Tenants at risk as Landlords are repossessed
Questions have been asked in the House of Commons regarding tenants who have been paying their rent and fulfilling all their other obligations but who nonetheless find they are at risk of losing their home. What protection do they have?
We sympathise with tenants who find themselves in this position. So, what can lenders with the charge on the property do in cases where the tenant is paying their rent, but the landlord is not using this money to meet their mortgage commitments?
It seems it all depends upon what type of mortgage the landord has and the protection for tenants falls into two distinct groups, and are affected in quite different ways.
The first are those whose landlord has a buy-to-let mortgage, and these tenants are generally in a much stronger position.
The second group comprises those whose landlord has a residential mortgage. A borrower with this type of loan should seek the permission of the lender before renting out the property. Where the lender agrees, it will be bound by the tenancy agreement. That provides protection for the tenant, should the mortgage lender need to take possession of the property or appoint a receiver because the borrower stops paying the mortgage.
In some cases, however, a borrower with a residential mortgage decides to rent out the property without telling the mortgage lender, in contravention of the mortgage agreement and perhaps even fraudulently. These tenants have been disadvantaged and their tenancies put at risk through no fault of their own.
Likewise the mortgage lender. It is quite likely that neither the lender nor the tenant will even be aware of each other’s interest in the property. Both have been put in a difficult position because of the irresponsible behaviour of the borrower.
But while mortgage lenders may sympathise with tenants in this position, it is important to understand that their legal responsibility – reinforced by regulatory requirements – is to the
landlord, and not to the tenant.
The lender has an obligation to minimise arrears and get the best price possible for the property. This is likely to lead the lender to seek possession of the property quickly. In this situation, the tenant has few rights.
So how common is this problem? Recent television coverage of the issue reported it against the backdrop of 75,000 mortgage possessions this year.
The reality is, however, that only a much smaller proportion of total possessions – perhaps 4,000 this year, or around 5% of the total, according to the Department for Communities and Local Government (DCLG) – will involve residential mortgages where the lender discovers the property is occupied by tenants.
Buy-to-let mortgages
If tenants are renting from a borrower with a buy-to-let mortgage, they are in a better position. Here, the tenancy is normally binding on the lender if it needs to take enforcement action against the borrower/landlord. The tenant will have the statutory right to notice under their assured shorthold tenancy.
Instead of seeking possession, the lender may choose to appoint a receiver, who will, as far as the tenant is concerned fulfill the role of the landlord, maintaining the property and collecting the rent.
Under an assured shorthold tenancy, a tenant is entitled to the remainder of their contractual period – which is typically six months but can be longer – as notice and to a minimum of two months at the end of that period. In practice, a lender or receiver will often allow the tenant to remain beyond the notice period until rent arrears are paid off or the tenant chooses to leave.
Sometimes, a property may be sold with a sitting tenant. This is rare, however, because the lender has a responsibility to the borrower to obtain the best price for the property, which usually implies sale with vacant possession.
New Advice agency campaignA number of organisations, including Crisis, Citizens Advice, Shelter and the Chartered Institute of Housing have launched a campaign to help tenants when the mortgage lender takes enforcement action. The campaign calls for courts to be able to delay possession to allow tenants to find an alternative home.
But if there is a residential mortgage on the property, giving the tenant more time to find a new home could put the lender in conflict with the borrower, particularly if it means mortgage arrears build up and the property is eventually sold for less than would have been the case if it was marketed straight away. If the landlord had had adequate
mortgage protection insurance for commercial premises the situation would not have arisen in the first place
The campaign also calls for notices to occupiers to be made more obvious and perhaps to carry a risk warning.
Landlords Insurance is available to compare online.
Labels: credit crunch, housing market, insurance news, landlord insurance, mortgage, mortgage protection insurance
RBS to shed 4,500 jobs over next two years
RBS has begun consulting Unite and other employee representatives about a business plan for its back office operations that will regrettably involve job losses, 4,500 of which being UK based.
The plan could affect up to 9,000 Group Manufacturing roles globally, including 4,500 in the UK, over the next two years.
However, the actual number of jobs lost is expected to be significantly lower than this.
A redeployment programme has already identified 650 new job opportunities in the UK and the impact will also be reduced through natural turnover and less use of agency staff.
RBS will make voluntary redundancy arrangements available which may suit some of the staff affected by this announcement. RBS agrees with Unite that compulsory redundancies should be a last resort.
The business plan, which involves a number of other cost-saving initiatives including moving to a common technology platform, will help RBS achieve its target of reducing annual costs by £2.5bn within the next three years.
It is not yet known what impact will be felt by the Insurance group which is responsible for bramds such as Churchill and Green Flag to name but a few.
Income Protection InsuranceLabels: credit crunch, income protection
Google Arrested - We Hope It Had Valid Car Insurance!
Google Visual Information is Arresting!
Insurance Companies must be rubbing their hands in glee at the introduction of
Google Maps Streetview. The 360 degree high definition view of your house from outside the front door, is a valuable tool for both loss adjusters and claims assessors for virtually every type of insurance cover.
Combine it with the already impressive aerial views from Google Earth and Insurance Companies can add very valuable visual attributes to their already impressive Geographic Information Systems (GIS).
Claims assesors can for example look at the state of the roof of a building before heavy storm damage and in
car insurance, there is no more drawing of maps to describe the scene of an accident when making a claim, or playing with toy cars in front of the District Judge to explain the accident if the case goes to court - simply all sit around Google Streetview and pinpoint the testimony.
So while on the subject of Google Streetview, have any of you seen the cars going around the country? If you have, it is highly likely that that moment has been captured for posterity and your image is now truly global!
Look what one guy witnessed in Northern England -
Google Arrested!Chris Whiteoak was walking down the road in Bradford when he noticed Google car being pulled over by the police … here’s the story, in Chris’ own words:
"I’m from Bradford, United Kingdom. I was just going on my lunch break at work today and i noticed a black car that had stopped at a red light. It had a "google" sticker on the side, and a large camera "thing" on the top. I decided to pull out my camera phone to take a pic, but just as i did a police car pulled up right behind it and put on it’s lights and officer inside was motioning the car to pull over.
I then realised why, as the car was in the lane to go straight ahead, which was marked "bus / bicycle / taxi only", before i could take another pic, the google car sped off, went nearly the whole way round the block in busy Bradford city centre (the police still following now with lights and siren on!), before eventually pulling into a car park… which just happened to be the car park to the old police station!!!
When i eventually caught up i did manage to get a picture of the police car and the Google car pulled over in the car park, after which the officer got out of the car and started asking me not to take pictures! lol
Also, I’m hoping when they put the street level view for Bradford on google maps, am hoping there will be a cheeky pic of me taking a pic of the google car, which i can then upload to google earth my pic of the google car taking a pic of me (if that makes sense?!? lol) :-D "
And now, the those arresting photos:
Well guess what Chris? - Bradford has just come on line at Google Streetview UK and Yes, you are on it!
Let us know
if there’s a picture of you on Google Streetview and thanks Chris!
Labels: claims, Google, Insurance companies, loss adjusters
12 Car Insurance Money Saving Tips For Much Cheaper Premiums
12 Car Insurance Money Saving Tips For Much Cheaper Quotes and Premiums
By resident expert
Dave HealeyIt can be quite a daunting experience trying to purchase car insurance, and with the myriad of products and sales channels available today, it is often difficult to know where to start the process. It can be even more complicated when you start to look to reduce your premiums without sacrificing either your levels of cover or increasing your risk.
As most motor insurance is basically rated by your birth date and age, and your postcode or zip code, short of moving property or growing older, it often appears that reducing your vehicle insurance premiums is an impossible task.
This is not necessarily so! Whichever method or distribution outlet you use to purchase car insurance, if you consider these twelve money saving tips, implementation of any one will virtually guarantee a reduction to your premiums at both onset of a policy or at renewal. By simply making changes to any one of these premium rating factors that go to make up the quotes you are given, will result in an alternative quote which should be to your favour.
The money saving tips explained
Before we start remember - Don't automatically renew your policy with the same company. It is virtually guaranteed that you could get like for like cover cheaper with another insurance company if you shop around and compare covers and prices from different providers.
1. Investigate on the Internet - Visit different suppliers
If you were getting paid at least £150 or $200 for two hours work, you should be pleased. That is the minimum you should look to save on your annual premiums by spending a couple of hours shopping around for quotes on the Internet.
Visit a car insurance supermarket comparison site. If the premiums are too expensive but you like the cover offered by a particular insurance company then, visit the supplier direct and cut out the expense of the middleman.
The large motor insurance comparison sites you see advertised all the time on television will send you off to the suppliers site themselves to complete 'the deal', so its best to close down the application, clear the cookies from your browsers memory to ensure that you are not charged their commission inclusive rates, and visit the insurance company direct.
Additionally you should visit a specialist auto insurance scheme provider. These were once only available on the High Street but are now springing up everywhere online. No matter what your particular individual needs, be it lady driver cover or perhaps classic car cover, specialist car insurance providers by their very nature usually offer cheaper quotes as they benefit from the economies of scale allowed by group buying of cover.
2. Do your research
Who is offering deals on television at the moment? Everybody who seeks motor insurance is an individual with a different car and individual cover needs dependant upon their circumstances. Write down what you think your exact cover needs are and think about where you might find providers for your individual needs. For example, if are you a senior citizen, you should search on the Internet for specialist car insurance schemes for over fifties.
3. Go for a no frills policy
If you are not worried about quality of cover and only require basic road risks, go for one of the many policies now being offered by insurance supermarkets as 'value car insurance'. These policies usually only offer the very basics of cover required under the Road Traffic Act, however may be very suitable for low mileage, cheap cars and younger drivers.
4. Only get cover for what you need
Why pay for car breakdown insurance or other sometimes hidden extras such as the cost of including a replacement vehicle should you have an accident, when you already have AA breakdown cover and another car sitting on the driveway at home that you could use. Check your existing policy cover details carefully and exclude all unnecessary or duplicate covers.
5. Take on the risk yourself
With Car Insurance you have two basic options for taking more of the risk on yourself. These being, one by choosing how much cover you require in the first place, that is, either comprehensive or third party, perhaps with the fire and theft options included. Secondly you are given the option on most systems to choose how much of the cost of damages of an accident you are prepared to take on board yourself, before you call on the insurance company to make a claim. This is known as the voluntary excess and is the amount that will always be deducted first from any amount you claim. If the cost of repairs of an accident are not much more than the voluntary excess amount you have chosen then it would be prudent to pay for the repair costs yourself, rather than lose your no claims bonus.
6. Reduce the cars risk with improved car and location security
If you park your car off road or garage it at night you will receive further discounts. If you own a classic car which does not have them fitted as standard, fitting security devices, for example car alarms, immobilizers and GPS trackers to your car will substantially reduce your premium
7. Improve your driving or change your lifestyle
If you need to make a claim because of the way you drive, or if you have more than one SP30 for speeding, your premiums are going to be heavily loaded at renewal. You can reduce your insurance costs therefore by improving the way you use your car or changing your lifestyle.
8. Cut down on your Car's Usage
By thinking about how you use your car and reducing unnecessary journeys you will be cutting down on your cars usage and by implication the risk you present to an underwriter. Check how many miles you run up each year and make sure that this is what you are paying for! Do not make a false mileage declaration in an attempt to save money because in the event of a claim, your mileage and MOT if applicable will be noted by a claims assessor. If there is significant difference between the declared mileage and the actual amount you have driven, you risk having the claim refused or seriously reduced in value.
9. Pay the full premium amount upfront
Most UK insurance companies charge additional costs for handling monthly direct debit payments. There is often a five to ten percent effective discount if you pay immediately online or over the phone by debit card.
10. Investigate
Specialist Car Insurance SchemesInvestigate insurance specialists that target specific groups of people of car type, for example performance motor insurance or cover for young drivers. These schemes offer with unique policy options and cover modified for the particular specialist driver group. They are often far cheaper than standardised covers offered by comparison sites as they have group bulk buying economies of scale regarding underwriting and claims and a known risk pool of similar types of people and car.
11. Join a Car club
Many car owners clubs and specialist marques clubs have special affinity group rates for specialist car insurance schemes. The cost of getting membership of these clubs can often be less than the five to ten percent savings you can make on your premiums by joining such a scheme.
12. Take an Advanced Driving Course
You can save a further large percentage with most online insurance companies if you have taken an advanced driving skills course or ADC. The courses are run nationally and the cost of the course is outweighed by the annual savings you will make on your insurance premiums. The savings are greater for young drivers and this is one of the few positive actions that a young driver can make to reduce his or her annual vehicle insurance costs.
And Finally - Haggle!
And here's an extra tip which we often find works when all else fails. Complete a quote on the Internet for the policy you desire with the company you like. Do not complete the quote beyond the screen where the premium prices are displayed, merely save the quote reference number. Quotes are usually legally binding for thirty days.
Leave it a while then pick up the phone and call the insurance company. Tell them that you've had problems completing the quote online. They will ask you the quote reference number and then have all you details in front of them. When they tell you the quote amount (which you should know already), tell them that you've got a quote that is, say a hundred cheaper at so and so company, and ask if that's the best they can do. Just by haggling you will be surprised just how much you could save on your car insurance costs!
Dave Healey is a
specialist car insurance expert whose field of expertise extends from underwriting
Classic Car Insurance polices at Lloyds , to designing car insurance supermarkets online.
Article SourceLabels: cheap car insurance
