PART II SPECIFIED ACTIVITIES

Chapter XVRegulated Mortgage Contracts

The activities

Regulated mortgage contractsI161

1

Entering into a regulated mortgage contract as lender is a specified kind of activity.

2

Administering a regulated mortgage contract is also a specified kind of activity, F13where—

a

the contract was entered into by way of business on or after 31st October 2004; or

b

the contract—

i

was entered into by way of business before 31st October 2004, and

ii

was a regulated credit agreement immediately before 21st March 2016.

3

In this Chapter—

F12a

F4subject to paragraph (5), a contract is a “regulated mortgage contract” if, at the time it is entered into, the following conditions are met—

F5i

the contract is one under which a person (“the lender”) provides credit to an individual or to trustees (“the borrower”);

ii

the contract provides for the obligation of the borrower to repay to be secured by a mortgage on land F6...;

iii

at least 40% of that land is used, or is intended to be used—

aa

in the case of credit provided to an individual, as or in connection with a dwelling; or

bb

in the case of credit provided to a trustee which is not an individual, as or in connection with a dwelling by an individual who is a beneficiary of the trust, or by a related person;

F11but such a contract is not a regulated mortgage contract if it F3falls within article 61A(1) or (2);

b

“administering" a regulated mortgage contract means either or both of—

i

notifying the borrower of changes in interest rates or payments due under the contract, or of other matters of which the contract requires him to be notified; and

ii

taking any necessary steps for the purposes of collecting or recovering payments due under the contract from the borrower;

but a person is not to be treated as administering a regulated mortgage contract merely because he has, or exercises, a right to take action for the purposes of enforcing the contract (or to require that such action is or is not taken);

c

“credit" includes a cash loan, and any other form of financial accommodation.

4

For the purposes of F1paragraph 3(a)—

F7a

“mortgage” includes a charge and (in Scotland) a heritable security;

F14aa

“land”—

i

in relation to a contract entered into before IP completion day, means land in the United Kingdom or within the territory of an EEA State;

ii

in relation to a contract entered into on or after IP completion day, means land in the United Kingdom.

b

the area of any land which comprises a building or other structure containing two or more storeys is to be taken to be the aggregate of the floor areas of each of those storeys;

c

“related person", in relation to the borrower or (in the case of credit provided to trustees) a beneficiary of the trust, means—

i

that person’s spouse F9or civil partner;

ii

a person (whether or not of the opposite sex) whose relationship with that person has the characteristics of the relationship between husband and wife; or

iii

that person’s parent, brother, sister, child, grandparent or grandchild; F2...

F8d

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F105

In this Chapter, a contract entered into before 21st March 2016 is a “regulated mortgage contract” only if—

a

at the time it was entered into, entering into the contract was an activity of the kind specified by paragraph (1), or

b

the contract is a consumer credit back book mortgage contract within the meaning of article 2 of the Mortgage Credit Directive Order 2015.