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More and more number of tenants are seeking proof that the homeowner has the permission to rent the property.

Date: (5 May 2012)    |    

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A problem which would affect the amateur landlords for example those who choose to let their property till they could find a buyer, many of the homeowner’s don not take the lenders permission to let as they may have to pay more mortgage costs.
The reasons why a tenant would seek such permission is that they can find themselves in a bad position if the landlord defaults on his payments which could lead to tenants going homeless and forced to find new rental property.
Mary Charsley associate director of letting agent APW Management and a member of the Association of Residential letting Agents say they were seeing more instances of our corporate tenants looking for copies of clients' lenders' consent to letting.
She pointed out that in the past an assurance that lenders have given consent for the owner to rent out the property was enough, and many tenants didn’t ask anyway.
Nowadays, relocation agents acting on behalf of corporate clients were looking to have a copy of the consent before they proceed with an offer,' Charsley says. Some very large corporate tenants were even asking to have sight of it before they showed a property to a potential assignee just in case it is not eventually forthcoming and the company is not able to proceed with a tenancy on a property the assignee has chosen.'
Tim Hyatt, president of ARLA, confirmed the trend. He said that its research showed that around 10% of tenants were asking for references on a potential landlord. The problem for the landlord was that by renting their home they are almost certainly in breach of the terms of their residential mortgage.
Technically, the lender can demand immediate full repayment of the loan, although few would actually do this if the monthly payments were being made. Most would expect the homeowner to switch to a buy-to-let loan or at the very least pay a higher interest rate.
From the tenant’s point of view, they have done nothing wrong by renting from a landlord who has failed to tell the lender that the property is being let. But if the landlord is letting because they are in financial difficulties, they probably face an increased risk of being asked to leave if the landlord defaults. The lender will probably want vacant possession if they foreclose and force a sale.