Buy to Let Mortgages Are Terms and Conditions Fair
I have been randomly picked to be on a customer survey panel for a leading buy to let mortgage lender. (This has nothing to do with my work as a consultant, I should add. I was just randomly picked because I have two mortgages with this lender.)
It means that every now and again I get a survey in my email inbox asking me a lot of questions about one thing or another to do with my buy to let mortgages with that lender.
What interested me about this month’s survey questionnaire was that it focussed very much on my knowledge of something called “Section 93 of the Laws of Property Act.”
All very odd and guaranteed to raise the suspicions of a consultant!
Now I have to admit that this particular consultant had to go away and look this Act up on google.
What the Act Says
And this is what this Section 93 of the Laws of Property Act says:
“(1) A mortgagor seeking to redeem any one mortgage is entitled to do so without paying any money due under any separate mortgage made by him, or by any person through whom he claims, solely on property other than that comprised in the mortgage which he seeks to redeem.
This subsection applies only if and as far as a contrary intention is not expressed in the mortgage deeds or one of them.
(2)This section does not apply where all the mortgages were made before the first day of January, eighteen hundred and eighty-two.
(3)Save as aforesaid, nothing in this Act, in reference to mortgages, affects any right of consolidation or renders inoperative a stipulation in relation to any mortgage made before or after the commencement of this Act reserving a right to consolidate.”
What It Means For You
Yes, it’s a bit dull isn’t it, but it has been written by a legal mind (which is why ordinary folk like you and I have to pay out money to other lawyers to re-translate it back into normal English).
What this seems to be about was what happens when a borrower wishes to pay off a chunk of his mortgage (where he has more than one mortgage with that lender.)
In this clause, the Act deals with whether a lender is allowed to apply the borrower’s repayment to a different mortgage of the lender’s choice – perhaps one where the loan to value, was too high for comfort, for example.
Well, what the Act seems to be saying is that, as long as the lender told the customer (in its original terms and conditions), that it could do this, then it can.
But one wonders, how deeply buried in a lenders’ terms and conditions would a clause like this have to be before it could be deemed to be in breach of the unfair terms in consumer contracts legislation.
This matters because in my work as a buy to let expert I am very aware of the Foxtons case where repeat letting fees were so hidden in the small print that the judge decided they were acting like “a trap” and were thus unfair. (We have commented a lot about the Foxtons case in our old blog as it rolled on over the years.)
Mortgage lenders may face a challenge over this kind of thing one day.
And readers of all this might like to ponder the recent actions of another building society who dug deep to find enough wriggle room in one of their clauses to move the goal posts.
The story about how they did it is covered in this piece from “The Telegraph”:
Internet and Mortgage Companies
Still, apart from all the legal aspects and niceties, it is nice to get emails from mortgage viagra with dapoxetine lenders.
It shows they care.
Other buy to let mortgage lenders who perhaps have not heard much about internet marketing (which as they are mainly banks, means most of them) may like to consider also contacting their customers by email every now and again to ask them for information or even to impart useful information that might assist them with being better landlords (and therefore less likely to become an arrears statistic on their loan book.)
This is, of course, an area we work on with mortgage companies.
MORE ABOUT LETTINGFOCUS AND WHAT WE DO
LettingFocus.com is the home of Landlord Information.
I’m David Lawrenson, a landlord and property investor myself for over 25 years and author of “Successful Property Letting” – the UK’s top selling commercially published property book for the last 3 years.
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