Procedure relating to appointment of LPA or fixed charge receiver(s)
Produced in partnership with John Hughes of Shakespeare Martineau LLP
Procedure relating to appointment of LPA or fixed charge receiver(s)

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

  • Procedure relating to appointment of LPA or fixed charge receiver(s)
  • When to appoint an LPA/fixed charge receiver
  • The procedure
  • Summary

The Law of Property Act 1925 (LPA 1925) enables a mortgagee of a legal mortgage to appoint an LPA receiver. This right may alternatively (and more usually will) arise under the terms of the charge. In both cases the receiver may be referred to as a fixed charge receiver (in the latter case the receiver is not an LPA receiver, but in practice is often still referred to by this name).

When to appoint an LPA/fixed charge receiver

The appointment of an LPA/fixed charge receiver is a remedy available to the owner of a legal mortgage. In order to appoint a receiver, the mortgagor will be need to be in default.

A default arises if the mortgagor is in breach of the terms of the mortgage. The amount secured by the mortgage must have become 'due'.

The procedure

Demand

Under LPA 1925, a mortgagor shall not exercise the power of sale or the power to appoint a receiver unless:

  1. notice requiring payment of the mortgage money has been served on the mortgagee and default has been made in payment of the mortgage money for three months, or

  2. some interest under the money is in arrears and unpaid for two months, or

  3. there has been a breach of some provision contained in the mortgage deed

However, LPA 1925, s 103 is usually