LPA Fixed Charge Receiverships
Law of Property Act Receiverships
At Moorfields, our help with Law of Property Act Receiverships begins before you even get in touch.
Read our guide below for advice on the process, or give us a call today to discuss it with one of our experts.
Why are LPA receivers needed?
Law of Property Act receivers act on the behalf of banks and private lenders, who have secured their loans by a legal charge (mortgage) on a property. If the terms of the legal charge aren’t being met, the banks and lenders may not have the legal or physical capacity to take possession of the property without facing liabilities.
That’s where the LPA receiver comes in. 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.
What does the LPA receiver do?
The role of the LPA Receiver is to focus on recovering the debt owed to the lender. They’ll manage the property, collect rent, and deal directly with occupants, outstanding problems, insurance and repairs. 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.
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.
How do I determine if a receivership is the right option for me?
Lenders review each situation before they start the formal process, and often come to Moorfields to commission a report on the appropriateness of receivership first. This may highlight issues not previously known to lenders, and affect how a property can be dealt with.
Details of planning permissions and other licensing issues are examined at this stage where possible, as well as occupancy arrangements. 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.