When Would a Law of Property (LPA) Act Receiver be Appointed


A Law of Property Act Receiver (LPA Receiver) is appointed by a lender who has a fixed charge over property under the statutory power given to that lender in section 109 of the Law of Property Act 1925.


Such an appointment of a Law of Property Act (LPA) Receiver may only take place if:-


1. the mortgage money has become due, and


2. the mortgagee has become entitled to exercise the statutory power of sale, where:-


2.1 there has been default in repayment of a loan for 3 months after a notice requiring it, or


2.2 Interest remains unpaid for 2 months after becoming due, or


2.3 there is another breach of the Act.


A Law of Property Act (LPA) Receivers powers are limited to collecting rents and income, however the Law of Property Act Receiver does have a duty to keep property in good repair and to insure the property.  However is most modern charge documents the LPA Receiver's powers have been significantly extended to allow the Receiver to sell the property, develop the property and improve its value, if necessary.


There is an interesting case on the above which is known as Chatsworth Properties Ltd v Effiom which you can read by following the link.


Obtain a copy of the Law of Property Act 1925 to fully understand when a Law of Property Act (LPA) Receiver may be appointed.


Chris Parkman regulary acts as a LPA Receiver and if you are a lender whose charge is in default and you would like to enforce your security so that the borrowing can be repaid, please contact Chris to discuss the situation by email, chris@purnells.co.uk, or by telephone, 01326 340 579.