My Landlord was Bankrupt when we signed tenancy Agreement

[hevak]

Hi,

 

I entered into a Private 2 year Tenancy agreement (with a 4 month break clause) 2 month ago. (I have paid 2 month in advance + 6 weeks deposit and the flat is partly furnished)

 

As Far as I was concerned, everything has been fine with the agreement and the tenancy so far.

 

I have found out in the last few days that my Landlord was in fact made Bankrupt a month before we signed our tenancy agreement. The reason why I found out was letters that were arriving at the flat, which made me investigate the landlord's status. I googled the Landlord's name and found the relevant public information about his bankruptcy.

 

What I know about Bankruptcy is limited to the fact that any transaction that the bankrupt person makes must go through the court appointed trustee.

 

I do not know if the landlord has communicated the letting of his flat to me to the trustee.

 

My wife is pregnant and I am sick with worry as to what the status of my tenancy agreement is.

 

can someone please advise as to if :

 

1- My Tenancy agreement is valid?

2- Do I have to inform the Trustee now that I am aware of this? If so, how do I found out who the receiver is?

3- Can the creditors of the landlord or the Trustee evict us? and if they do what happenes to my deposit?

4- I am due to pay next month's rent in a week's time. Should I cancel my standing order? If so who do I pay the rent to, in order not to be in breach of the agreement?

 

I am desperate for some advice please.

 

Thanks

Hevak

Edited December 17, 2009 by hevak
Missing "urgent" from the title

[danielr]

keep paying the rent.

 

even if the LL is bankrupt there is nothing to say that they've stopped paying any mortgage on that house, (they could own it outright even).

 

and if the house was to be sold, or repossessed from the landlord then you'd be sitting tenants.

 

if you don't pay your rent for two months then you could be evicted.

 

your deposit is yours, it should be in a TDS, and provided that you leave the house in an at least as good as you found it condition with all your rent paid up, the landlord shouldn't be able to make deductions from it.

[hevak]

Many thanks for your reply.

 

But I am not still clear as to what the role of the trustee is in this.

 

Do I need to inform the trustee?

is my tenancy agreement valid if the trustee is/was not aware of the tenancy?

 

I have spoken to a couple of lawyer friends who have given me conflicting advice so far, but they ado not specialize in this. so I am due to meet with a specialist lawyer after boxing day, but i am so anxious that I don't think I can last till then.

[bottomburp]

Is an estate /letting agent involved? If so they may be passing your rent to the OR. If you're paying rent directly to the Landlord then you need to get in touch with the OR to find out the position.

 

TO find out who the OR is - go to The London Gazette London Gazette Home Page and type in your landlord's name. The details of his bankruptcy should come up together with the details of the Official Receiver appointed (there are also Edinburgh and Belfast editions of the Gazette).

 

If the bankrupt hasn't declared this property to the OR then he will be in trouble if it belongs to him - but it is possible that the bankrupt's spouse / partner owns the property in which case it's nothing to do with the OR.

 

If I were you I'd get in touch with the OR immediately and make sure that the OR is aware that you are renting the property and make sure that you are paying the rent to the correct person.

 

You should also check that your deposit has been lodged with a Tenany Deposit Scheme, you should have received notification from your landlord that this has been done, who with and a reference number. With that information you can check that your deposit is secure.

 

Keep us in the picture and let us know if you need any more help. bb

[danielr]

the trustee should really already be aware that there are tenants in the property, but it won't hurt to make sure that they know for sure.

 

DWF LLP | Media Center | Trustees and Tenancies

 

that link gives an idea of what trustees do.

 

the trustee, in a manner of speaking is the caretaker of the estate, and they will deal with disposing the landlords assets,

the receiver is owed money, and they aren't likely to take a house instead of money, so the trustee deals wit selling the house with the money from the sale going to pay the debts of the bankrupt landlord.

 

 

I think that your tenancy is pretty safe... and here's why...

 

you have an assured tenancy agreement?

 

your landlord (if they want you to move) would need to give you 2 months notice.

 

you entered into a 2 year tenancy (with a four month break clause) 2 months ago.

 

so assuming that you make it to the end of this month and start your third rental month the landlord isn't going to be able to ask you to leave after four months (as they couldn't give you enough notice). and you're not going to break the tenancy before then either, so you should be good for the next year and ten months.

(assuming nothing bad happens with the rent!)

 

 

that all seems a bit good to be true. so if I'm wrong, someone please say!

[bottomburp]

danielr - I think it's highly unlikely that a Trustee in Bankruptcy (TiB) will have been appointed so soon into the bankruptcy. But even if a TiB has been appointed the first port of call is the Official Receiver as they will know who the TiB is.

 

It is possible that the tenancy is safe but it may not be. For example if:-

 

* the property is mortgaged but the mortgage isn't being paid

 

* the mortgage doesn't permit sub-letting

 

and those are just two reasons why it may not be safe (but that immediately spring to mind).

 

If the bankrupt did anything shortly before the bankruptcy - transfer of property, sale of assets for a low price etc - it can be voided and that is why it would be helpful if the OP could answer the questions raised in my earlier post. If we don't know a bit more about this we're unlikely to be able to give good advice.

[hevak]

Bottomburp & Danielr, thank you both for your help.

 

I am finding things out and Just to clarify this is the information that I have been able to find:

 

I found the flat through a friend who lives in the same block and did not go through an estate agents.

 

The LL was already bankrupt when we signed the tenancy agreement, although I was not aware of it.

 

The Land registry Title deed (of the property I am renting) has the bankruptcy registered. so the Official Receiver must be aware of LL owning the property (right?). I don't know if the LL has informed the OR of the tenancy. what are the implications if he has not informed the OR?

 

There is a mortgage charge registered in the title, but it is not the mortgage company that bankrupted the LL. I am not aware if the LL has informed the mortage company of letting the flat to me or if the mortgage does not permit the Landlord to let the flat at all.

 

There is also 2 further "beneficial interests" registered in the title. Both the interests were registered through high court orders.

 

One of "beneficial interests" is in the name of an individual whom I think is connected to the LL (spouse or family). This was registered 6 month prior to the bankruptcy.

 

the other "beneficial interests" is in the name of well known loan comapny (I think these guys bankrupted the LL). This was registered 5 month prior to the bankruptcy.

 

The information in the London Gazette is minimal and is the same as what I found in the "Individual Insolvency Register". It mentions the "Insolvency Service" Office that deals with the LL's bankruptcy case. I guess this the office that I need to contact?

 

The LL's bank account that I have sent mony to is Natwest but sort code is in Jersey.

 

I have been chasing the LL regarding the deposit & Tenany Deposit Scheme for a good month and the LL assured me that he hasn't got round to doing it due to his travels and that I will receive the certificate no later than the 2nd week of Jan.

 

I will contact the OR, but I just wanted to know all the rights and wrongs of it before I do. As I said before my wife is pregnant and it isn't a straight forward pregnancy, so don't want to initiate something that will lead to us leaving the flat sooner rather than later, but also want to make sure that I am on the right side of the law.

 

Hope I have given enough info for more advice.

 

Thanks again

Hevak

Edited December 17, 2009 by hevak

[bottomburp]

Here is a print out from the government's page on TDS Tenancy Deposit : Directgov

How does it work?

 

Start of a new tenancy

At the beginning of a new tenancy agreement, pay your deposit to your landlord or agent as usual.

Within 14 days

Within 14 days, the landlord or agent is required to give you details about how your deposit is protected including:

• the contact details of the tenancy deposit scheme
  
• the contact details of the landlord or agent
  
• how to apply for the release of the deposit
  
• information explaining the purpose of the deposit
  
• what to do if there is a dispute about the deposit
  

If you don’t get this information, ask your landlord or agent the simple question – ‘how is my deposit protected?’

You have a responsibility to return the property in the same condition that it was let to you, allowing for fair wear and tear.

• More information on the type of schemes available
  

What if your landlord isn’t protecting your deposit?

 

You can apply to your local county court. The court can order the landlord or agent to either repay the deposit to you or protect it in a scheme. If your landlord or agent has not protected your deposit, they will be ordered to repay three times the amount of the deposit to you.

• More on resolving disputes
  

Moving Out

 

At the end of the tenancy, check whether you are leaving the property and its contents in the condition in which it was let to you - allowing for fair wear and tear- and check that you have paid your rent and any other expenses. Then agree with your landlord or agent how much of the deposit should be returned to you.

Within 10 days – you should have received the agreed amount of the deposit.

Your LL is in breach of the TDS because he has not given you the required information within 14 days.

 

Here is a further estract from the site

Tenants: Tenancy deposit scheme : Directgov - Tenancy Deposit

What if your landlord isn’t protecting your deposit?

 

You can apply to your local county court. The court can order the landlord or agent to either repay the deposit to you or protect it in a scheme. If your landlord or agent has not protected your deposit, they will be ordered to repay three times the amount of the deposit to you.

My advice in my earlier posts remains. Get in touch with the OR.

[Aequitas]

First, any disposition of property made by a bankrupt after the bankruptcy order is void. Secondly, the property of a bankrupt vests in the trustee in bankruptcy on his appointment. No doubt there are exceptions, but on the face of it it would appear that the purported grant of a tenancy was of no effect. The fact that you are required to pay the rent into a CI bank account has to raise an eyebrow. Now that you know the landlord is bankrupt I think it would be unwise to pay any further rent into that account. As has been suggested, the best thing you can do is to inform the trustee in bankruptcy without further delay, although since you are seeing a solicitor after Christmas you may as well wait for his advice.

 

Whether you have a tenancy or not and if you do what its status is, remember that no one can get you out of the property without a court order. There is therefore no need for immediate panic.