HOME TRUTHS
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I am interested in renting my house but I don't know whether I should do it as an assured or shorthold tenancy agreement. What are they and how do they differ?
Natasha Lucas
Whitby
These are the most common forms of arrangements for letting of property. An assured or shorthold tenancy is the usual form if:
l You are private landlord and your tenant is a private tenant.
l The tenancy began on or after 15 January 1989.
l The house or flat is let as separate accommodation and is the tenant's main home.
Shorthold tenancies allow landlords to let property for a short period, normally six months. Assured and shorthold tenancies allow landlords to charge a full market rent.
The Housing Act 1996 introduced new legislation regarding tenancy agreements. All new agreements will automatically be shorthold tenancies unless the landlord gives written notice to the contrary. You will have the right of possession if the tenant owes more than two months' rent and it will be easier to evict the tenants if they cause a nuisance to others.
With a shorthold tenancy you can regain possession of your property after six months provided you give two months' notice to the tenant. With an assured tenancy you do not have an automatic right to the property. The tenant has the right to remain unless you can prove to the court that you have grounds for possession.
Therefore, if you want to gain possession in the future, you should consider a shorthold tenancy agreement. Some landlords have meant to grant a standard assured shorthold tenancy, but because of their lack of technical knowledge have accidentally given the tenant the right to remain in the property for life.
HELP WITH NEGATIVE EQUITY
I am in a negative equity situation and I may need to move in the next few months. Even with prices rising at the moment, I do not envisage my property gaining enough in value to cover my mortgage. How do lenders view negative equity and what can they do to help?
John Lucas
Norwich
Many lenders now seek to pursue a positive approach towards mortgage customers who find themselves in a negative equity situation when they wish to move home. Most will allow customers to transfer up to pounds 25,000 of their negative equity into a new home, borrowing up to 125 per cent of the new property's purchase price. Contact your lender as soon as possible to discuss the best way forward.
CAN I GET A MORTGAGE?
My business has collapsed and I have been made bankrupt as a result. Is there any way I can still obtain a mortgage?
Susan Mackenzie
Liverpool
This is unlikely because you have no power to enter into a mortgage agreement or borrow money. If a trustee in bankruptcy has been appointed they may grant a mortgage to raise funds to settle some of your debts. Your prospective lender's solicitor will carry out a bankruptcy search prior to completion of the advance.
Mortgage lenders will consider applications from customers who have been declared bankrupt if they have established new employment and an income track record usually over two years. Your lender will need to know the circumstances behind the bankruptcy and the bankruptcy order must have been discharged by the courts 12 months prior to application.
George Wise is managing director of NatWest UK Mortgage Services.
Send your queries on practical property issues to: Home Truths, Travel & Money, Independent on Sunday, 1 Canada Square, Canary Wharf, London E14 5DL. Fax: 0171-293 2043; e-mail: sundayproperty@independent.co.uk
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