Property Receivership

Property Receivership

There are a number of points that are misunderstood in relation to property receiverships.  It is important to understand that the receiver acts as agent for the borrower.  The receiver’s duties are to the lender who appoints the receiver however the receiver has a responsibility to the borrower to act in good faith.  Generally, property receivers will not carry on a trading business.

In order to pursue the best outcome, the receiver will not necessarily proceed to an immediate disposal.  The receiver will generally have broad powers to manage the property as agent for the borrower, collect any rental income due, (which will be held in a receivership account), carry out repairs, insure, and arrange a letting or sale if the receiver considers that it is the optimum way of repaying all or part of the debt.  Ultimately, the receiver will return any surplus that exists following the discharge of debt and costs, to the borrower.

A property receiver may be removed or replaced by the lender at any time and indeed the receiver may resign.  Equally, a borrower can repay the loan along with any costs incurred.  In such a case, the receiver should be kept up to date of any intention to settle as this could affect any sale that may be in hand.

Property receiverships will no doubt become the most popular procedure for realising secured debt on real property.  The ideal property receiver is an experienced Chartered Surveyor with a breath of knowledge covering the legal aspects of receiverships, taxation, property management and disposals.

What is a property receiver?
A property receiver is a receiver appointed by a lender over a property, rather than a business, where the mortgage has gone into default.

Such an appointment is a relatively cost effective and straight forward option.  It is open to lenders under legislation and the mortgage deed.

A property receiver is not required to be licensed and chartered surveyors are increasingly appointed in this capacity in Ireland.  Such appointments have been common place in the UK for many years.

A property receiver can also be referred to as a Fixed Charge Receiver.  This title highlights the fact that they are appointed over fixed assets only.

Why appoint Declan Noonan & Associates as a property receiver?
An experienced  surveyor is the best qualified as they have the necessary specialised skills and the experience to ensure maximum return and minimal loss. Our vast experience and skill ranges from surveying to engineering and beyond, means we are best placed to act as a receiver.

Who appoints a property receiver?
The lender appoints a property receiver over the mortgaged property.  NAMA may appoint a statutory receiver and such a receiver is not bound by normal restrictions.

What legislation covers property receivership?
The relevant legislation is within the Conveyancing Act 1881, and the Land and Conveyancing law Reform Act 2009. NAMA has the powers to appoint a statutory receiver under the National Asset Management Agency Act 2009.  There are wide spread powers under this NAMA Act.

What are the powers of the property receiver?
These are usually set out in the mortgage deed under which the receiver is appointed.  Generally a property receiver has the power to manage the property, collect rent and arrange a sale.

What are the responsibilities of the property receiver?
The primary duty of a property receiver is to the lender who makes the appointment.  He also has a duty of care to the borrower, any guarantor of the debt and any secured lender.  The receiver must act in good faith, take reasonable precautions and exercise due diligence in the sale process.

The property receiver does not have to immediately sell the asset.  The duty of the property receiver is to ensure that the debt is serviced, interest is paid, and to endeavor to see repayment of the debt.  An effective property receiver does considerably more than collect rent and manage the property.  He actively enhances the property where possible.

What will Declan Noonan & Associates do as a property receiver?
Firstly, we will control of the property asset and secure it.  Subsequently, our property experts will advise on the best work-out solution.  We will actively manage the asset, collect rent, and deal with tenants, rent reviews, repairs, insurance cover and the maintenance programme.  When it is financially most advantageous, we will arrange a sale of the asset.

Why are Declan Noonan & Associates good value for money?
Appointing Declan Noonan & Associates as a property receiver means that your property assets are managed by property experts. We do not sub-contract out work to third parties, thus you can avoid the cost of another service provider becoming involved. You are also guaranteed a top quality service with a single point or responsibility for everything relating to your property asset.

Contact Declan Noonan & Associates to discuss your property management needs.