Law of Property Act Receivers act for banks and private lenders who have secured their loans by a Legal Charge (mortgage) on a property. Under the terms of the Legal Charge the lender can appoint a Receiver to deal with a property when the terms of the mortgage are not being met – usually when repayments and interest are not being paid.
Lenders can face a number of circumstances in which they do not have the capacity, legal or physical, to deal with properties. Lenders may not wish to expose themselves to the liabilities that attend a corporate body taking possession of a property directly. LPA Receivers are experts who can manage the property, deal directly with occupants, outstanding problems, insurance and repairs. Receivers collect in money to repay the debt, from rents or by selling the property.
The role of the LPA Receiver is to focus on recovering the debt owed to the lender. This involves taking control of the property and, effectively, standing in the shoes of the owner. In most cases the task is then to arrange an early sale of the property in order to repay as much of the loan as possible. Lenders review each circumstance, or commission a report on the appropriateness of Receivership. This may highlight issues not previously known to lenders which may effect how a property can be dealt with. Details of planning permissions and other licensing should be examined at this stage if at all possible. Factual occupancy arrangements are checked and, very often, the borrower is asked to contribute, to see if there is a way that the loan can be repaid without further formal action.Once appointed, the LPA Receiver takes over the role of the owner and the owner may not deal with the property in any way. The Receiver has full discretion as to how to deal with the property. If obtaining planning permission or some other action can improve the realisable value, the Receiver may decide to pursue the opportunity but is not obliged to do so.
No. A pre-Receivership report will offer guidance and possible solutions on how to deal with the outstanding loan and may offer proposals on resolving a broken down relationship between the lender and customer which would lead to a successful repayment of outstanding liabilities. If appropriate the experts can act as go-betweens to help resolve matters.
LPA receivers are individually appointed and usually two are appointed together. Denise Ford, our Managing Director, is a past chairman of The Association of Property and Fixed Charge Receivers (NARA) who guide and provide continuous training for LPA Receivers. We are able to deal with property all over the UK. If you are considering appointing an LPA receiver, we will be happy to provide you with examples of successful recent receiverships as well as guidance on when an appointment is appropriate.
If you have received notification from your lender that they are proposing to appoint an LPA Receiver or your property or properties are already in LPA Receivership we would strongly recommend that you seek the advice of a solicitor or the Citizens Advice Bureau who will be able to provide more detailed advice specific to your case.
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Contact: Denise Ford MRICS
Tel: 01634 294994
E-mail: [email protected]