Receiverships

Fixed Charge Receiverships are partner led by Jim Stafford and Tom Murray. We have developed a strong reputation for taking charge of bank assets and meeting the bank’s wishes as to whether the property should be placed on the market immediately, or leased to tenants until the market improves.

We adopt a 5 stage strategy for dealing with fixed charge receiverships:

1. Stabilisation of the asset
2. Determining the appropriate strategy
3. Managing the asset
4. Disposing of the asset
5. Handover of the proceeds to Bank

The primary function of an asset receiver is to realise the asset, collect rent and assuming that the mortgage deed incorporates the power of sale, to ultimately sell the mortgaged property. The clear advantage to a charge holder in appointing an asset receiver is that the receiver and not the charge holder assumes the onerous responsibilities of landlord etc.

Generally a mortgage deed will incorporate a specific power to appoint a receiver, however in the absence of such a power there is provision under the Land and Conveyancing Law Reform Act 2009 which affords a mortgagee the statutory power to appoint a receiver over the income of a mortgaged property.

A receiver appointed under statutory power is an agent for the borrower. However, his primary function is to realise the assets charged for the benefit of the mortgagee. A receiver appointed under statutory power can demand and recover any rent due on the property over which he is appointed receiver. In certain cases where a borrower has granted a lease, the charge holder is not bound to the terms of lease even though rent may have been paid to the receiver and the charge holder may terminate the lease at any time.
In most cases of receivership over personal assets, the charge does not extend to cover chattels and in certain instances rent receivable may have to be apportioned between the property and chattels.

With all asset receiverships there are common problems encountered which can significantly impact on the net realisable values obtainable by the mortgagee. Typically lack of cooperation from the borrower can make it difficult to build a profile of the property including its VAT history, potential charges to CGT, rental roll, lease terms and documentation, financial contributions, local authority rates outstanding, certification costs, and duress payments necessary to bring the property to a saleable condition. Add to the above listing the lack of a functioning management company in an apartment development and with potential buyers and their advisors required to meet ever more stringent conditions when drawing finance for any property, the task of an asset receiver becomes more difficult. Despite the difficulties which can be encountered the appointment of a receiver by a mortgagee is often the optimum remedy to take control of a secured asset.

Our multi disciplined team are able to ‘hit the road’ immediately upon appointment. With practical hands on experience of running business in many different sectors we are able to anticipate potential issues and deal with them before they can become problematic.

We adopt a structured approach and carry out a detailed review upon appointment of all key business functions. This enables us to communicate a strategic and operational plan to all key stakeholders. As part of the strategic plan we identify the critical issues concerning operations, financial control, staffing & human resources, and corporate compliance.

The goal of the strategic plan is to identify a clear and concise strategy to operate the business in a way that it can be sold as a viable going concern which will maximize the return to the charge holder.

With our strong development property team, headed by our in house Quantity Surveyor, we have a structured methodology to advise on the options available for finishing out a part completed development.

When the preferred option is identified we can then implement it with our own in house team managing and supervising the key functions.

In summary we adopt a six stage process for property developments:

1. Carry out a feasibility study/review on the project
2. Identify any outstanding planning issues before developing and implementing a strategy to resolve those issues
3. Prepare detailed cost plan & budgets with a view to determining the cost benefit of the project
4. Supervise and manage the construction of the development
5. Appoint an appropriate agent and manage the sales & marketing function
6. Completion of site & handover to local authority and facility management company

For further information please contact Jim Stafford or Tom Murray on 01 661 4066 or jim.stafford@frielstafford.ie or tom.murray@frielstafford.ie