Tenants to be given 5 to 7 weeks’ notice of landlord repossession

Posted under General by Michael

The increase in repossessions and mortgage arrears reported by the Council of Mortgage Lenders (CML) is making tenants worried as they are paying rent regularly but landlords could be failing to pay their mortgages on time.

CML has observed that repossessions of properties where tenants are staying, generally takes place when homeowners fail to obtain permission from their lenders for letting.

For any private residential mortgage it is contractually binding on landlord to inform lender that property is being let.

New measures that will protect tenants from losing their homes due to landlords’ failure in payment of mortgage will come into force from 6th April 2009. Under new rules, tenants will be given notice of court hearing for repossession, 5 to 7 weeks in advance in order to save them from inconvenience.

The Council of Mortgage Lenders is reminding people occupying rented accommodation to open correspondence addressed to “occupier”. This is how tenants will be served notice regarding action being taken against the landlord or borrower.

As reported by CML, repossession rate in the fourth quarter of 2008, stood at 0.11%, which is in line with the wider market.

CML is also advising that tenants, in most cases of defaulting buy-to-let landlords, would be able to continue living in property with sufficient notice to look for alternate accommodation, even if lender decides to sell it.

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