This is a question to the blog clinic from Jo who is a landlord living in Australia
What a nightmare….Am living in Australia , had a total nightmare with rougue tenants about 18 months ago. After a 9 month expensive battle through the legal process, they were evicted (they agreed to move out if we waved all their 7k rent arrears).
We ended up with 3k in mortgage arrears but on good terms with our mortgage company, New tenants moved in and there was a shortfall in rent to mortgage of 300 per month which we have been covering.
In Jan out of the blue LPA receivers had been appointed. We haflagged up that comparable properties were going for 250 more pcm & LPA said they would take rent increase into consideration when they make their reccomendation but they have a “responsibility to the tenants”
Just spoke to Northern Rock & tenants evicted & the property is now about to be sold but it’s the first I’ve head of it !! No letter, email, phone call..zilch !
Northern Roch said they tried to call me once but then realized the time differece in Australia so left it???? Surely they had an obligation to tell me they were evicting my tenants?
They also claim there’s 5k of maintanancebut they don’t know what the work is… again, first I’ve heard of it. This surpises me as in the last 12 months I’ve replaced the windows, gate, storm porched re-built & my letting agennt did an inspection for me just prior to LPA takeover in March & no work to be done then.
Valuations for sales are 25k less than I paid 7 years ago leaving me with a large debt.Can they really just evict my tenants without even contacting me?
This all does not seem right at all. I realise that Northern Rock want to wipe their books clean & “buy to let” properties are the firat to go, but it was my home for 3 years before I emigrated and it feels like I am being treated like a greedy bad landlord.
I’ve done everything possible to do the right thing the whole way through. Any good advice will be gratefully received.
This is really a mortgage / mortgagee problem rather than a landlord and tenant one and mortgage repossession is not really my area. So I put up this question partly as an Awful Warning to ex pat landlords and partly to see if any readers have suggestioins.
My view is that you are at an enormous disadvantage being in Australia and that you need to get a representative in England acting for you. The best option would probably be a firm of solicitors who deal with mortgage repossession work as they can write to the company on your behalf and will know the score.
However as it is now after the event and the tenants have been evicted, it may be hard for them to achieve anything. What does anyone else think?
Unfortunately, yes, the LPA can do that, and we know from experience of dealing with this kind of thing that they can be very heavy handed.With NRAM in particular their sole aim is to get your property off their books, regardless of cost to you. The only way you can deal with it is legally, which is not cheap and can be a long drawn out process over several months.
By evicting your tenant they make their own case stronger as it will likely put you further into arrears.Even if tenants have been evicted something can still be done but it does take nerves of steel and someone who knows the law and system inside out.There are several blogs on our site which help you understand the process, which is to lengthy to go into here.
Many thanks Roberta.
If anyone wants to visit Roberta’s site you will find it here : http://mypropertymentor.co.uk/
I worked for NBS for almost 25 years and the details given here are just unbelievable.
For example since when does an LPA have any responsibility towards tenants (unless they mean their Principal, the lender!!)
What all borrowers do not realise is that a lender does not need to have gone through normal possession procedures, and actually be mortgagee in possession, in order to then appoint a Receiver under LPA 1925.
But the lender should only do so after exhaustive discussions and negotiations with the borrower, and of course tell them that is their decision, to appoint a Receiver of Rents under the powers they have.
The problem here clearly is one of communication. Someone at the lender’s has suddenly not liked the look of the exposure they had with your £3000 arrears – probably a new manager or a new policy or both – and decided to appoint the Receiver instead.
The key point in your comment is that you said “the lender should only do so after exhaustive discussions and negotiations”- and I can tell you from experience that in many cases little discussion or negotiation is done if any.Banks are behaving as they wish and flouting rules just so they can lessen their own loan books,even when rented properties are in profit.
What happened in the past is not necessarily what is happening now.
Our experts deal mainly with commercial mortgage providers which do use LPA’s, and yes, we have seen LPA sent in over BTL property portfolios and single large value ones.
However, as Tessa said above, this website deals with legal issues for landlords and tenants not mortgages, so is perhaps not the place to discuss it really.
Thanks for your comments Roberta.
Landlord Law Blog is mainly about landlord and tenant law but if you want to discuss the mortgage repossession question in this comments section that is fine by me and may be helpful to landlords in difficulty reading this post.
However maybe confine comments to residential tenancy situations.