What are the changes to the Pre-Action Protocol?
On the 1st November 2021 a New Pre-Action Protocol for Possession Proceedings Based on Mortgage Arrears in Respect of Residential Property (“the Protocol”) came into force in Northern Ireland.
What are the key changes?
- Affidavit: The Protocol now states that “parties shall in their affidavit evidence explain the actions that they have taken to comply…” . For most Lenders this will require amendments to their Affidavits.
- Financial Ombudsman Service (“FOS”) Complaints: The obligation to consider postponing proceedings where a complaint is made to FOS is now mandatory. It is also mandatory that notice is given to the Customer at least five business days before starting proceedings, if the Lender decides against postponing.
- Social Security Agency SMI & Insurance Claims: Where a customer can demonstrate to a Lender that they have made a claim for SMI or to an insurer. The obligation is now not to start proceedings. However it is important that customers can demonstrate to the lender that conditions are met.
- ‘Should’ to ‘Shall/Must’ terminology: There are a number of changes where the word ‘should’ has been replaced with ‘shall’ or ‘must’.
- Housing Rights Details: This details a requirement to enclose the contact details for Housing Rights, with a copy of the Letter Before Action.
- Proposed Sales: If a customer’s proceedings were delayed, this change makes it mandatory to facilitate a sale to provide various items of information to the lender. This includes authorising the estate agent and solicitor instruction to communicate with the lender about the progress of the sale, and the customer’s conduct.
We recommend that each lender review the content of the Protocol against their own procedures and make changes where required.
Many of the changes are minor in their impact on lender procedures. In fact, some of the changes have actually added greater flexibility to the discretion lenders have to deal with proposals.
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We encourage all lenders to consider the Protocol in full and ensure their procedures align and we welcome discussing with you your preferred approach to instructing us.