TDK Commercial Property Consultants have launched a service to local funders to assist them in with their impaired property loans. This line of work for property consultants is one of the inevitable consequences of the downturn of the property market. TDK’s Strategic Consulting Department, lead by Stephen Deyermond, has significant experience in this line of work, having spent 12 months advising one of the Northern Ireland largest banks on their impaired property loans.
One of the roles is that of Fixed Charge Receiver. The appointments arise when Banks have to take action with regards to loans relating to property assets.
Where the owner is deemed insolvent and the lender wants to take control of the asset often a Receiver is appointed.
“Fixed Charge Receiver is a simpler (and usually more cost effective) route for funders to take than Administration and, depending upon the nature of the charge or status of the borrower, allows the lender to secure swift control of the asset”
Stephen went on; “The Receiver, in effect, acts as the owner of the property, typically collecting rents, arranging insurance and ultimately overseeing the disposal of the asset(s).
Whilst Receivers are typically appointed with the intention of realising the asset, we are also appointed where following insolvency the Lender believes that we could apply our property expertise to achieve better outcomes than the borrower. Examples 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.
Unlike many other insolvency appointments, a fixed charge receiver need not be a licensed insolvency practitioner and property surveyors are commonly appointed in Great Britain under the Law and Property Act 1925. In Northern Ireland similar powers apply although the relevant statute is the Conveyancing and Law of Property Act 1881.