People who understand what the law Property Act 1925 is will recognize the LPA receiver once appointed have the authority to take control of the assets. There are fundamental differences between how an LPA receiver repossesses and how the bank will take you to court to repossess the property. So what is this difference?
So the fundamental difference between the home repossession and LPA receivers is that home is considered to be a regulated property. There’s certain legislation around by the government relation to mortgage, which gives the homeowner more rights. If the bank decides to proceed with repossessing the property, they have to go through more of a rigorous process of showing that they’ve done what they can to help the homeowner to keep the property.
What does that entail?
So they have to have a discussion with the homeowner to see whether there’s a way to find a solution if they’re in arrears, potentially come up with a payment plan, or come up with a way of giving them some time if they’ve become unemployed or lost their job. So there’s a slightly longer process which can be three to six months before the bank starts taking action against you. Whereas with LPA receivers, that’s only applicable to BTL properties or bridging loans where somebody’s failed to pay back the loan, the receivers have very little legislation around any protection for the owner of the property, and the LPA receivers can pretty much take the property over within 7 to 14 days from the bank appointing them.
So to summarize, LPA receivers normally take over commercial assets, such as shops or a warehouse, etc.).
The contract for the homeowner and the buy to let property owner somewhat similar because they’re both done based upon our premise of lending money. But the only difference is that something called the Law of Property Act 1925 that’s actually in the contracts for the commercial assets because they’re considered to be commercial assets, so people have got them or the borrower has taken them on for a commercial purpose. There’s very little leniency for any sort of miss payments, arrears, defaults or anything that breaks the terms in the contract.
The receivers have a lot more powers in terms of power of sale and the power to collect rent. So those are the major differences between the two. It is important that if you are in a situation of either of the two that you contact us at Immediate Bank Claims as we specialize in both scenarios and we always provide a service which is to the satisfaction of our clients. So call us, never fear IBC is here!