When you think of ways Problem Tenants could cause your clients financial difficulty you'd usually think of things like them damaging the property, inviting criminal elements in to the home or simply not paying rent. But there are other, more damaging things, that an unscrupulous tenant can do.
One of these things is to apply for a loan or mortgage secured on the property. This can be especially damaging, as there's a chance that your client could end up losing an awful lot of money if the lender issues legal proceedings for repossession.
So how could this happen? After all the tenant doesn't own the house, your client does. But if that tenant has utility bills or documents showing that they live at the property, they can apply for a new mortgage or loan secured on the property. This will be registered with the Land Registry in due course, which will generate an alert about the fraudulent loan.
That should be it right? Your client receives the alert and stops the unscrupulous tenant from taking out the loan. But this will only work if the contact address that the Land Registry hold for your client isn't the property address. Because otherwise the tenant will be the one who receives the alert and your client will be none the wiser!
Here are four things your clients can do to make taking a fraudulent loan out on their property much more difficult, if not outright impossible:
- Make a list of every property they own
- Check each of those properties with the Land Registry to ensure that they have the right contact details (their home or business address and the right email address)
- Arrange for property alerts to be sent if somebody tries to change the register of any of the properties
- Make sure that any time they buy a new property they repeat this process, and never let a property without the correct alerts set up on it
If you are a landlord you can click here to get started with your property alerts, and don't put this one off as it could come back to bite you in future! If you have landlord clients feel free to share this blog with them, as it could be a real life-saver.
ARAG provides access to a legal advice line that can support your clients through an issue such as this, and a wealth of templates and pre-written letters to be used by landlords in disputes with tenants and other bodies. All this on top of the insurance that pays legal costs for landlords to recover vacant possession (subject to the correct legal notice being issued) , to pursue rent arrears and compensation for property damage and to defend criminal prosecutions that arise from renting out property. Indemnity for rent arrears can also be arranged.