Receiver not discharged

thomasjad

Hi all,

A bank (Bank A) has transferred a title of loan and all interests to another bank (Bank over a buy-to-let property. Bank A had appointed a receiver about a year ago in relation to the property, just wondering if there's anyone familiar with the law, does the appointment of the original receiver remain valid or should they be discharged and a new receiver appointed in accordance with the mortgage deeds by the new title holder Bank B?

coylemj

I'm guessing that whichever applies, you'll continue to not pay the mortgage.

thomasjad

Oh I'm not the owner or responsible for the mortgage, just a tenant caught in the middle

Lenar3556

My guess would be that the subsequent sale of the loan would not interfere with the role of a court appointed receiver.

The only impact I could see is that the recipient of any funds arising from a sale of such property would likely go to the ‘new’ financial institution as owner of the charge, rather than the original lender who sought the appointment of a receiver in the first instance.

Peregrinus

The question would be whether the receiver had any authority to collect payments on behalf of Bank B, when he wasn't appointed by Bank B. Without an appointment from Bank B, how is he their agent? And if he's not their agent, how can he exercise their rights in relation to the property.

You can't answer the question without looking in detail at all the relevant documentation - the mortgage granted over the property, the terms of appointment of the receiver by Bank A, the terms of the assignment of rights from Bank A to Bank B, and quite possibly other documents. Also the terms of any court order that may be involved.

It's quite possible that the receiver is entilted to enforce Bank B's rights as agent of Bank B. If he isn't, it's likely that there's a very easy fix to the problem; Bank B can execute a "belt and braces" appointment of the receiver to confirm his status as their agent.

Peregrinus

Peregrinus wrote: »

The question would be whether the receiver had any authority to collect payments on behalf of Bank B, when he wasn't appointed by Bank B. Without an appointment from Bank B, how is he their agent? And if he's not their agent, how can he exercise their rights in relation to the property.

A receiver is an agent of the borrower, not the agent of the Bank.

Peregrinus

D'oh! You're quite right.

All the more reason why one bank transferring its interest to another need not fundamentally affect the position of the receiver.