The Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears

April 2015

The Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears

The 78th and 79th updates to the Civil Procedure Rules of England & Wales came into force on 6 April 2015 as widely publicised and scheduled.

However, as well as the 78th and 79th updates, changes to the Pre-Action Protocols (new and amended versions) also came into effect on 6 April 2015 including an updated Protocol for Possession Claims based on Mortgage or Home Purchase Plan Arrears in Respect of Residential Property (the “Mortgage PAP”).

It had been known that the Civil Procedure Rule Committee (“CPRC”), in an advisory capacity to the Master of the Rolls, had been consulting and working on proposed amendments to various Pre-Action Protocols, including the Mortgage PAP. However, it was only in mid March 2015 that the minutes of the CPRC February meeting became available in which it was recorded that some of the CPRC’s work on the Protocols had been completed and would be made public, whilst the CPRC continued the unfinished aspects of its work in this area. Consequently, some commentators did not anticipate any changes to the Mortgage PAP being brought into effect until the autumn of 2015. 

The very short lead time which preceded the bringing into effect of the updated Protocols, is illustrated by the fact that the website of the Ministry of Justice (“MOJ”) did not contain any advanced information about the changes. Indeed, the MOJ’s website continued to display the former versions of the Protocols until 9 April 2015 when a Notice about the changes,  that they had come into effect on 6 April 2015 and a link to the PAP making document was added to the site. 

However, as at 13 April 2015, the Mortgage PAP checklist (court form N123) that is available from the MOJ website continues to be the version last modified in April 2010. Therefore, it corresponds with the old Mortgage PAP, not the updated Mortgage PAP and awaits updating, notwithstanding that the new Mortgage PAP is now effective. 

Substantive changes to lenders’ procedures

The updated Mortgage PAP, available on the MOJ website, contains some provisions which will no doubt require substantive changes to lenders’ own procedures to stay within the new Mortgage PAP. Perhaps of greatest impact for lenders will be: 

•the new paragraph at 5.1(b) which states that when the borrower falls into arrears, the lender must provide the borrower with information on the current monthly instalments and the amounts paid for the last 2 years; and 

•the provisions around ‘authorised tenants’, including that the lender should seek information about whether the property is occupied by an authorised tenant. 

The timing of the bringing into effect of the changes to the Mortgage PAP, if not the substance of those changes, will come as news to some interested parties. However, it is clear that lenders shall need to carefully consider the updated Mortgage PAP in order to identify what substantive changes may need to be made to their existing processes for mortgage arrears cases which have not yet been commenced at court and which are caught by the PAP.

Written by Jonathan Preston
Principal Solicitor - Recoveries and Litigation
Optima Legal