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Joshua
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience:  LL.B (Hons), Higher Prof. Dip. Law & Practice
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Can A receiver put my buy to let property up without

Resolved Question:

Can A receiver put my buy to let property up for auction without a court summons,I have offered to bring my 2 months arrears up to date,but can not pay his cost as well ,I can pay his cost within 3 months but not now.The lenders agree with the receivers and want the property sent to auction.I have been with the lenders since 2012
Submitted: 1 year ago.
Category: Property Law
Expert:  Joshua replied 1 year ago.
Hello and thank you for your question. I will be very pleased to assist you. I'm a practising lawyer in England with over 10 years experience.

May I ask is there any way you think you could raise funds from any other source to settle all the costs or is this simply impossible please?
Customer: replied 1 year ago.

i simply can't afford it at this time otherwise i would of done this regards Tony

Expert:  Joshua replied 1 year ago.
Thank you. The appointment of an LPA receiver is something that buy to let lenders are increasingly relying upon in managing mortgage defaults and the legal position for borrowers is nothing short of bleak I fear. Receivers cannot be appointed on residential mortgages which are regulated but they are available to lenders on buy to let mortgages which are not regulated. Unfortunately, although in law the receiver acts as your agent, in practice, he's looking after the interests of the lender and not you and the involvement of an LPA receiver is generally not advantageous to a borrower because a receiver can take day-to-day control of your properties and of course charges fees for doing soThe only guaranteed way of removing an LPA receiver is either with the consent of the bank or by remortgaging. Unfortunately, many people who have LPA receivers involved are not in a position to remortgage but if you believe there is any possibility of remortgaging, you may wish to speak to one or two mortgage brokers to see if there are any products available to you as an remortgaging, you remove the current lender.Failing this, it is a question of liaising with your current lender and pointing out both that you have brought the accounts back into good standing and offer to provide evidence of your continued ability to maintain the accounts in good standing. The issue of you living in one of the buy to let properties however will be a problem as this is prohibited under to my knowledge, all buy to let mortgage products. In addition , lenders are often unwilling to remove LPA receivers where they feel there is a continued risk of further default by the borrower because the existence of the receiver guarantees that the properties will be managed in a manner to their interestsLPA receivers are therefore a very difficult issue for BTL borrowers to deal with once appointed and there have been calls for their use and the old law on which they are based to be abolished but to date nothing has been done. Unfortunately, because of the lack of regulation, apart from remortgaging, there is no reliable means for you to wrest control from the lender even if you pay off all the monies owed. A large property developer has recently taken its lender to court to test the issue at a cost of tens of thousands of pounds and failed in its attempt where the judge confirmed that essentially they had very few rights indeed so even court is not a useful option despite the costs. The case in question if you want to read it (it makes depressing reading I'm afraid) is JL Homes Limited and (1) Mortgage Express (2) Paul Diakiw and David Heap (Acting as LPA Receivers). The case confirmed that an LPA owes very few duties to the borrower and is entitled to act in his own interests rather than those of the borrower providing he does not act in bad faith.There is nothing to prevent you continuing to negotiate but as the law presently stands, unless and until the law is reformed I regret there is little or no redress for borrowers in the face of LPA receivers actions which can cost a borrower dearly. I hope the above is of assistance though I am very sorry it makes for such depressing reading. Your feedback is important to me. If there is anything else I can help with please reply back to me I'd be very grateful
Customer: replied 1 year ago.

Joshua, is there any of the consumer credit act section

16c(5) and 126 any use to me please also does the receiver have to tell me the guide price for auction as i have equity in the property £70.000 regards Tony

Expert:  Joshua replied 1 year ago.
Buy to let mortgages enjoy an exemption under the Consumer Credit Act 2006. There have been various calls to change this and bring buy to let mortgages taken out for investment rather than business purposes withint CCA regulation but to my knowledge thee have not been implemented to date and the BTL mortgage market remains unregulated. This has some benefits in that loans can be obtained free of the arguable over regulation applied to normal residental products but the flip side is that there is a lack of protection for borrowers who fall into difficulties with their mortgages.Is the anything above I can clarify for you?
Customer: replied 1 year ago.

does the receiver have to tell me the guide price for auction as i have equity in the property £70.000 regards ***** ***** 68000 BTL....

SALE ON THE OPEN MARKET 140000 Tony

Expert:  Joshua replied 1 year ago.
The receiver does not have to give you information about the guide price because he owes almost no duty to you as receiver based on the above decision but the guide price can be readily viewed on the auctioneers website and sites like rightmove and so on. Of course the guide price will normally be set to attract interest and will not be the reserve price which is the minimum price that the receiver can set to allow the property to sell. As distinct guide price which is public, the reserve price is Private between the auctioneer and the receiver and the receiver may not disclose the price to you should he choose not to. the reserve price will normally be set substantively above the guide price.One area in which you do have potential addresses if the mortgage lender allows the property to sell for substantially below what you can demonstrate is market value for the property the mortgage lender does have a common law duty to mitigate its losses. if the property suffers a shortfall on any sale as against the mortgage and the lender subsequently seeks to recover the shortfall from you, and you can demonstrate that they have allowed the property to sell for significantly below market price and you can evidence this by reference to comparative properties, you could seek to restrain their claims against you for any shortfall the balance that they negligently or wilfully sold the property for significantly less than market value.Have I been able to help you with all your questions on the above?
Expert:  Joshua replied 1 year ago.
Does the above answer all your questions or is there anything I can clarify or help you with any further?
Customer: replied 1 year ago.
Hi Joshua can I have a think about what I can possibly do and don't act you shortly please it's all a bit stressful at the moment regards TOny
Expert:  Joshua replied 1 year ago.
Yes of course. If you have no further questions for now I should be very grateful if you would kindly take a moment to click to rate my service to you today. Your feedback is important to me. This will also save the thread to your account and you can return to at any time if you have any further questions which I am happy to answer without further charge. With best wishes.
Joshua, Lawyer
Category: Property Law
Satisfied Customers: 25358
Experience: LL.B (Hons), Higher Prof. Dip. Law & Practice
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