ADVICE GUIDE: You, like me, probably get the occasional letter addressed to the occupier, writes Samir Jeraj. Normally it’s some annoying direct marketing campaign or someone trying to get you sell or refinance your house. For one couple in Colchester, it brought more brutal news.
- Samir Jeraj is a journalist with a focus on issues in private rented housing. He was a Green Party councillor in Norwich from 2008-2012
‘We moved into a flat in the centre of Colchester rented from a landlord. The place was grotty but everything was OK for nine months. After nine months we received a letter to the occupier which was a 10-day eviction notice because he hadn’t paid the mortgage. It really pulls the rug from out of you.’
Renting can always seem precarious, but what can you do when someone else’s decisions lead to you getting an eviction notice? The case above (provided by Shelter) was one where the landlord had been declared bankrupt.
I checked with the Insolvency Service and they don’t yet hold statistics on how many landlords or lettings agents are declared bankrupt each year. They’re hoping to change the way they record information.
For the couple in the case above, it’s left a personal record: ‘Every time a letter comes through the post, you think is this happening again. It really leaves a mark.’
But, there are things you can do if this happens to you.
First, a quick explanation of bankruptcy. A person with £750 or more unsecured debts can have a bankruptcy petition filed against them in the County Court. This could be filed by one or more of the people they owe money to in the hope that they can get some of the money they’re owed back. It can also be filed by the person themselves as a way to write off their debts. After a bankruptcy order is made by the Judge, the property of the person is taken over by the ‘Official Receiver’ (a civil servant) who then tries to sell off the property and compensate the people who are owed money.
So, where does that leave you as a tenant? Well, it depends on if you have a binding tenancy or a non-binding one. At the end of the day, the lender or new landlord will be able to evict you if they want to. Your options are to persuade them to let you stay, or delay your eviction.
According to Chris Norris, head of policy at the National Landlords Association:
‘If a landlord is declared bankrupt usually the mortgage lender will take over all existing affairs and assets, including the terms under which the tenancy was agreed with the tenant.’
If there’s no mortgage lender and the landlord owns the property in their own right, tenants’ rights should not change, you just need to pay your rent to the new landlord.
So what’s the difference between binding and non-binding tenancies?
Shelter, Crisis, CAB, and the CiH ran a successful campaign on the impact of repossession on private tenants, which led to a strengthening of tenants’ rights from 1st October 2010. According to their research, the number of buy to let properties being repossessed doubled from 1100 in 2007 to 2300 in 2008 with a projected rise to 8000 in 2009. By December 2008 there were 26800 buy to let mortgages in arrears.
According to the advice on the Shelter website, most tenancies are not binding on the mortgage lender. If your tenancy is binding, then the new owner becomes your landlord after the property has been repossessed – they need to go through a separate eviction process under the terms of your tenancy agreement if they want rid of you.
For non-binding tenancies, you can delay the eviction by two months if you apply to the courts at the repossession hearing, after the possession order, or at the warrant stage. Shelter recommend:
‘As soon as you become aware that repossession is a possibility, you should contact the lender and ask them to delay repossession for up to two months to give you more time to find somewhere to live. If the lender does not agree to give you more time, you should then contact the court to request that they order the lender to delay possession to give you time to find alternative accommodation.’