Schedule 3: Transitional provision and savings
110.Schedule 3 sets out a number of transitional provisions which will apply following the commencement of specified sections. Some of these provisions are set out below in more detail.
111.As at the date of the commencement of section 86F, any term in a regulated agreement existing at that date which enables the creditor or owner to impose compound interest on a default sum will have the effect that he will only be able to recover simple interest in that regard.
112.Sections 140A to 140C will apply to all new agreements made after the commencement date and will apply to any agreements already made which continue in existence at a specified date after commencement. The period between the commencement date and the specified date is called the “transitional period.” Sections 137 to 140 of the 1974 Act will continue to apply to agreements that have been completed (e.g. no party has any further obligations under the agreement because no further sums are payable) before the end of the transitional period. The transitional period will allow creditors to ensure that any agreements that will continue beyond the end of the transitional period comply with the amended 1974 Act.