BTL Remortgaging: ‘Occupier’s Consent & Postponement Deed’ – WTF Is This Shit?

There’s always a gigantic element of risk when I blog about an issue that’s utterly trivial and focused on my own circumstances, because it’s bound to be totally irrelevant to 99.9999% of you, which means you probably won’t give a flying shit about whatever it is I’m banging on about. And since I am a people-pleaser and crave your warmth, it’s a practice that scares me senseless and goes against my very nature.

However, some times I gots to do what I gots to do, because right now this current episode is my lousy landlord life. But more importantly, somewhere along the line, most likely once in a blue moon, this is going to help some poor lost soul that has nowhere else to turn, and that’s all the encouragement I need to do this. But make no mistake, this car-crash piece is certainly almost completely useless and almost prime for abandonment. On note that, you may as well stick around.

Question: when did remortgaging a BTL mortgage become such a royal pain in the ass?

Perhaps that’s a question for another day, because right now I’m still jumping through hoops and dancing to whatever tune my to-be mortgage underwriter’s are playing- I’m doing whatever it takes to push a mortgage deal through.

As with most mortgages, there’s bullshit obligatory paperwork and bureaucracy, which can be emotionally draining, and of course worrying because there’s a lot of money on the line. I’m eager to wrap this up… like, YESTERDAY! But unfortunately, someone is making me work for it. Hard. I usually only reserve these energy levels for worthwhile causes, like on those rare occasions when I walk out of a club empty-handed, which leaves me scurrying around for the vulnerable ‘scraps’ that everyone else, even those wearing bigger beer-goggles than me, passed on. It’s a pretty sad state of affairs, but I’m like a worker bee. Pure solider.

Alas, I’m having to dip into those reserves to get through my remortgaging ordeal. Sigh.

Somehow, albeit lifelessly, I’ve managed to keep my head in the game. But it’s taken its toll, I have partially surrendered; at this point I’m just blindly printing off reels of bank statements they (the lender) keep requesting, hoping they eventually find what they’re looking for. I’m also aimlessly signing every dotted line my mortgage broker throws under my nose. I wouldn’t be surprised if he owns my properties and the rights to my penis.

I’ll spare you from the nitty gritty, but my employment status has changed in the last few years, so my particular case is slightly more complicated and shit than usual. But I still maintain that remortgaging in general has become much more of a pain than it used to be. I remember when the lending criteria was solely based on the value of the rental income, they were such dangerous and beautiful times. Now the bastard lenders’ don’t even take rental income into consideration. What kind of bullshit is that? Pffft.

Anyways…

As part of the remortgaging process, I’ve received a couple of documents from my lender’s to-be (Natwest) legal representatives; the ‘Mortgage Deed’ and ‘Questionnaire Authority Form’, both pretty standard and innocent. But sandwiched in-between the familiars’, was a document which left me scratching my melon like I was drenched in lice…

Occupier’s Consent & Postponement Deed

Occupier's Consent & Postponement Deed

Occupier’s Consent & Postponement Deed

Errr… WTF is this shit?

Has anyone else received one before, which from the outset comes across as one hell of a scary piece of sheet (see what I did there? I know, “lol”)? Is this a new remortgaging standard?

It’s the first time I’ve received one, and I don’t like it. I don’t like it one iota.

In consideration of the Bank agreeing to make a mortgage advance available to the Owner on the security of the Mortgage, the occupier, being a person who is or will be in occupation of the Property, consents to the Mortgage

What’s alarming is that they appear to be asking for the occupier (my tenant) to consent to the mortgage. At least, that’s how I’m perceiving it. You too, right? Ok, cool.

Well, actually, not cool, but it’s good we’re on the same wavelength. I probably need to book in a few extra sessions with my therapist, because this document is wreaking havoc with my anxiety.

So here are my initial thoughts:

  • Never seen or heard of this document before. WTF is it? Is it specific to Natwest BTL remortgaging or remortgaging in general?
  • What does my mortgage have to do with my tenant? I’d rather burn my eyes out with my very own potent mixture of semen before getting my tenant involved with my finances. (sorry, I honestly don’t know where that came from)
  • I don’t want to hassle my tenant with this document, especially since it seems like she will need to involve a witness!
  • If I were the tenant I would NOT feel comfortable signing it, because I’d naturally assume I’d be held liable if my dip-shit landlord fell into arrears, even if every word on that document implied otherwise.
  • What if she refuses? Obviously I wouldn’t blame her, but then I’d probably have to ‘revenge evict‘ her for not complying.

    I joke. I think.

    I just don’t know anymore.

    All I do know is that I would lose a lot of money if this mortgage fell through because my tenant wasn’t willing to play ball, at which point my tenant would become a very undesirable investment.

  • Where’s my fucking therapist?

What to do, what to do…

When in doubt, ignore it!

I should have contacted my broker and asked him what the deal is; that probably would have been the most sensible option. But the deed in itself, from a landlord/tenant perspective, seemed too ridiculous to warrant serious action. So I returned the ‘Mortgage Deed’ and ‘Questionnaire Authority Form’, while slipping the ‘Occupier’s Consent & Postponement Deed’ under my bed, among my stack of smutty mags and crustified wet-wipes. Nice.

I really, really, really didn’t want to try and explain to my tenant why she should sign a consent deed for my mortgage, especially when I didn’t even understand myself. Trying to ‘blag it’ seemed like the only sensible solution.

Did I just delay the process and create complications? No idea. Maybe. Probably.

5 days later…

And… EVERYONE… BREATH…and… RELAX!!

Turns out I experienced a loss of sexual desire, irritated my complexion, lost my appetite, shit my pants, and then ironically lapsed into a state of chronic constipation and nausea… all for nothing.

I received confirmation that completion will take place next week. There was no word of the missing deed nor were there any problems flagged.

Now, the question begs to be asked, WTF is the deed for and why was it even sent to me if it’s not required (at least, it wasn’t in my case)? Was it one of those hilarious jokes that’s sole reason for existing is scare the living shit out of people? Perhaps.

Perhaps a soulless wank-stain just made an enemy for life then (not used/heard the term ‘wank-stain’ in a while, pretty amusing, especially if you have a sense of humour equivalent to a 14yr old like I do).

Conclusion

If you receive the same document under the same circumstances and consequently find yourself in a similar state of fiery despair, you needn’t worry; rinse the poop out your pants in the kitchen sink, toss the document in the bin (or under your bed with your stash) and forget it ever happened. That’s what I did anyways. I suspect the deed is not required for BTL remortgaging and therefore tenants don’t need to sign it. However, I could be wrong; I could have just been extremely lucky by ending up with an incompetent tool handle my case/paperwork. If that’s the case, I owe someone stupid a drink.

You probably should seek legal advise, just like the document says. That should set you back a cool £100, or whatever the going rate is for one minute’s worth of legal advice from a random pretentious, condescending twit :)

On a final note, I advise ALL landlords (and homeowners) to regularly scour the market for new BTL mortgage products, because you could end up saving a beautiful buttload of cheese! Remortgaging is probably one of the best ways of saving money and being a lucrative landlord.

My new policy means I’ll save £200 a month on interest payments alone, while also shortening the loan period. I’ll probably dedicate a blog post to my new mortgage at some point, most likely when I’ve lost the will to live, and have nothing better to do than compare before and after mortgage rates (I’m sure that will be orgasmic for you)! I’ll even show you mugshots of the cheap women that will benefit from my new surplus of disposable income!

I can’t imagine this post will prompt much empathy, interest and/or response… but can someone say something, please? Anything. Please!

But seriously, has anyone else received this document and consequently been rendered totally baffled and mortified?

Until next time, God bless and stay safe (it’s a bit creepy when I say stuff like that, ain’t it? And that’s precisely why I do it). I love you xo

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21 Comments- Join The Conversation...

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Adam Hosker 3rd November, 2015 @ 17:56

Well you could "seek legal advise" or you could talk to your mortgage broker.

This document is not for tenants to sign.

Put simply it is mainly for residential and those that reside with you. Say children over 17, or wife, a friend? etc.. they have implied rights and this document is to ensure later on they don't come back and bite the lender.

They are giving consent for you to proceed. Not because they own the property but to protect the later of potential future claims - if lender has to repossess etc..

Its not realy for tenants, as there rights end after Section 8 notice is served on them by a lender.

Here is a snippit from a lenders internal document for you:
http://i.imgur.com/QUNWnaW.png

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The Landlord Avatar
The Landlord 3rd November, 2015 @ 19:02

@Adam,
Ha, I was thinking about asking my broker, but then realised I couldn't be bothered. I think I like the rush of irrationally panicking.

The documents always say "seek legal advise"

I figured it was for residential properties (or at least some other kind of mortgage), but I got a little freaked out because it was specifically inside a "BTL mortgage pack"

Then I started convincing myself it might be required, because I kept reading the word occupant/occupier and automatically assumed "tenant"

God, what a pickle I got myself in :)

Thanks for clarifying, appreciate it.

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Ange 4th November, 2015 @ 09:04

Now the bastard lenders’ don’t even take my rental income into consideration. What kind of bullshit is that?

Do you think that this and the dodgy form point to them putting it through as a residential mortgage by mistake initially?

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Benji 4th November, 2015 @ 09:14

Your blog title is misleading, it should be 'consent' not 'content', doofus.

Here is an explanation of why they want it, although on a BTL mortgage, it should be covered by a ground 2 notice written into the AST;

"Consent forms are required by lenders when an adult is to be in occupation of the mortgaged property, but that occupier is not a legal owner of the property.

The reason for the requirement is that it is now established law that such an occupier can acquire a legal interest in the property, despite his or her name not being on the deeds.

When a lender takes security over a property by way of a mortgage or charge, its ultimate sanction, if things go wrong, is to repossess the property and sell it on the open market with vacant possession. In 1981, in the case of Williams & Glyn's Bank -v- Boland, the Bank tried to repossess the property. Mrs Boland lived at the property, but her name was not on the deeds and she was not, therefore, a party to the Bank's mortgage. Mrs Boland applied to the Courts for relief against possession, on the basis that she had acquired an interest in the property and the Bank had no right to force her out. The Court decided in her favour, leaving the Bank with virtually no security. This sent the lending institutions into a panic and, in order to overcome the problem, the requirement for a non owning occupier to sign a consent form came about.
All lending institutions have slightly different consent forms but the effect of them is the same. By signing the form, the occupier

(a) acknowledges that the property is to be subject to the mortgage,

(b) consents to the creation of the mortgage, and

(c) agrees with the lender that any interest that the occupier might acquire in the property would come after, or rank behind, the interest of the lender.

If Mrs Boland had signed such a form, then she would not have been able, in 1981, to prevent the Bank either from obtaining possession of the property or from forcing her out
of occupation.

An occupier asked to sign a consent form has the right to seek independent legal advice before signing and, if there are any concerns or uncertainties, an occupier is advised to
seek such independent advice."

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The Landlord Avatar
The Landlord 4th November, 2015 @ 10:50

@Ange
Nah, many lenders don't look at rental income for BTL mortgages, probably because they want to know the landlord can cover the mortgage if the tenant falls into arrears.

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The Landlord Avatar
The Landlord 4th November, 2015 @ 10:51

@Benji
Thanks, thanks, and welcome back. You've been missed.

You didn't close the italic html tag, doofus!

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Genesis 5th November, 2015 @ 15:00

I totally agree with the pain in the ass sentiment about BTL mortgages, I am pretty certain they have all rights to my life now and after I have left the realm of the living.

Just starting my journey into the landlord realms and thought I would comment say that I have found your site extremely useful. Keep up the great work Landlord! Both on and off the field of play!

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The Landlord Avatar
The Landlord 5th November, 2015 @ 23:45

@Genesis
Hey! Thanks a lot, appreciate your comments and glad you've been finding my blog useful.

What stage are you currently at? Did the mortgage go through, have you made the purchase.. etc?

Out of curiosity, who did you mortgage with?

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Genesis 6th November, 2015 @ 08:12

@The Landlord

Currently living in a two bedroom house, very similar to your first BTL property, which is ideal for renting within the area. With this in mind we decided that moving to a larger fixer upper would be the next step to build capital.

We went with The Mortgage Works (Nationwide) in the end, but this was not out of choice, unfortunately due to the weird and wonderful (money making) schemes that lenders seem to make up on the spot, we couldn't port our existing mortgage to our next property without using Nationwide's own BTL company. I won't bore you the fine print as to the reasons why, as I fear you will lose the will to live on. But the gist of it is that if we did break with Nationwide we would of been left with a huge penalty and the lender laughing their way to the bank with £4.5k in their very deep and very gold lined pockets.

Mortgage is 4.19% for 5 year fixed, I like to play safe, so though I know the rate is high, I do like the security of knowing the payments over the next five years. (Queue The Landlord saying how his is far cheaper and fixed for far longer which in turn forces myself into a crying shivery wreck in the corner thinking horrible thoughts of what to do to certain lenders)

Were getting close to completion on the next property, so not far before we can start having potential tenants viewing the property. And then I can change from a Nobody to Landlord!

Your legal part of the blog has been amazing, after speaking to the agent who will be finding the tenant before we manage, some don't seem to have a clue when it comes to the law, which I know comes as no surprise.

Any way think I rabbited on too much! And if you got this far down the comment then I'm impressed.

Keep up the great work!

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Mia 6th November, 2015 @ 14:55

It seems to be saying that if the owner defaults on his mortgage payments to the bank, any revenue from the property is legally the bank's. So if you are a landlord and are leasing from an owner of a building, in order to rent out the flats for your own income, then the bank can take your rental income ( if building owner defaults on his mortgage). And it means if YOU own the building and owe the mortgage, your tenants agree the bank gets their rent if you default.

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The Landlord Avatar
The Landlord 6th November, 2015 @ 15:24

@Genesis

Ahh nice. Going from "Nobody to Landlord! is a beautiful thang :)

Lenders love those penalty clauses. It's their bread and butter!

Haha, you'll get no lecture from me. Funny enough, I fixed for 5 years and my rate is 3.79%, with no product fee. Similarly, I prefer playing it safe and I like knowing exactly how much I'm going to pay.

There are some really nice 2yr fixed deals available at the moment, but I have a feeling in 2 years time interest rates will have climbed again, at which point remortgaging will be a suicidal affair. I'm happy to pay more for a little extra security.

Personally, I think you made a good choice.

From my experience, most agents don't know the law, they're just generic salesman, no real expertise in the field! Fortunately for them, the responsibility falls on the landlord, so the agents mostly get away with dishing duff advice. It's a real sad state of affairs.

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The Landlord Avatar
The Landlord 6th November, 2015 @ 15:45

@Mia
Apparently, based on comment #4 by Benji, it means that if the borrower defaults, the lender can repossess the property and force the occupant out.

I get it, it makes sense, because the lender wants protection against their loan. But I'm still not sure if it I should have signed it, and what the implications are of not having signed it.

If it is required, I wonder how many tenants would actually feel comfortable signing one.

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Bigcimp 6th November, 2015 @ 21:14

I feel your pain, even more so if you used their free legals service with optima solicitors. A truly awful experience that I'd happily give up some of my hard earned rent money to avoid in future.

I had my tenants (the best kind - pay early and ask no stupid questions, the envy of all landlords) fill in this form before natwest would proceed.

I'd be uncomfortable about my other tenants filling this sort of form in who would no doubt require endless explaining/convincing to go along with this.

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The Landlord Avatar
The Landlord 9th November, 2015 @ 11:07

@Bigcimp,

Hah, yeah, it was Optima who were working on behalf of Natwest and who sent me the documents, but I didn't deal with them beyond sending the documents back. Sounds like I was lucky there were no complications. It was actually a smooth process, so I'm grateful for that.

Interesting. So you were actually required to get the form complete? Was it a standard BTL remortgage?

I wonder how I got away with it then!

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Genesis 9th November, 2015 @ 13:47

@The Landlord

My thoughts exactly, glad someone agrees with me! Though over the 5 years it may well be cheaper to go with a great rate now, and an ok rate in 2 years time. But for me I would rather not have the stress of watching the rates closely and worrying what will be in 2 years, which I agree with you about being a 'suicidal affair'. 3.79% for a 5 year fixed is a great rate, I think you can be happy with that.

My last stress with the crazy house is that the chap before hand thought it was a genius idea to install aircon in the house...think he had grand ideas about global warming! But instead what it's done is made the legionnaires assessment really confusing. Think I'll play on the side of caution and get the whole thing serviced! Seems like the only sensible option.

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The Landlord Avatar
The Landlord 9th November, 2015 @ 14:20

@Genesis
To be honest, I'm not even convinced the rates will be "ok" in 2 years times. Either way, like you said, we are in the privileged position of not having to monitor interest rates for a while :)

In regards to the aircon- I don't know your specific circumstances, but I would be tempted to remove/block it off, because you need to remember that once you provide a facility like that, you'll be obligated to maintain it and ensure it's always working. In this country, I can't imagine you'll get your money back for aircon, so it might make more sense to pay to have it properly removed! Perhaps something to consider.

For example, I had a property that came with a cheap shitty electric fireplace; it didn't do anything for the property or the rental income. Instead of replacing it, I just had it completely removed and re-plastered the wall, because if it breaks in the future, that's another hassle/expense.

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Genesis 10th November, 2015 @ 09:47

@The Landlord

Funnily enough, I did that with the aircon in the lounge, 1. Cos it was an unsightly beast 2. It got in way of the projector screen 3. I don't need my room to be a freezer and 4. Because of the view it would be expensive to fix.

The one in the bedroom has been fixed in, good and proper. Did have a chap to have a look at removing it when we took out the lounge one but this was going to cost a small fortune and mean a nicely decorated room/front of house would be partially destroyed.

So I weighed up the cost/time and decided to keep it. I think your right, that the sensible option would of been to remove/cap. But so close to moving I decided to keep it for the first tenant, and once they have decided to destroy the house themselves, it will make it a lot easier to rip down the walls! I'm sure this decision will firmly come back to bite me in the ass!

Thanks for the advice though really appreciate it, its handy to know I'm thinking along the same lines.

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andrewa 15th November, 2015 @ 18:15

Course the other reason (at least where I live) could be if you have a tenant with say a 5 year lease, while the bank can take the rent and re-posses the property they cannot sell the house on without the remainder of the pre-existing lease having to be carried by the new purchaser. Now imagine you are going to be foreclosed on, so you sign a lease with your brother to rent the property to be foreclosed for 40 years at say 10 quid a month?

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Bigcimp 18th November, 2015 @ 22:17

@The Landlord

Yes Optima wanted all the paperwork. Probably a inexperienced jobs worth dealing with mine, I wasn't fussed as tenants are great at that property and it was due an inspection visit.
I would have kicked off had it been a different property with different tenants.

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C. Bradley 11th February, 2016 @ 23:29

Hi , my daughter has received a demand from the lenders solicitor to sign that exact consent form from Santander. Got her very worried because the new landlord (trying to buy the property with tenants still got 5 months left on Assured Shorthold Tenancy) and they are students in their final year. It says they are signing that if the new landlord defaults the bank would take immediate possession and throw them out.
I do have access to legal sources and have written a letter to the solicitors stating the consent will NOT be signed. It is the Lenders way of trying to circumvent the 2002 Land Registry Act (schedule 1 to 3) and the Mortgage repossessionAct 2010 which were designed to stop lenders sending bailiffs around to tenants who had no idea that their landlord they had paid regularly had defaulted. As you say with BTL there is some protection to give notice as normal rather than immediate possession as the lender cannot claim that the landlord did not inform them of tenants as that is the purpose of BTL. Interestingly the 2010 act was to help tenants where some landlords had 'unauthorised' mortgages i.e. residential ones without informing the lender. It gives the tenants up to 2 months to sort alternative accomodation. I'm with you guys you should not have to upset or involve your tenants who quite rightly may or will ask to see your mortgage and proof etc before signing. All pointless and is being abused by lenders and their legal representatives who should only use this for occupiers who could have a charge on the property (like relatives etc) when a property is being sold. Perhaps they should change it to state a date by which the occupier would leave in the event of repossession, which would be normally the end of the tenancy or 2 months from the default.
Its hard enough for good landlords and good tenants without complications imposed for particular circumstances.
Interesting Andrewa above, I suspect the example you give would be a breach of the mortgage agreement (to give that lease) so would be covered by the 2010 act or similar i.e. could be re-possessed earlier (would probably go to court though)

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andrewa 11th February, 2016 @ 23:49

@C Bradley

Well done on not signing, I live in South Africa where we have a mixture of British and Roman Dutch common law and "Huur gaan voor koop" or renter before purchaser so your last sentence is correct, the mortgage agreement limits leases to 1 year before a renewal is necessary. I assume that as your daughter has an "assured tenancy" for a specific remaining time she cannot be kicked out as long as she pays the rent unless she either signs their agreement or gets "Rachmanned" by the heavy mob.

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