Daniel Richardson, Property Receiver and Insolvency Practitioner, CG&Co
IT might keep getting delayed, but it’s going to arrive at some point…
And when the stay on possession and enforcement proceedings is finally lifted, the courts will be hit hardest.
Late last week – just 48 hours before the stay was due to be lifted on August 23 – the government announced its intention to extend this date for the second time.
We’re now working to a September 20 deadline, although the government hasn’t ruled out further extensions if public health advice dictates this.
Put simply, the massive scale of the court logjam is going to manifest itself at some point – and the scale of this should not be underestimated.
Earlier this month, the extent of the problem became even clearer when statistics published by the Ministry of Justice covering April to June showed that, compared with the same quarter last year, mortgage possession claims, orders and warrants fell by 97%, 96% and almost 100% respectively.
What’s more, no repossessions by county court bailiffs were recorded.
So what do lenders need to do at this point in time?
I’ve never been more convinced that a highly proactive approach must lie at the heart of all undertakings.
Put simply, we all have too much to lose by not taking the swiftest recourse whenever default cases arise.
It’s worth stating at this point that any lender authorised or regulated by the Financial Conduct Authority (FCA) needs to follow the FCA’s guidance and avoid either commencing or continuing possession proceedings until October 31.
Bar for future extensions to the stay, those lenders who aren’t regulated by the FCA will – at least from the Court’s perspective – be able to resume stayed possession proceedings after September 20 via a “reactivation notice”.
Significantly, they have to demonstrate as part of this notice that they’re in possession of any relevant information about a borrower’s circumstances.
This includes information about the effect of the pandemic on the borrower, which will enable the court to be fully informed when reaching a decision.
This requirement lasts until March 28, 2021.
Since the lockdown commenced, CG&CO has been ensuring that recoveries are consistently as far advanced as possible, despite the fact that it’s been impossible to arrange face-to-face meetings due to COVID-19 restrictions.
We’ve accomplished this by entering into discussions with borrowers at the earliest opportunity via telephone, email or conference calls.
Consequently, we’re already in full possession of details surrounding the effect of the pandemic on borrowers for existing matters.
To conclude, we’re determined to ensure that the lenders we work for recoup their loans as quickly as possible.
As the new normal evolves and greater certainty returns, lenders must consistently adopt the most proactive approach possible to Receivership.
And it’s equally imperative that you’re supported by the most proactive team of Property Receivers.