What does an LPA receiver do and why are they appointed?

The Law of Property Act 1925 (LPA) details the rights and responsibilities of lenders and borrowers who use property as collateral or security for a loan. If terms of the loan are breached, the act sets out options for lenders to take to recover the loan and ‘LPA receivers’ can be appointed to deal with the case.

What does an LPA receiver do?

• Takes liability away from the lender
• Manages the efficient sale and management of the property to recover debts

Our duty as Receivers is to administer the management of the property, collect the rent and, if required, dispose of the property. If the property is unoccupied but is suitable for letting, our appointed management agents may be asked to find suitable tenants. Any rental income generated will be applied to the Customer’s mortgage account. Although no two receivership cases are the same, we’ve listed the typical steps taken for successful debt recovery below. 

Steps for debt recovery

• Pre-receivership support as mediator between the two parties
• Securing, repairing and insuring the property
• Taking possession of the property where applicable
• Property management and disposal strategy
• Diverting rental income, handling monies due and minimising financial loss
• Pursuing planning permission, Implement strategies, negotiate new leases, tenancy agreements or other actions that may
• improve the resalable value of the premises
• Arrange an efficient sale of the property
• Distribute proceeds of the sale to all relevant parties

Why is an LPA receiver appointed?

The act of appointing a receiver enables the lender to exercise a degree of control over a secured asset whilst keeping its distance from the risks and responsibilities associated with it. Examples include business rates on unoccupied commercial property, maintenance and repair obligations, licensing and regulatory requirements in relation to the management of houses of multiple occupation. The receiver will become the buffer between the lender and manage these risks.

Want to know more about receivership processes?

View our 5 things for lenders to consider when appointing an LPA receiver article and LPA receivership FAQs for more information.

Need advice or services?

Rob Kerrigan is Kempton Carr Croft’s lead LPA receiver.  View Kempton Carr Croft’s LPA receiver service here or contact us  to discuss your individual needs. 

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