Minggu, 10 Februari 2013

Mortgagees, please take note

An interesting snippet in the news last week told us that investors tend to default on a home-loan about 1.5 times more than owner/occupiers do. We can't say we're surprised by this - we often hear about tenants having to fend off the bank when the landlord goes belly-up.

In fact, it occurs so frequently that we've written a factsheet about it - you can find it here. We've also discussed it previously on the Brown Couch.

As it happens, it's a very good idea to familiarise yourself with the process of what we call a 'mortgagee eviction', because the banks (and their lawyers) don't always deliver the right message. All too often we're seeing copies of letters that look like this:

It is a piece of correspondence that is apparently designed to replicate an official notice. It says:


1. You are in occupation of the Property.
2. The Mortgagee has not consented to your occupation of the Property.
3. The Mortgagee is now entitled to take possession of and sell the Property.
4. The Mortgagee requests that you vacate the Property by xx/xx/xxxx.
5. If you do not comply with this notice, the Mortgagee will immediately exercise its rights under the mortgage, including its right to take immediate possession of the Property and to sell the Property.
6. The Mortgagee makes no admission that you have any interest in or right to occupy the Property.
7. The Mortgagee reserves its rights, irrespective of your compliance with this notice, to evict you from the Property immediately.

But the grounds upon which a demand of this kind - for a tenant to surrender a property to the mortgagee - are spurious. In fact, acting in compliance with a notice like this one could land you in a spot of bother. If the landlord comes good with their mortgage payments before the mortgagee obtains an actual order in the Supreme Court - entitling them to possession, enforceable by a Sheriff - you could be pinged for abandonment of your tenancy.

These faux 'notices' are nothing new, but the Tenants' Advice & Advocacy Services are currently observing a worrying increase in their use. If you find one in your mailbox, please give your local TAAS a call for a quick chat before deciding what to do. Don't be bluffed.

Our Principle Solicitor, Mr Grant Arbuthnot, has noted this increase with dismay. He has drafted, and asked us to make public, the following notice to mortgagees: