So... My Landlord has gone into receivership...

The_Morrigan

Webster29 wrote: »

A receiver is appointed as agent of the landlord to manage and sell the asset. This includes collecting rents and paying outgoings - all mortgages include both powers. Expenses the receivers incur are deducted from the sale proceeds and/or added to the obligations secured. So why is a deposit treated differently if the receiver treats it as an outgoing which the principal is obliged to refund, pays it and deducts it from the sale proceeds or charges it as an expenses?

Why do we need to treat the deposit like it was handed over in a shoebox full of cash, stored under the original landlord's mattress and now we need to go find that exact pile of cash?

The deposits are prior to the appointment of the receiver and not connected to the credit documents that allow a receiver to be appointed. It just doesn't fall under their remit.

Stheno

toughapple wrote: »

You haven't seen the notice to terminate. There may well be a technical problem with it. The PRTB is very slow and wont deal with the appeal for months. A friend of mine kept her house for a year afetr a notice to terminate.

Properties in recievership are not under the remit of the PRTB

Webster29

Using that logic, the agreement to pay rent was prior to the appointment of the receiver, is outside of his remit and no tenant should ever pay over rent to the receiver. The agreement to pay rent and deposit and to return the depost are all part of the same lease or tenancy arrangement.

Can you point me to some solid authority that says that receivers get to disclaim obligations associated with the property while simultaneously demand the benefit?

The_Morrigan

Webster29 wrote: »

Using that logic, the agreement to pay rent was prior to the appointment of the receiver, is outside of his remit and no tenant should ever pay over rent to the receiver. The agreement to pay rent and deposit and to return the depost are all part of the same lease or tenancy arrangement.

Can you point me to some solid authority that says that receivers get to disclaim obligations associated with the property while simultaneously demand the benefit?

The land and conveyancing law reform act 2009; companies act (can't remember the amendment year that receivers were added, could be 90).

The property is a secured debt, the mortgage documents have explicit language with regards to arrears and defaults that allow the bank to appoint a receiver to take any steps to recover their outstandings ie the rent to pay off the bad debt. It has nothing to do with the contract between the landlord and the tenant, which if done correctly should have agency language to cover off the fact that the receiver is an agent in some respects, not all.

Webster29

I am well familiar with the 2009 - it does not address this point, other than to confirm that a "mortgagee in possession" can deduct expenses properly incurred against the proceeds of sale.

The debt is a secured debt, not the property. There is nothing stopping the appointment of a receiver over the property in the event of a default. At that point receivers are indeed entitled to pay the rent as they are entitled (and ought to) pay outgoings in the proper management of the secured asset as mortgagee in possession. The contract between the landlord and tenant is more than a contract, it is an estate or interest in land and affects the secured assets - it is not a simple question of privity of contract. Refer you back to the 2009 Act for the types of estate or interest in land, one of which is leasehold.

Webster29

Should said "entitled to collect the rent" rather than "pay the rent" but you get the gist.

runawaybishop

Webster29 wrote: »

Should said "entitled to collect the rent" rather than "pay the rent" but you get the gist.

If you edit the post within 5 minutes no one will ever know you made a mistake, except for the email notification to subscribed threads.

Glenbhoy

The_Morrigan wrote: »

Maybe so, but if the OP approaches the receiver in the same mindframe as some of their posts a quick trip to the courts would follow.
The receiver can go straight to the courts for an eviction order, they don't have to go through the PRTB.

They can go to the courts, but most judges don't look sympathetically on plaintiffs wasting their time over trivial matters such as a month or two's stay in a premises, especially if the other party has offered to negotiate. In addition, if people think the PRTB is slow, they should be aware that the wheels of justice is slower still!!!

Re the deposit issue, it's likely that an agreement can be come to by setting it off against the rent due - again, not strictly the letter of the law, but as I say, judges don't take kindly to trivial things coming before them.....

Marcusm

Webster29 wrote: »

I am well familiar with the 2009 - it does not address this point, other than to confirm that a "mortgagee in possession" can deduct expenses properly incurred against the proceeds of sale.

The debt is a secured debt, not the property. There is nothing stopping the appointment of a receiver over the property in the event of a default. At that point receivers are indeed entitled to pay the rent as they are entitled (and ought to) pay outgoings in the proper management of the secured asset as mortgagee in possession. The contract between the landlord and tenant is more than a contract, it is an estate or interest in land and affects the secured assets - it is not a simple question of privity of contract. Refer you back to the 2009 Act for the types of estate or interest in land, one of which is leasehold.

This was dealt with some time ago on the forums; assuming the mortgage charge predated the tenancy there is no creation of an interest in the land on grant of the tenancy unless it has the consent of the mortgagee (which is rarely the case) meaning that the tenant has rights enforceable against the landlord and under RTA but no formal interest in the property.

Webster29

Marcusm wrote: »

This was dealt with some time ago on the forums; assuming the mortgage charge predated the tenancy there is no creation of an interest in the land on grant of the tenancy unless it has the consent of the mortgagee (which is rarely the case) meaning that the tenant has rights enforceable against the landlord and under RTA but no formal interest in the property.

Okay, on what authority is that the case? The 2009 Act says a leasehold interest is created when there is a tenancy of land or buildings attached to land. So if there is no tenancy, the tenants sould be in small claims court rather than the PRTB, claiming not only the deposit but the return of all rent paid since the date of commencement of the tenancy (and perhaps damages for misrepresentation) and writing letters to the receiver politely informing them to get lost as they're no tenancy but they are in occupation and it'll take a court order (not a PRTB adjudication) to get them out? Good times for tenants so.

The mortgagor is in breach of the mortgage document yes as there is a contractual restriction on letting (let's assume there is) between mortgagor and mortgagee but on what basis can he, as freehold owner not create a leasehold interest?

Generally I'm playing devil's adocate here because I think because the deposits and security of having a home of individuals are too often dismissed as small fry and it needs to be challenged so as to properly reason it out based on the law.

The_Morrigan

Webster29 this is getting off topic to the OP -- maybe start another thread on the subject so a discussion can be held?

Webster29

Okay, to bring it back on topic.

OP, I have been through this process. Which is why I have given it a good deal of thought, and why I disagree with a lot of the advice that is given on this forum.

In my case, I came to an agreement with the EA who agreed let me hand in my notice (I was in a Part 4), to save the last month's rent paid to their account, refund it to me on the day I vacated (same day, electronic bank transfer) as a return of deposit and send nice clean accounts to the receiver, with a note of all rent collected and expenses incurred including return of the deposit owed to me. The receiver got vacant possession and I got my deposit back. In reality, more people should fight their corner and come to a sensible solution.

Walking away is why they get away with all sorts in private residential transactions which they do not get away with in commercial situations, so I disagree with the posts which told you to take it up with a landlord who has long left the scene or to concentrate on finding somewhere new to live.

The_Morrigan

Webster29 wrote: »

Okay, to bring it back on topic.

OP, I have been through this process. Which is why I have given it a good deal of thought, and why I disagree with a lot of the advice that is given on this forum.

In my case, I came to an agreement with the EA who agreed let me hand in my notice (I was in a Part 4), to save the last month's rent paid to their account, refund it to me on the day I vacated (same day, electronic bank transfer) as a return of deposit and send nice clean accounts to the receiver, with a note of all rent collected and expenses incurred including return of the deposit owed to me. The receiver got vacant possession and I got my deposit back. In reality, more people should fight their corner and come to a sensible solution.

Walking away is why they get away with all sorts in private residential transactions which they do not get away with in commercial situations, so I disagree with the posts which told you to take it up with a landlord who has long left the scene or to concentrate on finding somewhere new to live.

Webster, you may disagree, but unfortunately that is the law as it stands.
If the receiver is stone walling any discussion on the return of the deposit, then the only legal avenue is to chase the landlord.

We cannot encourage or advocate any behaviour here that breaches the law, it is against the charter and the site rules.

Claw Hammer

The_Morrigan wrote: »

Maybe so, but if the OP approaches the receiver in the same mindframe as some of their posts a quick trip to the courts would follow.
The receiver can go straight to the courts for an eviction order, they don't have to go through the PRTB.

The receiver can't go to straight to the courts.

RESIDENTIAL TENANCIES ACT 2004

182.—(1) On and from the commencement of Part 6, proceedings may not be instituted in any court in respect of a dispute that may be referred to the Board for resolution under that Part unless one or more of the following reliefs is being claimed in the proceedings—

(a) damages of an amount of more than €20,000,

(b) recovery of arrears of rent or other charges, or both, due under a tenancy of an amount, or an aggregate amount, of more than €60,000 or such lesser amount as would be applicable in the circumstances concerned by virtue of section 115 (3)(b) or (c)(ii).

(2) In this section “dispute” has the same meaning as it has in Part 6.

The_Morrigan

Claw Hammer wrote: »

The receiver can't go to straight to the courts.

RESIDENTIAL TENANCIES ACT 2004

182.—(1) On and from the commencement of Part 6, proceedings may not be instituted in any court in respect of a dispute that may be referred to the Board for resolution under that Part unless one or more of the following reliefs is being claimed in the proceedings—

(a) damages of an amount of more than €20,000,

(b) recovery of arrears of rent or other charges, or both, due under a tenancy of an amount, or an aggregate amount, of more than €60,000 or such lesser amount as would be applicable in the circumstances concerned by virtue of section 115 (3)(b) or (c)(ii).

(2) In this section “dispute” has the same meaning as it has in Part 6.

The receiver isn't governed by the RTA.

FrStone

The_Morrigan wrote: »

Webster, you may disagree, but unfortunately that is the law as it stands.
If the receiver is stone walling any discussion on the return of the deposit, then the only legal avenue is to chase the landlord.

We cannot encourage or advocate any behaviour here that breaches the law, it is against the charter and the site rules.

I don't think that what Webster is saying is incorrect or illegal though. My understanding of the Companies Act is that existing contracts do remain binding on the Receiver unless they are particularly onerous (which I don't believe a deposit would be).

I am not a solicitor but I would be advising that the OP pushes for the return of his deposit. It doesn't matter that it was the Landlord who was originally paid as a Receiver is appointed to manage the asset on behalf of the Landlord and recover the Debt owed to the creditors (I presume in this case the bank).

gaius c

The_Morrigan wrote: »

This isn't a tenancy law issue though, receivers are appointed because of bad debt. Would you like tenants to get rights to stop the banks appointing receivers?

Doesn't apply in this specific example but there have been threads on this forum highlighting that even a fixed term lease is no protection when a landlord goes into receivership.

It's not unreasonable that tenants should receive the same legal protection in landlord receivership that they would if the landlord was not in receivership. That means the right to see out their fixed term lease or be able to negotiate an alternative arrangement. They should also have their part IV rights, especially regarding notice periods. It's not reasonable that a family might have to move out in considerably shorter time than the defined notice periods just because their landlord has failed to keep up with payments.

Considering that the law is bending over backwards to keep mortgage payers in accommodation they are not paying for, the complete black hole that tenants fall into when the landlord goes bust is a travesty.

Claw Hammer

The_Morrigan wrote: »

The receiver isn't governed by the RTA.

The receiver is indeed governed by the RTA. Once the tenancy has come under the RTA at any time, it can only be terminated in the manner set out in the Act. All disputes must be dealt with in the manner set out in the Act
receivers have been getting away with not returning deposits on the basis that they are agents of the landlord and was therefore the landlord must return the deposit. This, I legally questionable, is allowed to go on for the moment, determination of the tenancy by a receiver must be done in the same way as termination of the tenancy by the landlord.

Claw Hammer

FrStone wrote: »

I don't think that what Webster is saying is incorrect or illegal though. My understanding of the Companies Act is that existing contracts do remain binding on the Receiver unless they are particularly onerous (which I don't believe a deposit would be).

I am not a solicitor but I would be advising that the OP pushes for the return of his deposit. It doesn't matter that it was the Landlord who was originally paid as a Receiver is appointed to manage the asset on behalf of the Landlord and recover the Debt owed to the creditors (I presume in this case the bank).

A receiver is generally appointed on foot of the deed of mortgage and his powers and actions have nothing to do with the Companies Act (unless the landlord is in fact a company). A tenant or tenants will have to force the issue of the behaviour of receivers through the courts.