Private mortgage to business rental query

Hi all,
I'm hoping someone can give me some advice on this...
If I purchased my Council flat (lease) under the Right to Buy Scheme and within the first three years decided I had to move (due to unreasonable behaviour from neighbours or an improvement in my financial position so i can afford someone better) where would I stand with regards to renting out the flat to a business for use as an office? Would that side-step all the usual red tape on renting out to sitting tenants?
I know normally with a mortgage you can't rent out any residential property without permission from the lender unless you have a buy-to-let mortgage..
I don't want to go down the buy-to-let route as I plan to live in the flat for a few years, but the problem neighbour situation may force me to move sooner than I would like.. and I don't want to have to pay a mortgage then for x years on an empty flat. The Right to Buy Scheme means you can't sell within the first 3 years, else you have to pay back some or all of the discount.
Assuming there is no flexibility to sell early under Right to Buy for exceptional circumstances, would renting to a business as an office under those circumstances be a violation of the mortgage and cause problems?
What other options do I have? Apart from just approaching the lender and asking permission to sub-lease? I'm planning to get a mortgage with a building society if that makes any difference..
Thanks for any advice!
Reply to
Paul
I would be surprised if that wasn't a violation of the lease. It would probably also be a violation of planning law.
You can't rent it out to a business without their permission, either, and if it is breach of the lease, the mortgage lender would probably be afraid of forfeiture of the lease.
Reply to
David Woolley

No. You would require PP for a change of use which you almost certainly wouldn't get
Of all the hoops that you have to jump through to rent out a previously occupied "main" property. This one can be ignored
Ignoring this clause in the mortgage.
I'm not suggesting that you should do this, just that if you do, it isn't anywhere near the big deal that you are making it to be
tim
Reply to
tim....

stand with regards to renting out the flat to a business for use as an
Hi Tim thanks for the reply. Although it seems unlikely the lender would ever find out if I leased the property to a business, what do you think the likely consequences would be if they did? I've read somewhere they can demand full repayment of the mortgage for breach of contract/misuse of property in a worse case scenario.
If I did just go ahead, this makes all the more reason why it's better to go for the business office use rather than sitting tenants with right I expect..
paul
Reply to
Paul

Foreclose (demand full repayment) and/or flag your credit record for fraud.
The insurance would probably be void, as well.
Reply to
David Woolley
Moreover, I can't believe this wouldn't breach the lease, so the council/housing association, could forfeit the lease. Theoretically you lose all your money. In practice, they will probably make you forfeit the early sale penalty and their legal costs, but give the mortgagor the rest back, leaving you with a big debt to the mortgagor. Given that this goes completely against the public policy associated with right to buy, I would expect them to act, if they became aware.
Also, any business likely to rent from you is going to be dodgy, one way or the other.
Reply to
David Woolley
I just got off the phone to the lender I'm interested in taking a mortgage with (Nationwide) and they were surprisingly very accommodating.
They confirmed they have no rules which would prevent me leasing the flat to a business for use as an office and even went as far as to say they would not have a problem with me doing that, providing I contacted them first and got permission. They said business use would not be a problem providing its cleared, but that their policies can change and each case needs to be checked individually when it arises.
The only condition they have is they won't lend on a property that is not intended to be the main residence or if the intention is to lease it from the beginning.
Reply to
Paul

which no court will order as a first remedy
Just claim ignorance of the clause - thousands of people do it. Who reads all that small print?
That's a separate consideration and totally separate contract from your mortgage company (if you have any senses)
tim
Reply to
tim....

I'm not suggesting you should ignore the clause and rent to a company (cos I think that's a silly idea).
I'm suggesting that you ignore the clause and provide a normal domestic rental.
tim
Reply to
tim....

Tim but isn't a normal domestic rental far more tricky legally speaking because of all the rights tenants have in law..that's why I thought a business lease is the way to go..you can do fixed term or open ended renewable lease with option to buy at market value once the initial 5 years sale exclusion period is passed.. while still being able to end the lease by serving notice if the lender required it or local authority.
I never mentioned private rental when I spoke to the building society earlier but they seem to have no problem with business leasing.
Reply to
Paul

Home owners insurance will be a determining factor if you are going for lease on it, may it will be affect the quotes.
Reply to
stevenricherd

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