LPA receivers appointed by the bank?
The name LPA Receiver is the shortened version of “Law of Property Act 1925 Receiver”. In Ireland they are known as Fixed Charge Receivers (FCR). The LPA Receiver is a person (or company) who is appointed to take charge of a mortgaged property when the borrower has defaulted. The main aim is to either sell the property or to collect a rental income for the lender. They are commonly used when property developers fail when their borrowings will largely be secured on specific properties.
LPA Receivers powers are limited
The only direct powers that the LPA Receiver has under Section 109 of the Law and Property Act 1925 are:-
- To demand and recover all income due (including rent) on the property that they are appointed receiver on. This can be recovered by action, distress or any other means needs. They are required to provide valid receipts for income (or other) taken.
- If directed by the mortgage lender the receiver can insure and keep insured against loss or damage by fire. This can be taken by from money received by the receiver and can be used against anything compromised in the mortgage.
LPA receivers has delegated Powers
If desired the lender can also delegate its contractual powers to the receiver; this is under section 109(3) of the Law and Property Act 1925. If the lender wishes to delegate its contractual powers this must be done in writing. The contractual powers generally are:-
- The power to sell the mortgaged property on such terms as the receiver sees fit
- When the lender is in possession of a property it has the power to cut and sell timber and other trees after consulting with a qualified arboricultarist.
- The power to make leases
LPA receivers – Contractual Powers
An LPA Receiver’s powers are limited to section 109 and 109(3) of the Law and Property Act 1925.
Application to court for directions
The LPA Receiver or mortgage lender may apply to the court on matters of uncertainty about the appointment, powers or remuneration of the receiver.
Application of insurance money
The lender can require that all monies received in connection with insurance of the mortgaged property be applied as follows:-
- Towards the discharge of the mortgage money owed.
- To recoup monies, loss or damage to which the funds are for.
LPA Receiver – Remuneration
The receiver is entitled to retain out of any monies received (after discounting costs) a rate not exceeding 5% unless specified otherwise. If an application to the court has been made, they can also specify the rate of remuneration dependent on the individual case.
Have your lenders just decided that they want the funds back for no reason at all?
If you would like any further information regarding your rights when up against a LPA Receiver (Fixed Charge Receiver – FCR), or are being threatened with one please get in touch. book an appointment (links to vcita)
Rescue My Properties has extensive experience of helping landlords with buy to let portfolios deal with LPA receiver problems.
LPA receivers or Fixed Charge receivers (FCR) problem? – Want a free consultation?
Rescue My Properties have created a total solution to any repossession or LPA receiver issue and can give you a free no obligation one to one consultation. book an appointment (links to vcita) Or you can contact us on 207 221 6536 to book an appointment with our Dis-instruction of LPA receivers team.
LPA receivers (Fixed Charge Receivers) in the press:
14 May 2014 LandlordZone
http://www.landlordzone.co.uk/news/do-lpa-receivers-breach-landlord-rights (link address)