MPAP amends “The intimation game”28th August 2015
Sometimes advising clients can be difficult. The Ministry of Justice’s decision to unilaterally enact the amendments to the MPAP without telling anyone has certainly added to those challenges.
The three main areas of contention are:
- The new obligation under 5.1 (b) to provide “information on the current monthly instalments and the amounts paid for the last 2 years”
- Authorised tenants
- When the new checklist will come in and what questions it will ask
It is unclear why the courts want lenders to do more than their MCOB regulatory requirements in relation to the provision of information under the new 5.1(b), or more particularly when in the process. Should it be when the borrower falls into arrears or at the letter before action stage? It certainly must be pre-action and not, as some hope, at witness statement stage.
The wording addressing authorised tenants is much watered down from the original proposed wording which made no sense. Even so, the wording is vague and unclear as to what lenders should do practically. Lenders are now specifically required to take steps to discover who is in the property. Will a letter suffice or is a field agent visit what they are looking for? As buy to lets are specifically excluded from the MPAP, it seems clear “consent to lets” will be the main area of concern and lenders should be considering their approach to this issue carefully. Will it mean the increased use of LPA receivers?
At the time of writing there is still no new checklist. The current one is not fit for purpose as the numbers no longer match up. That is far from helpful and there is no indication as to when it will become available. The MPAP is now part of a larger collection of protocols and failure to comply with it now has prescribed sanctions such as costs penalties, strike out etc. Previously, a breach of MPAP might have led to an adjournment but that is not the case now. In summary, lenders have wording which is unclear, a defective checklist and serious sanctions for noncompliance. This is far from ideal.