House repossessed, what happens now? Advice pls

[rm1301]

Hello all,

 

I'm seeking some advice from those in the know about what is the likely outcome for a work colleague of mine. I'm kinda stuck in the middle and really don't want to get involved but I'm concerned for my colleague's welfare.

 

To summarise :

 

He and another guy rent a house from another guy I know. I don't know the LL too well, we used to work together some years ago and are still in contact. To make it easier to explain let's call them Alan (current work colleague who is renting the shared house), Brian (other guy who is renting shared house) and Charlie (LL and old work colleague of mine).

 

Charlie goes to the house each month to collect the rent in cash and signs off the rent book etc. Alan and Brian each have a 6 month AST from a year ago which is now on the rolling period. Everything has being going hunkydory and the relationship between them all has been good.

 

Fast forward to Jan 2010 and amongst the mountain of mail that comes for Charlie, there was a letter addressed to the current tenant with 'official notice' plastered all over it. Alan opens it up and it's advanced notice of a repossession taking place with a court date set for this month (now been and gone). Alan gets on the dog and bone to Charlie who apparently played it all down and told him that it was a mistake and nothing to worry about etc. Alan not really being the brightest crayon in the box eventually took his word for it and forgot about it .

 

Charlie was due to go to collect this months rent at the start of Feb but never showed up and whenever Alan has tried to ring him the phone now has a dead tone.

 

I happened to bump into Charlie in the supermarket a few days ago and we decided to meet up for a drink. He doesn't think I'm still in contact with Alan so when we got talking about houses the whole story came out.. To cut a long story short, he hasn't paid the mortgage since March 09 as he lost his job and wasn't able to claim anything. Basically the guy is completely broke. He knows about the repo notice from when Alan called him about it, but didn't go to the court hearing and is basically happy for them to take the house back . The important bit though is that he didn't have the lender's permission to let it out.

 

Now like I said above I really don't want to get involved with all this but I'm concerned what the likely outcome is for the tenants? I know from what Charlie said that the outstanding mortgage amount and the current property value are roughly the same so would the lender really want to repossess it when they are unlikely to recoup their losses in the current market?

 

The combined rent from Alan and Brian is more-or-less the same as what the monthly mortgage repayments were so if they are willing to pay that to the lender would the lender likely agree or would they be served with an eviction notice regardless? As mentioned above, they do both have a proper AST but I seem to recall reading somewhere that this doesn't make any difference if the mortgagee doesn't have permission to the let it out.

 

Anyone know how the banks (lender) work in this scenario? The lender is Alliance + Leicester if it makes any difference.

 

Thanks all.

[Big_Bother!]

Hi If its a Buy to Let mortgage then it will only be in Charlies name. Same as any other mortgage. They don't have much say in the matter.

What I would do is get them to see the local council housing dept- quickly, or Shelter, CAB and any others who may help. Unfortunatly with this type of teenacy there is not much they can do. Good luck.