How does the LPA work?

The concept of a receiver is one of the oldest remedies in English law dating back to the sixteenth century and essentially the core concept has not changed over time - namely safeguarding property for the benefit of whoever is entitled to it.

In many areas of their commercial and consumer business, lenders will lend money and take a charge or mortgage over an asset; often a property but also many other assets such as plant and machinery. The mortgage or charge will invariably contain the right for the lender to appoint a receiver to receive income such as rent generated by the asset in the event of the borrower defaulting on payment

The appointment of a receiver is a very attractive alternative to remedies such as re-possession and is proving increasingly popular to lenders.

The advantages include:

• Giving the lender direct control over the income from the property e.g. rent from a buy-to-let
• Placing someone professional and experienced between borrower and lender at a time when that relationship has inevitably become strained
• Not bringing that relationship to an end but allowing it to repair
• Avoiding crystallizing a loss for both the lender and the borrower
• Ensuring that the asset is properly managed and maintained
• Let us talk to you in more detail about what we can do