Law of Property Act 1925 Receiver
A Law of Property Act 1925 Receiver (LPA Receiver) may be appointed under the terms of the Law of Property Act 1925 to take charge of a mortgaged property when the borrower is in default. The purpose of this is to take control of the property with a view to either selling it to recover the outstanding debt, or to collect rental income for the lender.
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[edit] Direct powers
Under the 1925 Act the direct powers of a LPA Receiver are:
- To demand and recover all income due on the property to which they are appointed receiver. Such recovery can be by action, distress or any other means.
- If directed to do so, to insure (and keep insured) the property against loss or fire damage. Premiums incurred can be paid from sums collected.
[edit] Delegated powers
The lender can delegate its contractual powers to the receiver under S 109(3) of the 1925 Act. This must be done in writing.
Such contractual powers are:
- The power to sell the mortgaged property on terms that the receiver sees fit.
- The power, once in the lender’s possession, to cut and sell timber after consulting with an arboriculturalist.
- The power to make leases.
[edit] Insurance
The lender can demand that all monies received in connection with insurance of the mortgaged property be applied either towards the discharge of the mortgage balance or to recoup monies, loss or damage to which the funds relate.
[edit] LPA Receiver’s remuneration
The receiver is entitled to retain from monies received up to 5% unless specified otherwise.
[edit] Application to the Court for directions
The LPA Receiver or lender can apply to the Court on matters of uncertainty relating to the appointment, powers or remuneration.
[edit] Find out more
[edit] Related articles on Designing Buildings Wiki
[edit] External references
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