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New checklist for Pre-Action Protocol in possession claims

In April 2015 we reported the introduction of an updated Pre-Action Protocol for possession claims. The updated protocol introduced the following additional requirements for lenders to:

  • provide information about whether the property is occupied by an authorised tenant; and
  • send the customer a statement of payments due and received for the previous two years.

At that time the Ministry of Justice did not update the prescribed Pre-Action Protocol checklist to reflect the changes.

But this all changed on 5 October 2015 when they introduced revised documents to reflect the new requirements of the protocol. 

Some key points for you to consider include:  

Particulars of Claim 

Paragraph 10 has been revised with the lender now having to state whether any tenancy was entered into - with or without the lender's authorisation - and if the former, what steps the lender intends should be taken.

New sections to the Pre-Action Protocol checklist

New sections have been added to reflect the changes in the protocol. As a result numbering within the checklist has changed; something to bear in mind if checklists are being populated by automated systems.

Paragraph 2(b) now requires confirmation that the two year statement has been sent to the customer, as well as the date it was sent.

Paragraph 7 now states "Please explain what steps the mortgagee has taken to check whether there is a tenant of the borrower in occupation, whether that tenant was authorised by the mortgagee, and what order the mortgagee is seeking in light of the information obtained".  

Tenants – complying with the protocol

It's important to remember that the protocol is concerned with authorised tenants but does not apply to buy-to-let mortgages.

The main points of consideration for ensuring compliance are:

  • The lender must specify if the property has been let by the customer without its authorisation;
  • The protocol is concerned with authorised tenants; there is no express requirement to make enquiries of tenants in other cases;
  • If the lender believes an authorised tenant may be in occupation, it should take steps to ascertain whether the tenancy is authorised before issuing proceedings.  The details and outcome of those enquiries must be set out in the checklist.
  • If it appears the property is occupied by an authorised tenant, the court will actively consider what order the lender is seeking.  The outcome is likely to reflect the tenant's right to occupy the property for the term of their tenancy.  Lenders should review the various strategies available to them before taking court action where an authorised tenant is in occupation.

If you have any questions regarding strategy for ensuring compliance with the protocol or completion of the new checklist, we would be happy to review this with you. 

This publication is intended for general guidance and represents our understanding of the relevant law and practice as at October 2015. Specific advice should be sought for specific cases. For more information see our terms & conditions on www.TLTsolicitors.com

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