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Key tips for lenders when appointing an LPA Receiver

The Law of Property Act 1925 (LPA) details the rights and responsibilities of borrowers and lenders who use real estate as collateral or loan security. The Act sets out options for lenders to take to recover the loan if the borrower fails to meet repayment obligations or breaches the term of the loan.  

If you are looking to appoint an LPA receiver, below are the key points to consider:

Expertise
When appointing an LPA receiver, it is important to establish if they have a sufficient level of expertise when dealing with a specific property type. Particularly when it comes to less common/straightforward asset classes such as leisure, hospitality or development land with section 106 restriction, which is not typically covered by most general practice surveyors.

Experience
You must ensure that your LPA receiver has experience in acting for other lenders in your geographic location. Also, experience in loan security valuations and agency is vital as it allows your receiver to formulate the most appropriate and profitable disposal strategy. Firms that have established departments in those areas tend to benefit from an additional level of expertise which is crucial to making the right commercial decisions.

Proven Track Record
Request that your receiver provides you with recent case studies and pay specific attention to the outcomes and timescales. Don't be afraid to ask for further details on each case.

Considerate Approach
The receiver not only has a duty of care to the lender, but also a residual duty of care to the borrower. The process can involve sensitive and difficult negotiations, and your appointed receiver must communicate and consider each stakeholder when proposing their recovery strategy. This approach will allow to minimise stress to the borrower and any tenants in situ whilst meeting the requirements of the lender.

If you would like to appoint an experienced LPA Receiver, please speak to our team.