Fixed Charge Receiver and Management Companies and owners

Lantus

What is the legal interplay between these three entities? How does a rent receiver ensure they have access to the property say in terms of common area access in apartment blocks and the unit owner still remain liable to pay management fee's? See below from a website which summarises the responsibilities. If the management company are undertaking upgrade works say to the common entrance and need to provide new door codes or keys then do they issue this to the unit owner or rent receiver? If there are outstanding service fee's needing to be paid prior to such services being provided then who pays these?

There would seem to be a contradiction where the unit owner has no rights in terms of property management but non payment of service fees could severely limit or curtail property management services and it is the unit owner not the rent receiver who is responsible for this?

Or would a rent receiver just get this paid to ensure they can ensure access? Could a rent receiver insist that the keys be issued to them if they pay the service fee on their behalf? As the unit owner has no right of access it would seem to make sense but.......


"The Fixed Charge receiver's powers to act are set out firstly in the LPA but more specifically in the mortgage deed. Once appointed the receiver stands in the shoes of the borrower and is described as acting as agent for the borrower. This is not to be confused with an estate agent or similar. By agent we mean acting in loco parentis. Once an appointment has been made the borrower no longer has any rights to act he cannot collect rents or issue valid receipts, he cannot sell or let the property and he has no rights in terms of the management of the property. He has no right to enter the building indeed he has no rights to interfere in the management of the asset in any way. The receiver on the other hand has the power to collect rents, enter into leases, enter into contracts for sale or indeed any other relevant contract pertaining to the management of the building. However whilst appointed by the lender and acting for the bank the receiver still owes a duty of care to the borrower and is treated in law as the borrower’s representative. Finally it is important to remember that the borrower remains the legal owner of the property and therefore responsible for all costs and liabilities not the receiver and more importantly not the bank. The most obvious of these is empty rates. An LPA receiver also has a number of legal responsibilities which we will touch on shortly."

Pro Hoc Vice

The piece quoted seems to be UK I assume the LPA is the Law of Property Act 1925 http://www.legislation.gov.uk/ukpga/Geo5/15-16/20

You would really need to look at irish law on the issue.

odds_on

Although not a legal eagle, if it is a UK quote, there being no source given, it seems to be the same as irish law, as I understand it.

A receiver is appointed and acts as an agent of the landlord and not a landlord. He receives any rent and has full control of how the property is managed. However, the owner/landlord is responsible for the maintenance of the property and its contents (except for a tenant's contents).

Thus, if a washing machine, for example, requires repairing, it is the owner/landlord's responsibility. This seems a bit stupid, IMHO, as he has basically had his property taken from him, he receives no income from it, he is probably exceptionally low on funds (hence the mortgage company has appointed a receiver) and he is still expected to pay for any repairs. He is also liable for the tenant's deposit to be returned at the end of the lease.

However, I understand that in certain cases, a receiver may pay for certain repairs under certain circumstances. The receiver is probably better off, in the short term, having a tenant paying rent than a vacant property.

Edit: The Irish Banking Federation has produced a publication, downloadable, A residential tenant's Guide to Receivership. - Google it!

Lantus

didn't spot UK ref! The conveyancing act 1881 would be the primary legislation. While very similar it does seem to indicate that the rates are payable by the appointed receiver which is different to UK law.

(8.) The receiver shall apply all money received by him as follows (namely):
(i.) In discharge of all rents, taxes, rates, and outgoings whatever affecting the mortgaged property

Pro Hoc Vice

Lantus wrote: »

didn't spot UK ref! The conveyancing act 1881 would be the primary legislation. While very similar it does seem to indicate that the rates are payable by the appointed receiver which is different to UK law.

(8.) The receiver shall apply all money received by him as follows (namely):
(i.) In discharge of all rents, taxes, rates, and outgoings whatever affecting the mortgaged property

The 1881 Act has been amended http://www.irishstatutebook.ie/2009/en/act/pub/0027/sec0108.html#sec108

Also I'm not sure if the following Act has any effect http://www.irishstatutebook.ie/2011/en/act/pub/0002/index.html

Lantus

infosys wrote: »

The 1881 Act has been amended http://www.irishstatutebook.ie/2009/en/act/pub/0027/sec0108.html#sec108

Also I'm not sure if the following Act has any effect http://www.irishstatutebook.ie/2011/en/act/pub/0002/index.html

As far as I can see the reform act 2009 has the same provisions for receivers to pay all other bills associated with a property to ensure it is maintained.