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Alex J.
Alex J., Solicitor
Category: Property Law
Satisfied Customers: 3844
Experience:  Two years conveyancing experience.
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Hi there, I am an owner of 13 buy to let properties. I have

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Hi there, I am an owner of 13 buy to let properties. I have been letting them on 12 month AST's to students for about 10 years now. As all properties are in mine and my partners names, we are paying extortionate tax. Recently, I have been advised by an Accountant to form a company, let the houses to the company, who in turn lets them to the students, therefore reducing my personal tax liability. I have asked my mortgage company if I can do this under the terms of my mortgage, but they will not allow me to do this. In fact, they have told me that they only allow 6 month ASTs, so technically I have been breaching my agreement all along. What I want to ask is.....If I do this without the knowledge of my lenders, am I breaking any law, or am I just breaching the terms of my mortgage? What are the consequences for both scenarios?

Thank you for your question and welcome.

My name is XXXXX XXXXX I will assist you.

By breaching the terms of the mortgage it is a contractual breach. In theory you would be liable in damages for any loss suffered by the bank. However if you are servicing the mortgage then this is not really any issue as realistically what damage will the suffer. The concern I would have is you need to check if by making this breach it allows them to call in the loans.

What you are doing would only be a crime (i.e fraudulent) if you deliberately concealed it from the bank. I.e if asked you deny that you have done it.

I look forward to hearing from you.

Kind regards

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