Tenant querying mortgage company clause on repossession

Hi, I’m at the contract signing stage with a prospective tenant. My mortgage company have requested that I add the following custom Clause:

The Tenant hereby acknowledges that they’re aware that the property is subject to a mortgage and that, in the event of the Landlord (the Mortgagor) defaulting on the mortgage, the mortgagee may exercise its right to to take possession of the property under ground 2 of schedule 2 of the Housing Act 1998 for the purpose of disposing of it, and the Tenant hereby agrees and acknowledges that any right they may have under the tenancy is postponed in favour of the rights of the mortgagee.

The tenant has said that he knows it’s unlikely I’d default on the mortgage but understandably wants to know what notice the mortgage company would give him in this scenario. Does anybody know - would there be a general notice period enshrined in law of would it vary depending on the mortgage company? Many thanks in advance. Rebecca

Its a standard clause in most tenancy agreement, so I’d be surprised if there is not something to the same effect already there. In practice it would take a very long time indeed to evict a tenant under this clause. See this recent story about a man who was finally evicted after not paying his mortgage for 23 years.

Its in the US, but the protections are similar here. In the first instance its likely that the lender would repossess the property and make an arrangement with the tenant to continue living there and payjng rent.

Wow, that’s some story! Thanks for the advice - I also found some useful guidance on the CAB and Shelter websites. It would seem the tenant has little to worry about as you say.