I've read many posts sayig levels with MDL's are better. So i've tried using MDL terrains- walls- and so on but my character model passes through many of them- falling through terrain, through solid walls-

I check the model's properties and they are not set to be passable. Right now I'm testing using the default template for the character-

I must be overlooking something? Is it because I haven't done a final build with the light and distance slider options set to max in the build options or is there some flag i need to be checking or what?

Any help would be appreciated. Thanks.