Breach the mortgage conditions?

[Ethanpeng 0]

I got letter from my mortgage provider saying the Council which I apply for license informed them that I apply for HMO and tell me I am breaching original conditions (buy to let)  please tell me how to do? 

 

[Grampa 0]

HMO properties need a specialised mortgage product and if you have a “normal” BTL mortgage it is unlikely to allow HMO’s. REad your mortgage conditions. You need to either change your mortgage to one that allows HMO’s or rent the property as a normal rental

[Ethanpeng 0]

Thank you. And the mortgage provider said that I will be in breach of mortgage conditions and may affect future landing decisions and amendments. Am I in big trouble now? I will lose my property? I am so worried. 

[Melboy 0]

Talk to your mortgage provider. I am sure they will arrange suitable mortgage finance to replace your existing mortgage. It is unlikely you will lose your property especially if it can be shown you are paying and keeping up with your existing monthly mortgage payments.

[Ethanpeng 0]

Thank you. I like your answer. As the HMO application is still in processing (consultant ion  period)  can I withdraw or cancel it? Because I don't intend to pay more interest. 

[Melboy 0]

1 hour ago, Ethanpeng said:

Thank you. I like your answer. As the HMO application is still in processing (consultant ion  period)  can I withdraw or cancel it? Because I don't intend to pay more interest. 

You could do that but it would mean you would not have an HMO mortgage. You will have to go back on your plan and take out a BTL mortgage. If you do not declare an HMO and your mortgage provider discovers you have not disclosed this then they will shut you down and the financial consequences to you will be severe.

When it comes to the rental business and indeed any business honestly is the best policy in everything.

[Ethanpeng 0]

 I agree with you. But I can let it to family only. Another thing does  buy to let mean I have to let it to a family?

[Richlist 0]

Many buy to let mortgages do not allow you to let the property to YOUR family members.

You can of course let to an unrelated family provided they meet the other criteria set by your lender.

Just read your terms and conditions for details.

[Carryon Regardless 0]

I would exepect the letter from the mortgage company to give a contact, number and possibly the person handling this.

Give them a call and discuss your options. Remaining as the original status of BTL and renting to 'a' family should mean there is no change. Withdraw the HMO application and I don't see why this doesn't just go away.

While discussing ask what their conditions would be should you make the change at some time. Don't forget that HMO is more complicated with the planning requirements and the management anyway.

[Ethanpeng 0]

Mine is small three bedroom ground floor flat. It is not my intention to do HMO business. But complying with the law seems put me into dilemma. Again BTL means I only can let to a family? Thanks a lot. 

[Carryon Regardless 0]

Is there a conflict with the council requiring that you gain HMO status because of the use of the whole building? That is, is it beyond your choice as to if this becomes HMO or not?

[Ethanpeng 0]

The two young couple has just moved in for a month what to do about that? (6 months contract) Do I need to give council a reason to cancel the application? Will they come to check the property? 

[Carryon Regardless 0]

I think you need to explain the status and use of the whole building before any one here can comprehensivley understand. HMO is intentionally beyong my area of knowledge anyway.

My thoughts to help others gain a better understanding.

How many tenanc'ies' are granted by you for your flat?

Is there a shared access route to all flats in the property, or do they have independant access?

Is it the local council that have caused you to seek HMO status?

How long have you owned the flat?

[Ethanpeng 0]

4 minutes ago, Carryon Regardless said:

Is there a conflict with the council requiring that you gain HMO status because of the use of the whole building? That is, is it beyond your choice as to if this becomes HMO or not?

My application falls into additional HMO category as there are more than 3 people and they are not family. 

[Ethanpeng 0]

2 minutes ago, Carryon Regardless said:

I think you need to explain the status and use of the whole building before any one here can comprehensivley understand. HMO is intentionally beyong my area of knowledge anyway.

My thoughts to help others gain a better understanding.

How many tenanc'ies' are granted by you for your flat?

Is there a shared access route to all flats in the property, or do they have independant access?

Is it the local council that have caused you to seek HMO status?

How long have you owned the flat?

The local council says max 4, as they share kitchen and toilet so I need additional license. 

[Carryon Regardless 0]

Like I said, beyond my area, but

It sounds like, from your economic responses, that you have 2 tenacies running for your 1 flat.

I wonder how house share situations are viewed. That is if you grant a tenancy to a person/s and allow them to sublet. Would this also be a HMO situation? That would mean a rearrangement of present situation, as I understand it.

[Ethanpeng 0]

I signed contract with two guys and later they bring their girlfriends in. Now I can tell the bank that I don't intend to do HMO and change the tenants. But how about the council. I can tell them to cancel the application.  But if they ask why? How to answer them. Will they come to check?

[Carryon Regardless 0]

As LL's we can't stop T's taking guests and realistically we can't prevent them sub letteing. We can only repossess when a tenancy is abused.

"The two young couple has just moved in for a month (6 months contract)" sounds like you granting a tenancy?

If not and the 2 guys have abused the 'written' agreement you have with them in that they are effectively sub letting then your serving a repossession notice ( a section 8 most likely) might satisy the council that you are addressing the situation??

In truth what you write above doesn't feel like the whole or accurate story. I suggest you seek more expert advice than I can give.

 

[Ethanpeng 0]

More or less I have told whole story. The two guys signed contract and then brought girlfriends here. I was told I need a license. So I applied. The council told my bank I applied for a HMO the bank told me I will be in breach of the mortgage conditions and will affect future lending decisions as my mortgage is BTL not HMO type. That is all story.