Most LPA receiverships involve properties owned by individuals. Typically, a borrower will give a charge to the bank over the building, and that is a fixed charge which gives the bank/lender the right to appoint a receiver and order the sale of the property on default. Usually, companies that are borrowing will give the bank a floating charge instead, in which case an administrative receiver, or administrator, is likely to be appointed with wider powers. Having said that, it is not unusual for LPA receivers to be appointed in respect of properties owned by companies, since much property lending these days is taken through special purpose vehicles (with the bank being given a fixed charge over specific properties owned by the vehicle). 



In straightforward cases involving residential property occupied by the borrower, a bank is more likely to repossess and use its power of sale (eg s101 LPA 1925). But, with investment property the bank will probably not want to take the risk and cost of day-to-day involvement with the property, in which case an LPA receiver will be a quick and effective solution. It will allow the bank to collect rental income and may be particularly useful if there is an unusually high rate of interest (so the bank will want to keep the mortgage alive). 



Note that a bank that appoints an LPA receiver has a duty to ensure that he or she is competent and responsible. But, the receiver does not have to be a qualified insolvency practitioner, although designation as a registered property receiver combined with NARA membership will give assurance of credibility and experience. The receiver will be deemed to be acting as the agent of the borrower (even though appointed by the lender), and this means that it is the borrower who is liable for the receiver’s actions. The receiver’s job will be to maximise income from the property to redeem as much of the mortgage as possible. If the receiver sells the property, then the obligation is to obtain the best price reasonably obtainable. But, the receiver does not have to postpone a sale in order to obtain a better price (eg in the hope that the property market will improve). Source: Lovells. © Practical Lawyer