Tenants Whose Landlords Are In Mortgage Arrears

My Landlord has not been making mortgage repayments

In today’s economic climate, it can be a huge struggle to make sure you pay the bills at the end of the month. It can therefore be extremely stressful if you find that the landlord hasn’t actually been paying the mortgage and is in mortgage arrears.

Unfortunately this is becoming increasingly common, as buy-to-let property owners are among those struggling the most to keep up with their outgoings. The first thing you should do is speak with your letting agent to confirm that the property owner is in difficulty. This is having a profound knock-on effect on the huge numbers of tenants up and down the country, so it’s best to be as prepared as you can if you’re a tenant yourself. 

If you’re in the unfortunate position as a tenant whose landlord has got into this financial state, the sad reality is that the law offers you very little protection.


What happens

When a landlord goes into arrears with their mortgage lender, the lender is naturally entitled to begin the process of repossession, as is the case in a normal mortgage. Tenants do not actually have any right to be notified that the lender is intending to start this process, so the news can come as a nasty shock.

What the lender is obliged to do, is issue a ‘Notice to Occupier’, letting the tenant know that a repossession hearing has been scheduled, together with the details of this hearing. This must be sent to tenants at least 2 weeks before the hearing is due to take place.

Unfortunately for the tenants, they are not legally in a position to influence what happens at the repossession hearing, as the mortgage agreement has been made between the landlord and the lender. Sometimes however, tenants are admitted into the hearing, so that they can hear what happens, but they will typically have no input into it. What happens at the hearing will depend on the landlord and what the judge decides based on this.



If the property is indeed going to be repossessed, as dictated by the outcome of the hearing, typically the mortgage lender will appoint a receiver to whom you pay your rent.

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