when is a mandate not a mandate

I would have thought that the first recourse is to seek a 'deeper' explanation from AC as to 'why' than has been provided on the Q&A. If one was not happy with that, I would think you would next have to satisfy yourself that there is nothing in ACs general Ts and Cs which allow them to make such an apparent change unilaterally.

Having gone and looked at the credit report and the multiple statements of assignment of rental income to AC through the report, with no statement that this was for a time limited initial period only, it could be described as 'surprising' that this is not in fact what is happening. Without knowing what ACs explanation is, on the face of it this appears to be a (considerable ?) material change to the basis on which people lent. 

However, perhaps another take on it is that the covenant / mandate still exists but AC decided to allow a 'revokeable' waiver. Given that there is a 6 month interest buffer held, and a 1st charge on the property, if such a waiver existed and in practical terms it can be reversed at whim so that rental monies going forward are paid into ACs coffers as originallyh stated, one might perhaps argue there has been no material change.

I am not in this loan, but will be extremely interested to hear the story / explanation. 

I'm guessing that the rental mandate only applied until 6 months surplus interest has accrued. The CR isn't very clear, but the covenant on page 5 says that 6 months interest buffer to be built up from first 4 months rent.

This is a 5 year loan. If AC received the rental income each month the loan would be paid off in less than 3 years.

Fair point. Poorly written document.

Though we wouldnt know about an issue if the buffer had been used to cover the late payment without a specific statement from AC - anything that obliges them to inform us?

andy2001:  If you're going to quote from the Q&A, why not use the one from Tuesday morning...
Did the borrower confirm the position with payment by early that afternoon?  NO.

Did AC use the funds held in the interest buffer to pay AC's lenders?  NO!!

I dearly wish AC would start doing what they say going to do.

My interpretation is the same as you. The mandate runs for the length of the loan, the rental income is payed directly to the AC Client account, over the first four months of the loan any excess income not used to make repayments is used to create a 6 month payment buffer after which one then assumes the excess income is paid to the borrower.

Any non-payment now means that either AC have failed to enforce the mandate, AC have failed to remember that they hold the retained buffer (didn't they do that on another loan) or there has been no rental income for the past six months in which case AC have failed in their duty to Lenders in not passing on the information. Any which way you look at it there is a failure in some way on AC's part

There was a late payment on L***s Commercial loan a few months back where a buffer had already been built up as per CR. That loan, in all fairness barring this one month, has always been a prompt payer bur AC had totally forgotten the aforementioned & a lender reminded them & they duly paid interest out of the buffer. It is little things like this that start small seeds of doubt on whether a ship is either manned well enough or being sailed properly.