Explanatory note

The requirements which must be satisfied in order for an advance to be classified as a class 1 advance are in section 11(2) of the Building Societies Act 1986. One of these requirements is that the land is for the residential use of the borrower or a dependant of his of a prescribed description.

This Order specifies the circumstances in which land is for a person’s residential use, who are to be a person’s dependants and the evidence upon which a building society is entitled (in the absence of evidence to the contrary) to be satisfied as to these matters.

This Order comes into force on 1 April 1988. Before that date the classification of land according to residential use is governed by article 5 of the Building Societies Act 1986 (Powers and Miscellaneous Transitional Provisions) Order 1986 (S.I. 1986/2169), which treats land on any of which a borrower or his dependant resides as being for the residential use of the borrower. This Order instead applies a test of residential use of forty per cent of the land and sets the criteria for how that forty per cent is measured.