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If your personal circumstances have changed and you've decided to rent out your home then it's essential that you obtain consent to let from certain organisations and individuals.
Who do you need to get permission from?
- Your mortgage provider.
- Your Landlord Insurance company.
- Your head lessee of freehold (if you have a leasehold premise).
- Your co-owner, if any.
Mortgage provider
Most mortgage providers request notification of any intention to let a property.
Q. What happens if I don't tell my mortgage provider that I intend to let my home?
A. If you don't tell your mortgage provider, you'll probably be in breach of the terms of your mortgage agreement. Theoretically, if the mortgage provider then discovered that you were renting out your home they could refuse to let the property and request that you pay their money back. You would then need to find another mortgage provider and take out a buy-to-let mortgage.
Q. What will happen once I tell the mortgage provider of my intention to let?
A. Mortgage providers may give you permission to let. Depending on the provider, you may be charged an administration fee. The mortgage interest rate will either remain at the same level or be increased. Mortgage companies often require the tenancy to be formalised by an assured shorthold tenancy agreement (typically lasting six months) setting out the terms of agreement between landlord and tenant.
Q. How do I know whether consent has been given?
A. Ask the mortgage provider to confirm their consent in writing.
Insurance company
Q. What will happen if I don't tell my insurance company of my intention to let?
A. Failure to inform your insurance company of your intention to let could invalidate your insurance or leave you under-insured. This means that you could be personally liable for any claim made against you.
Q. What will happen once I've informed my insurance company of this change to my residential property?
A. As a landlord you will be required to take out appropriate Landlord Insurance cover.
Head lessee of freehold
Q. What happens if I don't tell the head lessee that I'm going to rent out the property?
A. Failure to inform the head lessee of the freehold property that you will be renting out the property could mean that you are in breach of the leasehold agreement. Consequently, the head lessee may take legal action against you.
Q. How do I know of the head lessee has consented?
A. Request consent to be confirmed in writing.
Co-owner
Q. What happens if I don't tell my co-owner of my proposal to let our home?
A. Failure to inform your co-owner of your intention to let could result in legal action being taken by them against you. Be sure to obtain their consent in writing.
Ensuring that you have obtained the necessary consents to let prior to renting out your property should give you peace of mind. This should enable you to start reaping the financial rewards of your property investment safe in the knowledge that you have complied with your financial, legal and insurance obligations with regard to consent to let.
Related articles:
Attracting and keeping tenants
Legal tips for landlords
Dealing with problem tenants
General landlord information (DIY, Inventories and more..)
Energy-saving tips for landlords and tenants
Financial tips for landlords
Buying a buy-to-let property (auctions, location etc)
Insurance for landlords
Using letting agents
Mortgage information for landlords
The information contained within this article is for general information purposes only, it does not constitute advice. Direct Line for Business endeavours to keep the information up to date and correct but does not make any representation or warranties of any kind about its completeness, accuracy, reliability or suitability. Any reliance you place on the information is strictly at your own risk. Direct Line for Business will not be liable for any direct or indirect loss or damage arising out of or in connection with the use of this information.
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