Effect of appointment of LPA or fixed charge receiver on property
Produced in partnership with John Hughes of Shakespeare Martineau LLP
Effect of appointment of LPA or fixed charge receiver on property

The following Restructuring & Insolvency practice note Produced in partnership with John Hughes of Shakespeare Martineau LLP provides comprehensive and up to date legal information covering:

  • Effect of appointment of LPA or fixed charge receiver on property
  • Impact of appointment
  • LPA/fixed charge receiver as agent of the mortgagor
  • Where the mortgagor is lessor
  • Where the mortgagor is lessee
  • Building developments
  • Rates
  • Health, environmental and other statutory obligations

Impact of appointment

The effect of the appointment of an LPA/fixed charge receiver is very different from that of an appointment of an administrator, liquidator or trustee in bankruptcy.

The appointment of an LPA/fixed charge receiver is a remedy of a mortgagee. It is not an insolvency procedure and does not necessarily mean that the mortgagor is insolvent. Depending on the terms of the lease, remedies, such as forfeiture, that are available to landlords/lessors when a lessee becomes subject to insolvency procedures may not be triggered by the appointment of an LPA/fixed charge receiver. However, the appointment does have an effect on property, albeit less drastic than where insolvency procedures are being taken.

The main impact of the appointment of an LPA/fixed charge receiver is on the role of the mortgagor of the property.

LPA/fixed charge receiver as agent of the mortgagor

The LPA/fixed charge receiver is deemed to be agent of the mortgagor (not the mortgagee) and therefore can exercise all the powers that the mortgagor has in respect of the property owned by the mortgagor subject to the charge.

The agency is terminated by the appointment of a trustee in bankruptcy or liquidator. For further information, see Practice Note: Effect of bankruptcy or liquidation on the position of receiver as agent of the mortgagor.

The LPA/fixed charge receiver is sometimes granted a power of attorney under the terms of

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