Landlord's apartment in Receivership

Barti

Just got back to my apartment I'm sharing with a couple friends and got a letter in the post from Cabot Financial saying that the apartment has been taken into Receivership and that they are handling the debt collection on behalf of the bank. Obviously I was confused as we have paid all our rent on time and the landlord never mentioned any difficulties with the mortgage on the apartment.

I have attached a copy of the letter we received, minus the identifiable info, if anyone would be more knowledgeable in the matter? I only ask now because I rang the landlord and they said "Don't mind it, it's nothing. Send the letter on to me and don't mind it."

(Link in case the attachment doesn't work http://i.imgur.com/huzEk3J.jpg )

The_Morrigan

Ring the company that sent you the letter and ask them what is going on?

Bepolite

You've nothing to worry about apart from finding a new place to rent in the medium term. The receiver will be taking over the rental and may eventually want you out to sell the property.

You may end up with a dispute between the Landlord and the receiver as to who you're to pay the money too. In that situation I'd keep the money aside and tell them to resolve it between them. It's the receiver that is most likely due the rent but it may placate the Landlord that you're not paying it across to them. You may or may not end up in a situation where the Landlord starts to put pressure on to you in that case call the guards.

All in all nothing major to worry about if the Landlord behaves like a businessman.

Nino Brown

How do you verify something like this? How do you you know it's not a scam? Sure, you could call the number on the letter, but that could be anyone.

The_Morrigan

Nino Brown wrote: »

How do you verify something like this? How do you you know it's not a scam? Sure, you could call the number on the letter, but that could be anyone.

Common sense and rationale thinking.
You can't go around thinking everything is a scam, you have to take some initiative and investigate these things yourself, especially if your hard earned cash is being tied up in the middle of a dispute between your landlord and the lender/receiver.

• Read all the information they have provided;
• Draft up a list of questions and contact the two companies mentioned to ensure they both know who you are and how best to contact you (registered post/email/phone);
• Always best to ring their main reception number (which you can find on google) rather than a direct line and ask for any of the contacts mentioned in the letter - the receptionist will know immediately if they are a current member of staff or not.
• A quick search on the CRO website shows that both companies are registered in Ireland so they are legitimate companies (and quite established as they were registered in the 80's)

gaius c

Cabot are real but it's curious that there's a PO box address on the letter while their own website has a proper address with no mention whatsoever of the PO box address.

Any way to track down the PO box and see who really owns it?

If it is a scammer, I'm impressed to see them staying current like this and they are bound to fool some people.

Edit: right now though I'm more inclined to trust Nigerian scammers than our strategic defaulting landlord class.

Nino Brown

The_Morrigan wrote: »

Common sense and rationale thinking.
You can't go around thinking everything is a scam,

True but when you get a letter out of the blue saying you now need to transfer your rent into a new bank account, it would be foolish not to seriously question it.

The phone number on the letter doesn't match the number on the site, also the letter address is a PO box, the address in the site is the actual business address.

It probably is above board, but I wouldn't be doing anything until you are 100% sure, except maybe cancelling the current standing order to your landlord

The_Morrigan

This is why I said always ring the reception desk and ask to speak to the contact mentioned in the letter to see what's going on.

I know there are chancers out there, but you can't just ignore it either.

Edit:
On looking at the letter again - two things stand out.
The phone number could be a direct line, the number on their website looks like the main reception number - the first 3 digits are the same in both numbers.
They mention that the new details for payment of the rent will be given by another company, it's not coming from Cabot who sent the letter.

Nino Brown

The_Morrigan wrote: »

This is why I said always ring the reception desk and ask to speak to the contact mentioned in the letter to see what's going on.

I know there are chancers out there, but you can't just ignore it either.

Edit:
On looking at the letter again - two things stand out.
The phone number could be a direct line, the number on their website looks like the main reception number - the first 3 digits are the same in both numbers.
They mention that the new details for payment of the rent will be given by another company, it's not coming from Cabot who sent the letter.

Again, it probably is legit, but the fact that it looks legit doesn't mean much, the whole point of a scam is to make it look legit.
But you're right, a call to Cabot, tell them the reference number, they'll be able to tell you the address, that should confirm the letter is legit.

However do they have legal rights to demand payment of rent from you? Are tenants supposed to know legality of this stuff? What if the landlord still demands payment? The whole thing is a lot to land on somebody, surely there's a better way of doing it. At least send somebody out.

The_Morrigan

Nino Brown wrote: »

Again, it probably is legit, but the fact that it looks legit doesn't mean much, the whole point of a scam is to make it look legit.
But you're right, a call to Cabot, tell them the reference number, they'll be able to tell you the address, that should confirm the letter is legit.

However do they have legal rights to demand payment of rent from you? Are tenants supposed to know legality of this stuff? What if the landlord still demands payment? The whole thing is a lot to land on somebody, surely there's a better way of doing it. At least send somebody out.

Cabot provided this document, which the tenant(s) should read. http://www.ibf.ie/gns/publications/formsguides/Tenant_guide.aspx

This is their chance to ask all the questions of Cabot & Wyse, so best to sit down and draft up a list of questions from the basic 'how do I pay my rent?' to 'the landlord is threatening me - what do I do?'

I've found over the years that some tenants don't know the basic principles of the usual run of the mill tenancies (and some landlords), so being pointed in the direction of the best practices, faq and legislation is all that the receiver can do. It is the same way here on boards we direct posters to the PRTB, Threshold and the RTA legislation.

_Kaiser_

Personally I'd take the landlord's advice and send it on to them to deal with. The issue is between the landlord and his bank/this agency - nothing to do with the OP.

I wouldn't be just paying rent to someone else based on a letter like that.

Robert McGrath

Ask for:

1. Deed of appointment as receiver, and
2. Copy of mortgage deed showing power of bank to appoint a receiver OR court order appointing the receiver

These are reasonable requests before you start to transfer rent to the receiver

Bepolite

Kaiser2000 wrote: »

Personally I'd take the landlord's advice and send it on to them to deal with. The issue is between the landlord and his bank/this agency - nothing to do with the OP.

I wouldn't be just paying rent to someone else based on a letter like that.

If you pay the previous Landlord once a receiver has been appointed you could be out the money. It's like sending money to a company that has gone bust.

DO NOT send the landlord any more money. If in doubt keep the rent aside, ideally, in a separate bank account until you know what's going on.

The_Morrigan

Robert McGrath wrote: »

Ask for:

1. Deed of appointment as receiver, and
2. Copy of mortgage deed showing power of bank to appoint a receiver OR court order appointing the receiver

These are reasonable requests before you start to transfer rent to the receiver

The mortgage deed is not a public document, it can't be provided to third parties.

Nino Brown

This whole thing could get messy, if it was me I'd just bail. You're lease contract was with the landlord presumably, so I don't see how the receiver could enforce it but I could be wrong.
Also, what happens to your deposit now? I'd be asking the landlord for that ASAP

L1011

Kaiser2000 wrote: »

Personally I'd take the landlord's advice and send it on to them to deal with. The issue is between the landlord and his bank/this agency - nothing to do with the OP.

I wouldn't be just paying rent to someone else based on a letter like that.

This will lead to problems if its all legit and they continue paying rent to the landlord, who obviously will have it in their interests to ask for it.

Superdedupity

The only thing I'd want to know about is my deposit. It's the thing that always causes the problems in receiver appointed lettings.

Ultimately it doesn't matter to you who gets the rent, as long as they are entitled to receive it, and you have your place to live. The deposit (and its return) is what will cause hassle; it's not the receivers problem to give it to you, it's the landlords:)

manonboard

I would contact the company and confirm everything about it.

I'd then ask for the deed of appointment i think it's called.

Upon confirming all this, I would ask how is the deposit being handled.

If there is any malarkey that looks like they are claiming they don't have it and won't return it then I'd withhold the same value from the rent until either the landlord or the receiver turns it over or confirms they still have it in writing.

Just be sure to make sure you don't lose out on your deposit because your stuck in the middle of two people who want the rent/legal cat fighting.
If the receiver wants your rent under the lease you currently have, then they can have it only if they also assume the responsibilities of the lease (fixing stuff/deposit).

I'd be careful about turning more money over to the landlord. If he is going into receivership with the place, it's likely he is cash short and not in a great position to return deposits etc.

Nino Brown

Superdedupity wrote: »

The only thing I'd want to know about is my deposit. It's the thing that always causes the problems in receiver appointed lettings.

Ultimately it doesn't matter to you who gets the rent, as long as they are entitled to receive it, and you have your place to live. The deposit (and its return) is what will cause hassle; it's not the receivers problem to give it to you, it's the landlords:)

Exactly, my thinking would be to be skip a months rent payment, take that as your deposit and be on your way. But that advice is probably against the rules so definitely don't do that.;)

The_Morrigan

manonboard wrote: »

I would contact the company and confirm everything about it.

I'd then ask for the deed of appointment i think it's called.

Upon confirming all this, I would ask how is the deposit being handled.

If there is any malarkey that looks like they are claiming they don't have it and won't return it then I'd withhold the same value from the rent until either the landlord or the receiver turns it over or confirms they still have it in writing.

Just be sure to make sure you don't lose out on your deposit because your stuck in the middle of two people who want the rent/legal cat fighting.
If the receiver wants your rent under the lease you currently have, then they can have it only if they also assume the responsibilities of the lease (fixing stuff/deposit).

I'd be careful about turning more money over to the landlord. If he is going into receivership with the place, it's likely he is cash short and not in a great position to return deposits etc.

The landlord is responsible for the return of the deposit unless the receiver wishes to terminate the lease early.

The landlord is still responsible for the upkeep of the property and must still adhere to his landlord obligations.
However, best practice is to contact the receiver first in relation to any property issues as they may decide to resolve the issues themselves.
All this is laid out in the document from the IBF.

Barti

Would Cabot Financial be likely to decide to sell the apartment if it is all above board or would they be likely to agree to fulfill the tenancy agreement which we have until November this year? I presume if they did plan on selling that we would get a certain amount of notice beforehand, right?

I'll make a list of questions anyway and call the number from the website to verify the facts. If all is above board then I'll make sure that the landlord gets everything sorted out between her and the bank and Cabot Financial. I would have thought that the landlord would have been warned about the potential Receivership on their assets by their bank, and would therefore have mentioned something to one of us living here, but they didn't seem to know anything about it. Is it not strange that the landlord has no (apparent) knowledge of her apartment being in receivership? I say apparent since perhaps they do know about it but didn't tell us in the hopes of either sorting it themselves or wanting free money if really desperate.

In the meantime I have cancelled the Standing Order for the rent to landlord, but it will all be going in another account I have so that it is actually put aside. Cabot did send on a document with the letter about receivership from a tenants point of view so I'll read that again and see what I can come up with to ask about. Anything ye would recommend?

The_Morrigan

Nino Brown wrote: »

Exactly, my thinking would be to be skip a months rent payment, take that as your deposit and be on your way. But that advice is probably against the rules so definitely don't do that.;)

Please don't encourage this behaviour - it is a breach of the lease and the tenants obligations.

/Mod

The_Morrigan

Barti wrote: »

Would Cabot Financial be likely to decide to sell the apartment if it is all above board or would they be likely to agree to fulfill the tenancy agreement which we have until November this year? I presume if they did plan on selling that we would get a certain amount of notice beforehand, right?

I'll make a list of questions anyway and call the number from the website to verify the facts. If all is above board then I'll make sure that the landlord gets everything sorted out between her and the bank and Cabot Financial. I would have thought that the landlord would have been warned about the potential Receivership on their assets by their bank, and would therefore have mentioned something to one of us living here, but they didn't seem to know anything about it. Is it not strange that the landlord has no (apparent) knowledge of her apartment being in receivership? I say apparent since perhaps they do know about it but didn't tell us in the hopes of either sorting it themselves or wanting free money if really desperate.

In the meantime I have cancelled the Standing Order for the rent to landlord, but it will all be going in another account I have so that it is actually put aside. Cabot did send on a document with the letter about receivership from a tenants point of view so I'll read that again and see what I can come up with to ask about. Anything ye would recommend?

Barti,

The appointment of a receiver could be in response to a default on another mortgage or debt - sometimes it is a domino effect if a person gets into financial difficulty and there is more than one mortgage/lender/property etc.
The landlord may not have known that this would have an impact on you and the property you live in. However, they may also have been fully aware of the situation and had been trying to sort it out without worrying you and your housemates.

I would ask Cabot if they would honour the lease as it is and if you can carry on as is until November. Also ask how much notice they are going to give you if they are going to terminate the lease early or decide not to renew it.

Make sure you read that document it gives a very black and white view of how this situation should be handled.

Also, get everything in writing!

NewApproach

This is very standard. The receiver has been engaged by the bank to collect the rent and manage the property on their behalf. The Landlord no longer has any powers over either the property as the mortgage holder, or you as the Landlord. You should just pay rent as normal, but to the receiver rather than the Landlord.

Nino Brown

Is the lease still in effect? If the receivers are not bound by it, then the OP should look out for No.1, a deposit is a considerable chunk of cash.

The_Morrigan

Nino Brown wrote: »

Is the lease still in effect? If the receivers are not bound by it, then the OP should look out for No.1, a deposit is a considerable chunk of cash.

Yes it is still effective

Nino Brown

The_Morrigan wrote: »

Yes it is still effective

Do you have any proof of this? I can't seem to find anything to back it up.

There's another thread on the subject, haven't read it all, but one interesting quote is

"Even Threshold acknowledged on a recent RTE programme with Eddie Hobbs and Keelin Shanley (?Money Programme) that a bank receiver can terminate immediately with very limited notice as, unless the bank/receiver has accepted rent, the RTA 2004 security of tenure rules (ie part IV) cannot be enforced against them. I thought like you once too but there was a legal analysis posted here previously. That being said, my experience is of the receiver adopting the lease because it was commercially sensible.

In the OP's case I wouldn't walk away but at the same time I would not overestimate my own tenure."
http://www.boards.ie/vbulletin/showthread.php?p=87601898

Barti

Yeah, the rent agreement goes on until mid-November so there's another while left yet. I imagine the deposit is going to be awkward to get if the landlord is in financial difficulty, and Cabot as a debt collector don't seem in the habit of giving money.

Edit: Sorry, thought you were asking if there was time left on the lease. I don't know much about the renting game other than I pay someone money to rent a place. All this receivership business is above my head at the moment, but I'm learning as I go.

The_Morrigan

Nino Brown wrote: »

Do you have any proof of this? I can't seem to find anything to back it up.

There's another thread on the subject, haven't read it all, but one interesting quote is

"Even Threshold acknowledged on a recent RTE programme with Eddie Hobbs and Keelin Shanley (?Money Programme) that a bank receiver can terminate immediately with very limited notice as, unless the bank/receiver has accepted rent, the RTA 2004 security of tenure rules (ie part IV) cannot be enforced against them. I thought like you once too but there was a legal analysis posted here previously. That being said, my experience is of the receiver adopting the lease because it was commercially sensible.

In the OP's case I wouldn't walk away but at the same time I would not overestimate my own tenure."
http://www.boards.ie/vbulletin/showthread.php?p=87601898

It's in the document from the IBF that I've referred to more than once in this thread and linked to back on page one.

If your landlord is an individual (not a company) and a receiver has contacted you, the most likely reason is that he or she has been appointed in relation to a mortgage your landlord has over the property you live in. That means the receiver is most likely to be a receiver of mortgaged property, so this guide focuses on that category of receiver. It is possible that the receiver belongs to another category described above and, if so, the receiver’s letter will indicate that (if it does not, the receiver will clarify the
point if you request that).
A receiver of mortgaged property:
• Is appointed by a bank in relation to a mortgage your landlord has put in place over the property you live in;
• Has basic functions that are set out in legislation - if the landlord signed the
mortgage before 1st December 2009, the legislation is the Conveyancing Act 1881;
the Land and Conveyancing Law Reform Act applies to mortgages signed from 1st December 2009 on;
• (Most likely) has additional functions that are contained in the mortgage document itself; and
• Is regarded as an agent of your landlord (that is, the receiver has power to act on behalf of the landlord under the mortgage document) even though the receiver is appointed by the bank.

All of your landlord’s obligations to you under your lease and under law (for example, the Residential Tenancies Act 2004) remain the responsibility of the landlord and are not affected by the receivership. In general, neither the bank nor the receiver take over the landlord’s obligations to you. Generally, the appointment of the receiver does not change your obligations under your lease. However:
• You must pay the rent to the receiver if appointed and you are entitled to a receipt for that payment if you request it;
• You should not pay your rent to your landlord while a receiver remains
appointed;
• If you fail to meet your obligations under the lease, it is possible for the receiver to enforce them instead of your landlord.

That document also deals with tenant rights:

CAN THE RECEIVER USE HIS POWERS UNDER THE MORTGAGE TO TERMINATE
MY LEASE (THAT IS TO END IT EARLY)?
Normally, the receiver can only terminate your lease in the same circumstances as your landlord can. For example, if the receiver wishes to do this he or she must give you advance notice and the length of that notice must meet the standards set out in your lease and in the Residential Tenancies Act. However, in certain exceptional circumstances, the law
gives the bank additional powers to terminate a lease. For example, a bank can ask a court to terminate a lease if it proves it was put in place without the bank’s consent and that it reduces the value of the bank’s security. Also, the bank can disregard a lease where it requires the tenant only to pay a
rent which is well below market value, or if it contains other terms that would not make good commercial sense for the landlord.

DO I LOSE MY RIGHTS UNDER THE RESIDENTIAL TENANCIES ACT IF A RECEIVER IS APPOINTED?
Normally no, but see the exceptional circumstances mentioned above.

I should also say that as the receiver is providing these guidelines, it must be their standard procedure to follow them unless an exceptional circumstance arises.

Just to note, the thread you have referenced is in relation to repossessions, just because a receiver has been appointed does not necessarily mean that a repossession will take place.

Barti

So according to that document from the IBF all rent must be paid to the Receiver of the property, and the deposit is more than likely owed by the landlord. The ability to get this money off the landlord though may be difficult. I know some people have decided to not pay the last month's rent, but technically that is a bad idea, plus we got 1/3 of the original deposit back when one of the tenants moved out and the new tenant hasn't paid his part of the deposit to the landlord yet. So not paying the last month's rent would lead to awkward situations I think.

Thanks for all the info from all of you, I'll take it all into consideration. I wonder though could the lease be broken and we got out of here to avoid all the problems? Or is that just more headaches than it is worth, if at all possible?

The_Morrigan

Barti wrote: »

So according to that document from the IBF all rent must be paid to the Receiver of the property, and the deposit is more than likely owed by the landlord. The ability to get this money off the landlord though may be difficult. I know some people have decided to not pay the last month's rent, but technically that is a bad idea, plus we got 1/3 of the original deposit back when one of the tenants moved out and the new tenant hasn't paid his part of the deposit to the landlord yet. So not paying the last month's rent would lead to awkward situations I think.

Thanks for all the info from all of you, I'll take it all into consideration. I wonder though could the lease be broken and we got out of here to avoid all the problems? Or is that just more headaches than it is worth, if at all possible?

You should discuss that with Cabot. To be honest unless you know their plans you can't really make an informed decision yourselves, best bet is to organise a chat with them and all the tenants.
They could be happy to leave everything as is because it's a steady stream of income. The only change to you is where the rent is going.