Q&As

Can a Law of Property Act receiver serve a section 42 notice for a lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, and then assign the benefit of that notice to a purchaser?

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Published on LexisPSL on 05/04/2019

The following Property Disputes Q&A provides comprehensive and up to date legal information covering:

  • Can a Law of Property Act receiver serve a section 42 notice for a lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, and then assign the benefit of that notice to a purchaser?
  • Can the LPA receivers assign the benefit of the section 42 notice to a purchaser?

Can a Law of Property Act receiver serve a section 42 notice for a lease extension under the Leasehold Reform, Housing and Urban Development Act 1993, and then assign the benefit of that notice to a purchaser?

This Q&A addresses whether a Law of Property Act (LPA) receiver is entitled to serve a section 42 notice for a lease extension, and to then assign the benefit of that notice to a purchaser.

Under section 109 of the Law of Property Act 1925, the LPA/fixed charge receiver is:

  1. deemed to be agent of the mortgagor (not the mortgagee), and

  2. has the power to exercise any powers which may have been delegated to them by the mortgagee (ie under the mortgagee’s statutory power or powers under the mortgage)

For further reading, see:

  1. Practice Note: Effect of appointment of LPA or fixed charge receiver on property

  2. Commentary: Powers of receiver: Fisher and Lightwood's Law of Mortgage [28.10]

  3. Commentary: Right to appoint receivers over mortgaged property: Property Insolvency [10.64]

Accordingly, there may be scope for considering whether the provisions of the mortgage or facility agreement:

  1. provides the mortgagee with sufficient rights and powers to serve a section 42 notice for and on behalf of the tenant (assuming the tenant fulfills the criteria under section 39(1) of the Leasehold Reform, Housing and Urban Development Act 1993 (LRHUDA 1993)), and

  2. delegates those powers to

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