FCA Handbook - MCOB 7.8 Home purchase plans

You are viewing MCOB 7.8 Home purchase plans as of . MCOB 7.8 Home purchase plans was last updated on 26/04/2014.

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MCOB 7.8 Home purchase plans

General

Note: The rules in this chapter regarding how a firm must provide information required by this section apply (see MCOB 7.3).

Post-sale disclosure

A firm that enters into a home purchase plan with a customer must ensure that before making the first payment the customer is provided with a prominent reminder that the customer should check that his right to occupy the property has been properly safeguarded.

A firm is reminded of its obligation to ensure that its customer's interests are protected to a reasonable standard (see MCOB 2.6A).

Annual statement

A firm must provide the customer with a statement at least once a year (or, in relation to the first statement, within the first 13 months of the plan term) covering the home purchase plan and including information about:

(1)
payments due and made during the period since the last statement (or, where the statement is the first statement, since the customer entered into the home purchase plan), including:
1. (a)
  whether the payment is a rental payment or a purchase payment;
2. (b)
  the applicable rental rate(s);
3. (c)
  where relevant, the customer's beneficial interest in the property;
(2)
the remaining acquisition amount;
(3)
the actual remaining term;
(4)
the ability of the customer to terminate it early and sell the property, together with any charges that would apply.

Annual statement - additional content for customers in arrears

If a firm uses the annual statement to provide a customer with a written statement relating to arrears, it will need to include the actual payment shortfall in the annual statement (see MCOB 13.5.2 G (4)).

In some circumstances, a firm may agree a temporary payment plan with a customer that does not involve the customer paying the full amount he owes in each payment period. Where an account in arrears is subject to such a payment plan, and the amount that falls due each payment period is greater than the agreed payment, the firm will still need to show the payments that were due during the period since the last statement. However, in these circumstances, the firm may wish to add information to acknowledge that a temporary payment plan is in place.

Tariff of charges

A firm must include a tariff of charges with the annual statement if it has changed since the previous version provided.

Event-driven information

When a post-sale variation of the home purchase plan is proposed or takes place, a firm should have regard to the Principles (in particular, Principles 6 and 7) in determining the action it should take and what information to provide to the customer.