LPA Receiverships - Case Law Update

The Insolvency Service has released statistics for the numbers of insolvency procedures being entered into for the fourth quarter of 2012. It is interesting to note that whilst other insolvency procedures continue to fluctuate in their popularity, the number of receiverships has remained fairly static. Indeed in the fourth quarter of 2012, there were 276 receivership appointments, as compared with 333 and 277 in the previous two quarters (including both administrative receivers and other fixed charge receiver appointments, for example under the Law of Property Act 1925).

Under common law and statute, the primary duty of an LPA receiver is to receive income from the property and use the same to discharge the debt owed by the borrower. However, under the express terms of almost every charge this duty is modified and supplemented by a very wide range of powers far beyond the right to simply “receive income”. There are, therefore, significant additional duties which appointment