When a fixed charge receiver is appointed over a property, they decide who hears about it, when, and on what terms. The investor who approaches clearly, early and credibly is the one most likely to get a deal. Most of the work is in the first phone call and the first email.
Fixed charge receivers are usually appointed under a lender’s mortgage. They are often chartered surveyors or property specialists rather than insolvency practitioners. Their first duty is to the lender, and they must take reasonable care to get a proper price. In practice that means they normally sell as seen, with little information and no warranties. They value certainty of funds, speed, a buyer who won’t re-trade the price, and a solution that clears the debt and their costs. If you show those things, you are already ahead of most of the competition.
Finding the receiver is easier than most people expect. Start at Companies House. Open the borrower company’s record, look at the insolvency tab for the practitioner’s name and address, then open the filing history and find the notice of appointment, which is usually form RM01. Contact details often sit in the covering letter, the signature block or the end stamp. The charges tab shows which lender appointed them. Then search the firm’s website for its receivership team and direct numbers. Handwritten notices can be hard to read, so check names against the original.
When you call, have the company name, company number and property address ready. Introduce yourself, say why you are calling, and say that the property looks like what you are looking for. Ask how to register your interest, who in the team is handling it, whether an agent or auction house has been instructed, what timetable they have, and whether they would consider a sale to you before going to market. Ask whether the property is vacant or let, and whether a viewing can be arranged. If it is not for sale, ask why not. Then confirm everything by email the same day. A short email with the subject line “property address, company name, company number, expression of interest” puts your interest on record.
Remember that a straight purchase is only one route. Until contracts are exchanged on a sale, the borrower can usually end the receivership by repaying the debt with interest and costs. That opens other options: arranging refinancing for the company, funding the director’s repayment in return for a share or a joint venture, buying a single unit so the lender is repaid enough to release the rest, or in some cases buying the debt itself. Each route needs the agreement of different parties, and each needs a redemption figure from the lender before you commit any money. Get legal advice before buying a debt or a company, because those are more complex than buying a property.
A few practical points. Move early, ideally before an agent is instructed or an auction date is set. Be respectful with directors, who may have a personal guarantee at stake, and offer a solution rather than a low offer. Never enter a property or approach tenants without the receiver’s agreement. Commission your own searches, survey and legal checks, because you will get little information from the receiver. Check the title at the Land Registry, check whether the property is opted to tax for VAT, and check the tenancies if the property is let. If you hear nothing for seven to ten days, call again. And be prepared for the property to have sold already, since the call will confirm either way.
If you are an introducer acting for an investor, tell the receiver at the outset that you act for a client and whether that client is cash or funded. Agree your fee in writing with your client before making any introduction, because receivers and lenders do not pay introducers.
Receivership cases move quickly, and a well-prepared call is worth more than a long one. If you would like a copy of our contact script or our introduction terms, get in touch.
Paul Brindley, Licensed Insolvency Practitioner, Midlands Business Recovery