A Receiver’s role is more than dealing with company closures
Receivers deal with lots of different situations when companies find themselves in difficulty. Tony Mitchell, Cranfield’s MD, relates some of the quirkier aspects of his job when dealing with buy-to-let landlords.
Are buy-to-let landlords filling their pockets as rents hit record highs? This is what is being claimed as the market for rented properties continues to grow.
Of course the general perception is that many landlords are getting richer as the rental market increases. Whilst it may be true that some landlords are indeed making a great deal of money, there are many others who are finding it very difficult given the high gearing they built up pre 2009. In reality, this is acting as a millstone around the necks of many landlords which higher rents are not removing. Consequently, Tony Mithcell has found himself being appointed over more and more residential properties as a Fixed Charge Receiver to recover lenders’ money lent under buy to let loans.
By the time we get involved lender/borrow communication has broken down and it is often left to us to investigate the status of rental properties with the aim of selling them for as much as possible. It is here that we come across some interesting situations.
In one recent case, we could not make contact with the occupier of a rental property and the debtor had long ago disappeared. We visited the property but could not establish if anybody was living there. Enquiries of neighbours by knocking on a few doors confirmed very little. Some did not think anybody was living at the property but they could not be sure whilst another thought that there was someone in residence. In such a situation the decision is whether to force entry or not. If we did break in and got it wrong the defence of “we spoke to the neighbours” did not seem very convincing and we could not see any judge being very impressed. In the end, therefore, we decided that we would have to go to Court to commence trespasser proceedings.
A few weeks later and armed with the necessary court order, we were able to instruct Bailiffs to gain forced entry and change the locks. As is very usual in these types of cases, we then had to instruct a professional property services company to make the property habitable (I will not go into graphic detail) before being able to market and sell the property over the subsequent months. A buyer was found very quickly and we were able to complete the sale and get the lender their money back.
Another case that Tony remembers well is where he was present at a forced entry of a residential property and found the whole of the roof of the house caved in and several hundred pigeons living in the bedrooms. Extracting a rental payment from the pigeons was never going to work but the more disturbing thing about the case however was that somebody was still living in the house.
One thing is certain a Receiver’s life is never dull.
