Fixed Charge Receiverships

Fixed Charge Receiverships are partner led by Jim Stafford and Tom Murray. We have developed a strong reputation for taking charge of bank assets and meeting the bank’s wishes as to whether the property should be placed on the market immediately, or leased to tenants until the market improves.

We adopt a 5 stage strategy for dealing with fixed charge receiverships:

  1. Stabilisation of the asset
  2. Determining the appropriate strategy
  3. Managing the asset
  4. Disposing of the asset
  5. Handover of the proceeds to Bank

The primary function of an asset receiver is to realise the asset, collect rent and assuming that the mortgage deed incorporates the power of sale, to ultimately sell the mortgaged property. The clear advantage to a charge holder in appointing an asset receiver is that the receiver and not the charge holder assumes the onerous responsibilities of landlord etc.

Generally a mortgage deed will incorporate a specific power to appoint a receiver, however in the absence of such a power there is provision under the Land and Conveyancing Law Reform Act 2009 which affords a mortgagee the statutory power to appoint a receiver over the income of a mortgaged property.

A receiver appointed under statutory power is an agent for the borrower. However, his primary function is to realise the assets charged for the benefit of the mortgagee. A receiver appointed under statutory power can demand and recover any rent due on the property over which he is appointed receiver. In certain cases where a borrower has granted a lease, the charge holder is not bound to the terms of lease even though rent may have been paid to the receiver and the charge holder may terminate the lease at any time.
In most cases of receivership over personal assets, the charge does not extend to cover chattels and in certain instances rent receivable may have to be apportioned between the property and chattels.

With all asset receiverships there are common problems encountered which can significantly impact on the net realisable values obtainable by the mortgagee. Typically lack of cooperation from the borrower can make it difficult to build a profile of the property including its VAT history, potential charges to CGT, rental roll, lease terms and documentation, financial contributions, local authority rates outstanding, certification costs, and duress payments necessary to bring the property to a saleable condition. Add to the above listing the lack of a functioning management company in an apartment development and with potential buyers and their advisors required to meet ever more stringent conditions when drawing finance for any property, the task of an asset receiver becomes more difficult. Despite the difficulties which can be encountered the appointment of a receiver by a mortgagee is often the optimum remedy to take control of a secured asset.

For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or or