THERE has never been a more important time for lenders and brokers to adopt a proactive yet carefully considered approach towards Property Receivership…
The reason for this is simple.
We’re all living – and working – through what the history books will one day describe as the “COVID-19 era”.
As the medium to long-term impact of coronavirus unravels, we’re becoming increasingly aware that we’re traversing truly uncharted territory.
Within this context, it’s never been more essential to take stock of the options that are available to lenders and brokers now…
The compulsory stay on the progression of all Possession Proceedings and the enforcement of Possession Orders which was introduced by the courts on March 27, 2020, has been well documented.
Clarification around court directions and agreement was subsequently published on April 18. This confirmed that claims can still be issued and that parties remain able to reach agreement in live possession proceedings.
Nonetheless, this compulsory stay will remain in place until June 25 – and it’s entirely possible that it could be extended by the government until October 30, or beyond.
Consequently, it’s essential to keep borrowers as fully informed as possible – particularly if they’re currently in default.
Since possession cannot be obtained at the current time – although there are certain steps that can be taken which I’ll outline shortly – the financial implications for the borrower of matters being protracted must be clearly laid out.
At CG&Co, we’re recommending that borrowers are provided with illustrative redemption figures showing the impact of interest and default interest at both three and six month periods.
We believe that this is likely to reduce the future risk of challenge from a borrower surrounding their debt position while simultaneously increasing the likelihood of an early resolution.
Throughout the COVID-19 era, it’s important to remember that lenders remain fully entitled to appoint a Receiver over the secured property at the expiry of demand.
Receivers can still assume the management of the secured property in exactly the same way as has always been the case.
Over the past two months, CG&Co has continued to assist lenders and brokers by adopting a partner-led approach to determine their specific, individual needs in full.
Once these are identified, we implement the most appropriate strategy for enforcement, keeping the client fully informed about progress throughout.
We’ve also remained as proactive as ever by issuing pre-action correspondence at the earliest, appropriate opportunity.
With residential properties, it remains entirely possible to seek possession voluntarily by clearly explaining to the borrower that this route can keep rapidly escalating default interest and other costs to a minimum.
On those occasions when this route doesn’t immediately prove successful, lenders know that CG&Co will have a head start whenever the stay is lifted.
When a property is purely commercial, it remains possible for a Receiver to take possession of it by simply changing the locks as this process falls outside of the stay.
In addition, the recent update on April 18 confirmed that possession action can still be progressed against trespassers.
To read more detailed guidance about the options currently available to lenders and brokers in the COVID-19 era, please read the new dedicated guide that CG&Co has produced here.
In conclusion, we’re all finding the best and most appropriate way through these exceptionally difficult times.
The imperative for lenders and brokers to adopt a highly proactive and common sense approach has never been greater.
And you also need the best possible team working on your behalf to ensure the best outcome.
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CG&Co is a trading name of
CG Recovery Limited, a company
registered in England and Wales
under company number 08249691
1 Booth Street,
Tel: 0161 358 0210
Fax: 0161 358 0211