March 2001
The mortgagee may appoint such person as he thinks fit to be receiver. There is no requirement for the LPA receiver to be a licensed insolvency practitioner. The receiver should be someone who is qualified or sufficiently experienced to deal with the particular asset over which he has been appointed but there is no statutory requirement for any such qualification or experience.
Notes: [LPA s109(1)]A corporate body is not qualified for appointment as a receiver of the property of a company and is liable to a fine if it acts as a receiver.
An undischarged bankrupt commits a criminal offence if he acts as a receiver or manager of a company’s property on behalf of a debenture holder.
Notes: [s31]A person against whom a disqualification order has been made may not, during the duration of the order, be appointed a receiver or manager of a company’s property, without the leave of the court. Contravention of a disqualification order is a criminal offence.
Notes: [Company Directors Disqualification Act 1986 s1]
69.9 Appointment
The appointment of the receiver must be in writing and has to be accepted before the end of the following business day, although this acceptance does not have to be in writing.
The appointment takes effect from the date when the person to be appointed receives the appointment document.
Notes: [LPA s109(1)] [s33]69.10 Registration of appointment
(amended August 2012)
The appointment of the receiver over a company’s property should be registered with the Registrar of Companies within 7 days of his appointment. Failure to register the appointment is an offence subject, on summary conviction, to a fine. Any failure to register the appointment will not invalidate the appointment.
Notes: [CA 2006 s 871]
The receiver may be removed, and the mortgagee may appoint a new receiver, at any time. This must be done in writing.
Notes: [LPA 25 s109(5)]An LPA receiver, although appointed by the mortgagee, acts as agent for the mortgagor. The agency means that the mortgagor does not lose his entitlement to receive any income or other rent derived from the property, but that such income is now payable to the receiver, as agent of the mortgagor. The mortgagor also retains his liability to account for the tax on such income.
The official receiver should note that where the receiver is appointed pursuant to an express power in a mortgage deed (i.e. a fixed charge receiver (see paragraph 69.2 above)) the receiver will be the agent of the mortgagee unless the mortgage deed provides otherwise. Mortgage deeds containing an express power invariably contain a provision that any receiver appointed under the deed will be the agent of the mortgagor.
The mortgagor shall be solely responsible for the receiver's acts or defaults unless the mortgage deed otherwise provides. A mortgagee will incur no liability for the actions of the receiver unless the mortgagee can be shown to have actively intervened in the conduct of the receivership (Re: Standard Chartered Bank Ltd v Walker [1982] 1 WLR 1410, CA).
The receiver ceases to be the agent of a company if a winding-up order is made by the court or a resolution for a voluntary winding up is passed or the individual is made bankrupt (Re: Gosling v Gaskell [1897] AC 575; Thomas v Todd [1926] QB 511). In the absence of directions from the mortgagee, a receiver is personally liable in respect of any agreement that he makes after a winding-up order is made against the company or a resolution is passed for its voluntary winding up (Thomas v Todd [1926] 2 QB 511).
Notes: [LPA 25 s109(2)]
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