Q&As

A local planning authority (LPA) receiver is offering a property for sale in an auction. The LPA receiver has received an offer 30% above the guide price. Is the LPA receiver required to accept the offer pre-auction?

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Published on LexisPSL on 25/02/2019

The following Restructuring & Insolvency Q&A provides comprehensive and up to date legal information covering:

  • A local planning authority (LPA) receiver is offering a property for sale in an auction. The LPA receiver has received an offer 30% above the guide price. Is the LPA receiver required to accept the offer pre-auction?
  • Duty of the receiver
  • Acceptance of the offer

Duty of the receiver

The equitable duty owed by a receiver to a mortgagor when selling a property is the same as that owed by the mortgagee to a mortgagor (see Silven Properties Limited v Royal Bank of Scotland). When exercising power of sale over mortgaged property, a mortgagee is under a general duty to take reasonable care to obtain the true market value of the mortgaged property at the time they choose to sell it (see Cuckmere Brick Co Ltd v Mutual Finance Ltd). The phrase ‘true market value’ is synonymous with ‘the best price reasonably obtainable' and ‘a proper price’. For further information, see Practice Note: Best price reasonably ob

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