Fixed charge receiver opinion piece

With current property market conditions, banks working with their customers, are concentrating on adding value to property assets as well as looking to realise value to repay debt. Assets should be managed in such a way that when a market materialises for the asset, the property is in a position to maximise marketability and value.

However, one of the inevitable symptoms of the current property market and banking conditions is the appointment of Fixed Charge Receiver by Banks. The appointments arise when Banks have to take action when the owner is deemed insolvent or the lender wants to take control of the property assets. Increasingly Banks are seeing the benefits of appointing Chartered Surveyors as Receivers. Unlike many other insolvency appointments, a fixed charge receiver need not be a licensed insolvency practitioner and surveyors are commonly appointed under the Conveyancing and Law of Property Act 1881.

Fixed Charge Receiver is also a simpler (and usually more cost effective) route for funders to take than Administration Whilst Receivers are typically appointed with the intention of realising the asset, they are also appointed where, following insolvency, the Lender believes that we could apply our property expertise to achieve better outcomes than the borrower. The Receiver, in effect, acts as the owner of the property; include co-ordinating the letting of vacant units, achieving planning consents or project management of the development process.

In broad terms, our principal duty is to secure repayment of the mortgage/charge due to the bank. We also have a duty of care to the borrower to manage the property with Due Diligence. The Fixed Charge Receiver role is part of a Strategic Consulting Service that TDK provide funders and owners of distressed property assets.

Our service would combine some or more of the following:

Advise on underperforming or distressed property loans
Develop business plans and execute realisation strategies
Project management developments
Take appointments as Fixed Charge Receivers
Support insolvency practitioners in administrations
Whilst Fixed Charge Receivership is an unavoidable consequence of the downturn in the property market it does provide an opportunity for suitably qualified surveyors to provide a strategic service to Banks.