ASK THE EXPERT


A. It sounds as though your friend, through no fault of her own, was what is known in the trade as an “unauthorised tenant,” which basically means that her landlord was renting the flat to her without the knowledge or consent of the lender, and in contravention of the mortgage agreement.
Generally speaking, this is no more than a genuine oversight on the part of the landlord. It’s an easy mistake to make, particularly among the growing number of “amateur” landlords who for whatever reason decide to rent out their property rather than selling it.
But what might seem like little more than a technicality could have serious repercussions for tenants like your friend, who found themselves with little or no legal protection in the event that their landlord subsequently defaulted on their mortgage and faced repossession proceedings. In many cases, the first the hapless tenant would know about it was when a court summons was delivered, or the bailiffs turned up on the doorstep.
However, the good news is that this situation has now been addressed, through the medium of the snappily-titled Mortgage Repossessions (Protection of Tenants etc) Act 2010. Actually passed by the previous Government, and supported by the then Conservative Opposition, this legislation finally came into force at the beginning of this month.
Under the new rules, lenders must ensure that tenants are given due warning that their home is going to be repossessed, by sending a “To Whom It May Concern” letter to the property, giving notice of the court hearing date. Tenants will for the first time be able to attend that hearing if they wish, and judges will be able to take their situation into account in making their rulings. Once a repossession order has been granted, the lender must send a second letter to the property, informing the tenants, who can then request a delay of up to 2 months (assuming they haven’t previously had the opportunity to do so) to give themselves more time to find a new home.