What is it?
Law of Property Act Receivership is used where a lender appoints a Law of Property Act Receiver (‘LPA Receiver’) under the provisions of a charge over a specific property asset. The receiver will be either an insolvency practitioner or chartered surveyor. His general powers are set out in the Law of Property Act 1925. However, he may be granted additional specific powers in the charge documentation.
Who is Law of Property Act Receivership for?
It is used in situations where the lender’s primary, if not only, asset is a property asset.
How can Chamberlain & Co help?
The company or fixed charge security holder will need to instruct an insolvency practitioner such as Chamberlain & Co to advise upon the most appropriate course of action. If LPA Receivership is the chosen option a licensed insolvency practitioner from Chamberlain & Co can be appointed as the LPA Receiver.
The LPA Receiver will seek to sell the property to repay the lender. If an ongoing business is intrinsic to maximising the realisations from this property asset, assuming he has the necessary powers, the receiver will seek to maintain this business as a going concern during the sales process.
Advantages of Law of Property Act Receivership
- Costs are minimised as the appointee’s responsibility is solely to deal with the property asset rather than all facets of the business.
- The security document may not give the LPA Receiver the power to trade any intrinsic business and as this power is not contained in the Law of Property Act it may not be possible to maintain any ongoing business to maximise the value of the property.