Difference between a sale by a fixed charge receiver and a solvent sale
Difference between a sale by a fixed charge receiver and a solvent sale

The following Restructuring & Insolvency guidance note provides comprehensive and up to date legal information covering:

  • Difference between a sale by a fixed charge receiver and a solvent sale
  • Sales information pack and pre-contract enquiries
  • Documentation
  • Agreement for sale
  • Buyers approach

Where the a fixed charge receiver is acting on behalf of the seller in selling a property, the receiver's underlying objective is to have a 'clean deal'—that is, following completion, both the receiver and the appointing mortgagee will know exactly what sum is payable to the mortgagee net of sale costs and expenses, and that there will be no claims following completion against:

  1. the receiver (and the mortgagee if the mortgagee is transferring the property (see Practice Note: Overreaching by a mortgagee) or

  2. the net sale proceeds payable to the mortgagee

This objective is achieved by moving risk to the buyer and excluding personal liability of the receiver.

Sales information pack and pre-contract enquiries

It is important for the buyer to understand that as the receiver is not the owner of the property and the receiver’s appointment to the property may have been very recent; the receiver will have very limited information on the property.

The receiver's position is particularly difficult in cases where the property is let and the property has been managed by the mortgagor itself or by managing agents. In practice receivers may be able to obtain useful information both from managing agents, if there are any, or from tenants. Despite this they are unlikely to be able to obtain as much information as a buyer might expect to