Your tenancy could be at risk if your landlord doesn't pay the mortgage on your home. Find out when you may be able to stay.
What is a binding tenancy
A binding tenancy means you become a tenant of the mortgage lender if a repossession order is made against your landlord.
The lender would need to take separate eviction action to end your tenancy if they want you to leave.
If you don't have a binding tenancy
Your tenancy is still legal but the lender can ask bailiffs to evict you if they get a possession order against the landlord.
You can ask the court to delay the possession date for up to 2 months to give you more time to find somewhere else to live.
Check if you have a binding tenancy
You could have a binding tenancy if either:
- your landlord has a buy to let mortgage
- the tenancy started before the mortgage
Buy to let mortgages
Your tenancy is usually binding on the lender if your landlord has a buy to let mortgage.
Don't assume it's a buy to let mortgage just because it's a rented property. Your landlord might have let the property out without the lender's agreement.
Tenancies that started before the mortgage
Ask the landlord or lender's solicitors when the mortgage started.
You can also search the Land Registry. It costs £3 and you get the information by email.
In most cases, a lender will ask existing tenants to sign a waiver before they grant the mortgage. If you signed a waiver, you're unlikely to have a binding tenancy.
Contact with your landlord's lender
The lender must try to find out if there's a tenant in the property before they start repossession action.
You should get a letter from the lender addressed to 'the occupiers' once action starts.
Let the lender know if you believe you have a binding tenancy. You may need evidence such as your original and current tenancy agreement.
The lender's solicitors should communicate with you about repossession proceedings. They won't be able to tell you about your landlord's financial situation.
Appointment of a receiver by the lender
If the lender accepts that you have a binding tenancy they may appoint a receiver instead of taking repossession action.
This is quite common if your landlord has a buy to let mortgage especially if you have a fixed term tenancy agreement.
The lender might write and ask you to pay rent to a receiver instead of your landlord.
If this happens, you should pay the receiver even if your landlord or agent say you must continue to pay them.
You should still:
- contact your landlord or agent about repairs
- give your landlord notice if you decide to end your tenancy
A receiver has the power to sell the property. If it's sold while you're still living there, your tenancy continues and the buyer will be your new landlord.
If the lender tries to repossess your landlord
You can get more information and attend the repossession hearing if you're joined to the court proceedings.
Use Form N244 to ask to be joined to the proceedings. You should do this before the hearing.
At the repossession hearing
You can speak at the hearing if you've been joined to proceedings.
You will need evidence that you have a binding tenancy if the lender has not accepted this already.
If the court makes a possession order
You become a tenant of the lender when the date for possession arrives if you have a binding tenancy.
The lender takes on responsibility for things like repairs and protecting your deposit. They should provide clear details of where to pay your rent and tell you if they sell the property.
If you don't have a binding tenancy, the lender can ask bailiffs to evict you if you stay past the possession date in the order. You can ask the council for help if you're facing eviction.
Last updated 25 Oct 2019 | © Shelter
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