original agreement and the reasons for not providing the new mortgage.  Did they say specifically why?

Customer: replied 12 days ago.
At the time my CTL expired, their internal policy on BTL mortgages was that the borrer must have over 50% of their income from non-rental income. In my opinion should have only been applied to new applicants not existing borrowers, and certainly not ones who you have extended a mortgage to on the basis of the rental income
Customer: replied 12 days ago.
They are effectively preventing me from earning money to pay them on two loans, one of those loans which was underwritten income generated by the first!

Yes, and if you win a case abasing them (or get ombudsman decision) you can claim for any losses you have incurred.

Customer: replied 12 days ago.
You would think if they actually looked at the facts here, it is much more sensible for them to find a solution which they are in their powers to make, i.e. allow me a second content to let or a BTL product and wait for the cladding crisis to blow over...
Customer: replied 12 days ago.
what is my best course of action to get them to consider this properly and not in a "computer says no" simplistic fashion which seems to be the current issue.

They are obviously not going to, therefore go to the ombudsman and they will have to.  As I stated, deal with the breach issues immediately.

Customer: replied 12 days ago.
How can I deal with the breach issue immediately? I cant simply boot tenants out.
Customer: replied 12 days ago.
I cannot afford my mortgage without that income for reasons previously stated

Unfortunately that would be thee solution and I understand that.  In which case I would send a letter saying you feel they are in breach and are going to ombudsman and until a decision is reached the tenants are staying.   Applying the law I would advise simply get rid of the tenants.  However I understand the very difficult predicament.

Customer: replied 12 days ago.
does taking them to the Ombudsman not increase the chances of the situation becoming hostile?

I would certainly hope not.

Customer: replied 12 days ago.
haha! Hope! the killer...
Customer: replied 12 days ago.
In terms of these things effecting my credit rating... what will happen?

In my experience, it shouldn't i.e they won't "punish" you for doing this.

Customer: replied 12 days ago.
I have written to them via email to request CLT again, as I was instructed today on the phone, but not not hold much hope, should I await the reply to that first?

No I wouldn't waste time, speak to ombudsman tomorrow.

Customer: replied 12 days ago.
really... ok, thank you. Is that handled via email or phone?

If you go on their website you can do it there or call them.

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