Dáil Éireann Debate, Thursday - 3 July 2014
41. Deputy John Browne asked the Minister for Finance if he will confirm the particular consumer codes applying to buy-to-let mortgages for personal investment as distinct from buy-to-let mortgages attached directly or indirectly to trading entities; and if he will make a statement on the matter. [28777/14]
View answerI am informed by the Central Bank that, in the case of buy-to-let mortgages, the following Codes of Conduct may apply:
- Consumer Protection Code 2012
- Code of Conduct for Business Lending to Small and Medium Enterprises (SME Code)
- Code of Conduct on Mortgage Arrears (CCMA)
In order to determine which Code applies in a particular case, a regulated entity would need to assess whether a consumer meets the definition of 'personal consumer', i.e. a natural person acting outside his or her business, trade or profession, in which case the provisions of the Consumer Protection Code 2012 would apply.
If the consumer is considered to be acting within his or her business, trade or profession and meets the definition of 'smaller enterprise', as set out in the SME Code, the provisions of the SME Code would apply.
The CCMA would apply where the consumer's mortgage loan is secured by his/her "primary residence", as defined within that Code. Primary residence is a property which is (a) the residential property which the borrower occupies as his/her primary residence in the State or (b) a residential property which is the only residential property in the State owned by the borrower.
In summary, a regulated entity would be expected to consider the specific circumstances of each case in order to determine whether the consumer is a "personal consumer" and in order to determine which Code would apply.
