What Are The Responsibilities of a Receiver of a Residential Property

squire23

Without providing too much personal detail, I have finally managed to have the ownership of a property transferred to me. Unfortunately my ex has let the house fall into receivership over the last number of years.

I finally gained access to the house yesterday despite the receiver not wanting to provide me with any access. The house is in an incredibly bad condition inside, rubbish everywhere, broken white goods, boiler has been stripped for parts, damp in the bathrooms etc. It is in no way in a fit state to rent it out.

All of the problems can of course be fixed but it raises a question about what the Receiver was doing to get the house rented out again and stop accruing further debt. What are the Receiver's responsibilities in this regard? Can anyone advise?

Much appreciated.
squire

Pat Mustard

Mod note:

This thread can stay open for the time being, as long as no legal advice is given. Discussion must be restricted to duties of receivers only, with no reference to the specific details given. No discussion of liability, please.

P. Breathnach

Pat Mustard wrote: »

Mod note:

This thread can stay open for the time being, as long as no legal advice is given. Discussion must be restricted to duties of receivers only, with no reference to the specific details given. No discussion of liability, please.

Please don't keep your finger too close to the "lock" button. There is a good topic here.

I am generally curious, and a bit concerned, about the responsibilities of receivers. I have formed the impression that their obligation to interested parties other than the creditor(s) who had them appointed is limited.

Marcusm

Receivers in a property context are generally appointed under the terms of the loan agreement as opposed to a court appointed receiver. The loan agreement will generally provide for the lender or security holder to have the power to appoint a receiver who becomes an agent of the borrower taking on its powers but not necessarily its responsibilities with respect to the asset.

Generally a receiver is expected to exercise all reasonable care to safeguard and deliver up the value of the assets.

It's unclear ere how the OP has obtained access to the property, has he bought it out from the receivership or is it just through persistence. If a receiver is negligent in its dealings in the asset, it might likely become personally liable.

However, just because a property has become damaged does not mean that the receiver has not exercised reasonable care - it might, for example, be the case that the costs of safeguarding the asset exceeded the likely cost of damage.

P. Breathnach

Marcusm wrote: »

Receivers in a property context are generally appointed under the terms of the loan agreement as opposed to a court appointed receiver. The loan agreement will generally provide for the lender or security holder to have the power to appoint a receiver who becomes an agent of the borrower taking on its powers but not necessarily its responsibilities with respect to the asset....

That last bit touches on my interest in the question.

Suppose I were a contractor who had carried out work on a property (for example, supplying and fitting a boiler) and not yet been paid. If a receiver then takes possession of the property, what rights might I have?

Marcusm

P. Breathnach wrote: »

That last bit touches on my interest in the question.

Suppose I were a contractor who had carried out work on a property (for example, supplying and fitting a boiler) and not yet been paid. If a receiver then takes possession of the property, what rights might I have?

Precisely the same rights as you had before! Right of recovery against the person who contracted you and, if plumbers are like mechanics, a lien over the parts until you are paid.

squire23

Marcusm wrote: »

Receivers in a property context are generally appointed under the terms of the loan agreement as opposed to a court appointed receiver. The loan agreement will generally provide for the lender or security holder to have the power to appoint a receiver who becomes an agent of the borrower taking on its powers but not necessarily its responsibilities with respect to the asset.

The 'loan' is owned by another party, who appointed the receiver, and who have been clear with me that the receiver is also expected to maintain the property.

It's unclear here how the OP has obtained access to the property, has he bought it out from the receivership or is it just through persistence.

Without putting too fine a point on it, I spent 3 days arguing with both the loan company and receiver, and eventually advised both that I was accessing the property regardless. I paid a locksmith to access the proper due to my concerns of the condition of the property, install new locks and provided new keys to the receiver.

I want to stress that the loan company are very eager for me to make an offer to buy out the loan so while accessing the property may not have had consent from them they did not object as I made it clear that I would not being making any offer without evaluating fully the work required to bring the house back to a rentable standard.

However, just because a property has become damaged does not mean that the receiver has not exercised reasonable care - it might, for example, be the case that the costs of safeguarding the asset exceeded the likely cost of damage.

This is essentially my key question. The receiver has allegedly been going to house for over 12 months collecting rent yet when I took ownership 3 days ago, it turned out the property has been vacant for some months and fallen into disrepair. The receiver quickly backtracked on what they said and it turned out they have in turn subbed out the management of the property to another party who even the main loan company was not aware of.

My understanding is that receivers have a legal obligation to act in the interest of the property owner so my simple question is how did they let the house get to this condition? What comeback do I have?

4ensic15

Marcusm wrote: »

Precisely the same rights as you had before! Right of recovery against the person who contracted you and, if plumbers are like mechanics, a lien over the parts until you are paid.

A plumber is not like a mechanic. The mechanic exercise a repairers lien on the goods given to him to repair. Once a plumber fits his goods they become part of the property and can't be removed. If the plumber was given possession of the property he can remain in possession but a receiver can oust him. The o/p's story does not make sense as the receiver appears to have been appointed before he came on the scene.

MarkAnthony

The receiver will almost certainly be appointed as an agent for the person who owes the loan.

There are a number of rather confusing points in the OP, it's not normal (AFAIK) for a receiver to hold on to property for any great length of time. I assume there was a tenancy in place which could not be broken, which is again odd. Assuming negligence on behalf of the receiver personal liability is possible, otherwise the person owing the loan will need to recover against the persons who caused the damage, the receiver may deem it a waste of time and resources and is probably correct.

Edit: Furthermore if the place was in a state of disrepair once the receiver had taken it over then they have no duty spend money renting to get it to a rentable condition, they simply have to sell it as-is, which may not be possible in certain places around the country.

squire23

MarkAnthony wrote: »

The receiver will almost certainly be appointed as an agent for the person who owes the loan.

There are a number of rather confusing points in the OP, it's not normal (AFAIK) for a receiver to hold on to property for any great length of time. I assume there was a tenancy in place which could not be broken, which is again odd. Assuming negligence on behalf of the receiver personal liability is possible, otherwise the person owing the loan will need to recover against the persons who caused the damage, the receiver may deem it a waste of time and resources and is probably correct.

From what I know, the tenant just abandoned the property without notice to anyone.

So he can just let a property deteriorate without having a responsibility to anyone while it also accruing debt? That seems a little insane.

MarkAnthony

squire23 wrote: »

From what I know, the tenant just abandoned the property without notice to anyone.

So he can just let a property deteriorate without having a responsibility to anyone while it also accruing debt? That seems a little insane.

If you go down the rabbit hole that is the jurisprudence on Anglo-Irish receivership I think you'll find a little insane is perhaps under stating it.

If the property has been wrecked with no funds to repair it the receiver won't be able to rent it out again. I'm assuming any rental income wasn't servicing the loan.

A practical suggestion would be to gut the place and rent it out unfurnished. We'd be in the realms of legal advice to discuss the status of your ownership. It seems to me that any ownership rights would be disastrous for you as it would be far better for you to simply buy the place out of receivership if no other offers were forthcoming.

Obviously way before this point professional legal advice would be a massive advantage, but it's never too late.

squire23

MarkAnthony wrote: »

If the property has been wrecked with no funds to repair it the receiver won't be able to rent it out again. I'm assuming any rental income wasn't servicing the loan.

The rent was 400 more than the repayments due. This is also the subject of a different line of questioning with them. Along with who has the security deposit.

MarkAnthony wrote:

Edit: Furthermore if the place was in a state of disrepair once the receiver had taken it over then they have no duty spend money renting to get it to a rentable condition, they simply have to sell it as-is, which may not be possible in certain places around the country.

It was occupied when they took it over and the tenant was there for approx. 9 months so I assume that it was in a livable condition for that long.

This is a very well known Receiver/Property Management company by the way. But it seems their modus-operandi is to sub out the work without notifying he main loan holder and they seem to keep little or no control on this 'fourth' party.

Marcusm

squire23 wrote: »

The 'loan' is owned by another party, who appointed the receiver, and who have been clear with me that the receiver is also expected to maintain the property.

Without putting too fine a point on it, I spent 3 days arguing with both the loan company and receiver, and eventually advised both that I was accessing the property regardless. I paid a locksmith to access the proper due to my concerns of the condition of the property, install new locks and provided new keys to the receiver.

I want to stress that the loan company are very eager for me to make an offer to buy out the loan so while accessing the property may not have had consent from them they did not object as I made it clear that I would not being making any offer without evaluating fully the work required to bring the house back to a rentable standard.

This is essentially my key question. The receiver has allegedly been going to house for over 12 months collecting rent yet when I took ownership 3 days ago, it turned out the property has been vacant for some months and fallen into disrepair. The receiver quickly backtracked on what they said and it turned out they have in turn subbed out the management of the property to another party who even the main loan company was not aware of.

My understanding is that receivers have a legal obligation to act in the interest of the property owner so my simple question is how did they let the house get to this condition? What comeback do I have?

Yikes; I think I would speak with a solicitor. The receivers will have obligations towards the indebted owner; however, once taken in possession the owner has no right to interfere with the property without the acquiescence of the receiver. By refusing you entry in the knowledge that you would enter and change the locks they may have been readying a complaint against you for criminal damage to forestall any action you might take.

Head to a solicitor now.

MarkAnthony

squire23 wrote: »

The rent was 400 more than the repayments due. This is also the subject of a different line of questioning with them. Along with who has the security deposit.

€400 more than the repayments before or after the income tax due based on the owners income tax. Was the owner co-operating with the receiver on that issue? My personal rental nets a good €500 more than the mortgage but is loss making.

squire23 wrote: »

It was occupied when they took it over and the Tennant was there for approx. 9 months so I assume that it was in a livable condition for that long.

It seems the tenant may have done a number on the place, there is very little anyone can do about that. You'd need legal advice and probably a lot of patience with the court process to look into whether any negligence existed.

squire23 wrote: »

This is a very well known Receiver/Property Management company by the way. But it seems their modus-operandi is to sub out the work without notifying he main loan holder and they seem to keep little or no control on this 'fourth' party.

Renting places in Ireland is like herding cats for even the most diligent landlord.