Improving customer outcomes using LPA Receivers - PowerPoint Presentation

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Improving customer outcomes using LPA Receivers

25th April 2018

Tom Black

Senior Associate – Eversheds Sutherland

Sue Joy

Head of LPA and Property Management - Savills

Introduction

Introduction

Tom Black

Head of Equity Release contentious teamSpecialist team sitting within wider centre of excellence for financial services dispute resolution

Full spectrum – BAU litigation to complexRegulatory advice – MCOB etc…Remediation and strategic advice

Sue JoyHead of LPA and Property ManagementPart of Savills Property Solutions Department offering Asset Management and LPA services to mortgage lenders and private clientsSavills provides LPA services for all asset classesFlexible and creative approach to non-standard appointments

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What is an LPA Receiver?

Practical benefits

Practical benefits

What is an LPA Receiver?

Agent of the customerLender not usually liable for their actionsManagement of property and tenancies

Collecting rentServing notice on tenantsPreventing properties being re-let to authorised tenantsDisclose information to tenants that lenders cannot

Conduct of other affairsProperty repairs and maintenanceConducting litigation on behalf of customer – insurance claimsManaging building projectsFlexibility in dealing with interested parties

Obligation to achieve best price where sale is the appropriate option5

What is an LPA Receiver?

Legalities and process

Legalities & process

What is an LPA Receiver?

Power to appointStatutory – Law of Property Act 1925 – s101 (1)(iii)Contractual – mortgage terms and conditions

Default necessary to appointStatutory - power of sale must have arisen – s101(1)(iii) and s103Contractual – power to appoint under T&Cs must be engaged

Contractual powers essential for workable LPARPower to take possessionPower to sellPower to carry out repairsAppointed in writing - usually by Deed Avoid interference once appointed

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Improving customer outcomes

Practical examples

Practical examples

Improving customer outcomes

Case Study ALender has charge over freehold, subject to long lease over part to difficult family member

Customer deceased – family member causing difficulties – proposed sale at undervalue and multiple complaintsLender cannot evict family member – bound by leaseLandlord obligations potentially onerous

LPAR benefitsTake possession without lender adopting landlord liabilitiesLPAR flexibility – meeting at property – frank discussionsLender removed from LPAR actions – reduces risk for adverse PR

Outcome for customer’s estate improved – property in possession and sold without cost and delay of possession proceedings9

Practical examples

Improving customer outcomes

Case Study BEquity Release mortgaged property occupied by an elderly borrower, her son and daughter-in-law

Terms of the loan stated that works to extend the property that had been commenced would be completed within 2 years The works were never completed and parts of the property were exposed to the elements, threatening the lender’s security

LPAR benefitsLPA Receiver met the family on site to review the progress of the works and assess the risk to the fabric of the propertyValuations and marketing advice sought from local estate agent to check the equity position

LPA Receiver worked closely with the borrower’s son to ensure major issues were addressed quickly to protect the fabric of the building Outcome – no need to gain possession of the property from elderly borrower who remained in occupation throughout10

Practical examples

Improving customer outcomes

Case Study CCharge over semi detached property

Borrower building attached property – becomes terraceLender threatens to call default and repossess due to impact on valueNew property part built – building site and impacts value

Breach of terms and conditions – not to alter property without lender consentLPAR benefitsLPAR can take over building of new property – finish build and arrange sale of partLender can be redeemed in full from sale of new propertyCustomer outcome improved by

:Avoiding repossessionAvoiding costs of repossession 11

Practical examples

Improving customer outcomes

Case Study DEquity Release mortgage - detached property

Property vacant for some years resulting in breach of mortgage Ts and CsElderly customer in Local Authority care suffering from dementiaLender appoints Savills as LPA Receiver

LPAR benefitsLPAR liaises with care home – family washed their hands of situation – customer would never leave care homePersonal belongings delivered to the care homeFunds from sale of possessions credited to the mortgage account

Garden tidied and property cleaned and presented to the marketProperty sold for 110% of RICS MV:Mortgage redeemed in fullSurplus proceeds went to care home for fees12

Afternoon surgery

Case clinic

Room 725 – Level C72.00pm – 3.00pmPlease drop in and see us!

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Questions?

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