LPA Receivership is one method, a very flexible method, to aid the recovery of non-performing debt secured against a property. It is appropriate in circumstances where there are rents to be collected and applied to the debt; you are technically constrained; you do not have the time or the personnel to undertake the more complex recoveries yourselves and, very often, you need to distance yourselves from the issues surrounding the property.

These can include issues related to property owner’s obligations for which you would become responsible if you took direct control. Mortgagees with perceived deep pockets can easily become the target for mischievous claims or expensive litigation from tenants, authorities and owners.

The straight forward repossession and sale of an unoccupied property can most cheaply be undertaken by your team directly but it is not always the case that you will wish to deal with the sorts of property issues mentioned in the Checklist below. Quite a few of these can appear if the period of time needed to complete a sale lengthens further as the market slows and they have to be dealt with in the interim.

These issues become more prominent with let property, particularly portfolios of let property, where securing tenant income to continue loan repayments, or retain the investment value, is important.

LPA Receivers can also provide direct savings by arranging insurance under a blanket policy and avoiding the payment of council tax or commercial property rates.

The involvement of an intended Receiver can also bring home to mortgagors, who hope the problem will go away, the seriousness of the debt repayment. We have often found that our involvement, without formal appointment, is enough to jolt a solution out of the mortgagor.

You may find helpful the Checklist of circumstances in which an LPA Receiver can be appropriate, as an aide memoire gleaned from years of experience.

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