What are an LPA Receiver’s powers when appointed?
If the claim for possession had been brought by the Client, the Court would adjourn or dismiss the claim if the arrears are paid in full or suspend any order for possession on terms if the arrears are to be paid by installments. The LPA Receiver is not, however, the borrower despite acting as the agent of the borrower. He is deemed to be the agent of the mortgagor and the statutory protections referred to above only apply to proceedings brought by a mortgagee. The Court has no power under those provisions to adjourn or suspend the possession proceedings brought by an LPA Receiver. The LPA Receiver can therefore take possession of the property and sell it in the borrower’s name even if the arrears have been paid in full. Although the LPA Receiver owes the mortgagor a fiduciary duty of care on sale to obtain the best price reasonably obtainable, this may be of little comfort to the borrower who wishes to keep his property. We do it all!
Example case studies:
That was actually probably one of the toughest cases we had because all four brothers are signing from different, completely different sheets. They borrowed some money from an ultra-high net worth lender, a family friend of theirs. The lender decided after a while of no payments to instruct LPA Receivers. So this lender put LPA receivers on them because they kept on defaulting on their payments and not paying anything because the guy didn’t get the money.
It was a very complicated case, and the 90% of my time in that case has nothing to do with the case. It’s actually just trying to get the three four brothers to agree what they wanted to do because they weren’t too sure whether they wanted to take our services or not.
Number one, number two, they hardly had any information. Number three, they’re up against time and told them what to do, but they wouldn’t really follow instructions. Number four is a commercial shop with residential flats above, but some of it became regulated because they had family that members living in one or two of them. Thirdly, this is ridiculous, actually, but they’ve done a lot of work on the property without getting Council approval!
There was also an issue when it comes to a survey. So we had pretty much every single issue that you can think of. Long story short, this ultra-high net worth individual managed to put LPA receivers on the property, even though we were able to actually assist them on how to dis-instruct them. They didn’t follow our instructions.
So cut a long story short, we managed to get in and change the locks back, get rid of the security and save £20,000 of the debt and agreed that with the lender managed to get a surveyor in who was happy to sort of still comply with doing a survey, even though we could probably say I wouldn’t have said anything. Lender wants to lend on it, so we were able to agree with the main firm today on our terms to actually get the bridge sorted.