Q&As

An LPA/fixed charge receiver has agreed to sell some agricultural land to the proposed purchaser, who has been granted a license to occupy the property until completion for the purpose of separating the land from adjoining premises. What are the powers and duties of an LPA reciever?

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Published on LexisPSL on 05/10/2016

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

  • An LPA/fixed charge receiver has agreed to sell some agricultural land to the proposed purchaser, who has been granted a license to occupy the property until completion for the purpose of separating the land from adjoining premises. What are the powers and duties of an LPA reciever?
  • Case study
  • The powers of an LPA receiver
  • The duties of an LPA receiver
  • The exercise of an LPA receiver’s powers

In answering this Q&A we have limited our research to cover the position under English law. In conducting our research we have focussed on the duties of LPA/fixed charge receivers.

Case study

The purchaser is concerned that after completion, the receiver will walk away leaving him to deal with an aggressive borrower—does the proposed purchaser have any remedies, including, for example, can the proposed purchaser insist:

  1. that the receiver pursues criminal proceedings against the borrower?

  2. on an injunction against the borrower?

  3. that the receiver deals with the aggressive borrower?

The powers of an LPA receiver

Section 101(1) of the Law of Property Act 1925 (LPA 1925) contains the ability for a mortgagee to appoint a receiver, who will be responsible for collecting income and protecting property over which they have been appointed. The right to appoint a receiver under LPA 1925 arises when the mortgage monies become due (LPA 1925, s 101(3)).

The statutory powers conferred on the receiver are set out in LPA 1925, s 109. These statutory powers are limited, so most legal mortgages extend the powers of the receiver under LPA 1925, s 101(3) (Sheppard & Cooper v TSB Bank). A well-drafted mortgage will seek to enlarge the scope of the receiver's powers to allow him to do virtually everything that his appointor could do as mortgagee in possession. The purpose of granting such express powers

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