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