The Building Societies (Limited Credit Facilities) Order 1987

Limit on balances

6.—(1) A society may enter into a facility agreement only if under its terms the facility account holder agrees to the effect that—

(a) if at any time the facility debt exceeds a limit specified for the purposes of the facility agreement (and being in the range beginning at nil and ending at the relevant limit) he will not at that time operate the facility account or authorise, or cause the authorisation of, another person to operate it, and

(b) he will not at any other time operate or authorise, or cause the authorisation of, another person to operate the facility account if such operation would cause the facility debt to exceed that specified limit,

and for the purposes of this Order a facility limit is the specified limit to which this paragraph applies.

(2) Joint facility account holders shall be treated, for the purpose of this Article, as a single facility account holder and each facility limit on any facility account of any of them with the society is to be taken into account in determining the relevant limit described in paragraph (4) below in relation to the facility agreement between the society and them, and so is the aggregate of sums outstanding in respect of loans made by the society under section 16 of the Act to any of them.

(3) It shall be the duty of the society to recover as soon as practicable from any facility account holder any amount by which his facility debt to the society (or, where there is more than one such facility debt, their aggregate) exceeds at any time—

(a) where he has only one facility account with the society, the limit which would be the relevant limit in respect of that account were it opened at that time, or

(b) where he has more than one such facility account, the limit which would, were those accounts combined into a single account opened at that time, be the relevant limit in respect of that single account.

(4) For the purposes of this Article the relevant limit is x minus y where—

(a) x is—

(i) the limit for the time being in force under section 16(8) (loans to individuals) of the Act, or

(ii) if a mobile home loan is outstanding as a result of which the amount which may be lent under section 16 of the Act is less than that limit, that lesser amount, and

(b) y is the aggregate of—

(i) sums outstanding in respect of loans made by the society under section 16 of the Act to the facility account holder, and

(ii) facility limits on any other facility account of the facility account holder with the society.