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

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

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?

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."

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!

@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!

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.

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.

@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.

@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.

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?

@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.

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)

@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.

In my case, the case worker sent that form separately to my tenant (not along with my questionnaire!), This is very annoying and I never in million years would have let my tenant to sign this?! - Mortgage is still under process and my tenant obviously doesnt want to sign anything - I dont knw what should I do

Wow so glad you have posted this. I know it over 5 years old now but I am in exactly the same position and absolutely no way will I ask my tenant to sign that document. My tenant has no idea who I am other than my company name on the tenancy agreement and that’s exactly how I want it to stay. Over the years I have had tenants know who I am and have all sorts of wants and requests including not paying rent for a few months because they were going on holiday. Even the idea of going round, introducing myself and then hitting them with that document makes me very uneasy and also I feel for the tenant.... someone you have never met wanting you to sign something that takes away your rights and somewhere you call home for you and your family like that seems to do is an absolute no no for me. I’m not going to bother remortgaging and will do it when I have a tenant change.