Law of Property Act Receivers
Originally a creation of the Law of Property Act 1925 (s101), the powers afforded to a Law of Property Act (“LPA”) Receiver are limited by modern standards and an appointment is usually made today under the lender’s fixed charge (mortgage) as well as under the 1925 Act. The acronym “LPA” is usually adopted as a convenient form of shorthand and is used as such below. The appointment will normally relate to real property, but can also relate to items of plant and equipment.
The Enterprise Act 2002 restricted the appointment of Administrative Receivers, considered by some industry observers as being biased towards the lender’s interests, in favour of Administrators who have a duty of care towards all classes of creditor, not just those with security.
This legislative change coupled with the massive increase in purely property related debt, where there is little, if any, useful function for an accountant or Insolvency Practitioner has caused lenders to reacquaint themselves with the LPA Receiver.
Sanderson Weatherall’s expertise in this area predates these legislative changes and our RICS Registered Receivers, who are also all members of NARA (the Association of Property and Fixed Charge Receivers), have many years of experience in acting as principals in property recovery situations. Our appointment takers are all Partners within the firm although we also have other NARA/RICS qualified surveyors working as case managers with the team.
This expertise is reinforced by Sanderson Weatherall’s track record in the corporate recovery arena (please see our Asset Advisory and Recovery pages) and experience gained in each area is used to inform the other.
In addition to a formal LPA process there are other exit routes available to secured lenders where we can advise and assist:
- Assisted Voluntary Sales
- Mortgagee in Possession
- Mortgagee not in Possession
- Assistance to Lenders seeking possession
The LPA Receivership process is not complicated, being less burdened by legislation, mainly the Insolvency Act 1986, and the LPA Receiver need only concern himself with those creditors and obligations which affect the property over which he is appointed. The appointment places effective distance between the mortgagee and the mortgagor. A Receiver, unlike an administrator, can be removed by the mortgagee at any time.
In law, the LPA Receiver acts as agent for the mortgagor (borrower) and whilst the principal obligations are to the mortgagee (lender), the Receiver has a duty of care to the borrower for proper conduct and to obtain best price at the point of sale.
Sanderson Weatherall’s LPA Receivers are fully familiar with the process, legal duties and in managing through an instruction from appointment stage to realisation of the asset. All of our senior personnel have extensive “hands on” experience of asset realisations of all kinds of property and are able to provide a reliable and effective route to market for the assets involved.
We have built up a network of agents, auctioneers and contractors throughout the UK upon whom we can call in the event we are not using our own personnel for an aspect of a case.
In the interests of transparency, we do not have any commission arrangements with any of our suppliers for property services. Any savings we have negotiated are passed on to our clients.