narator
The Newsletter of The Association of Property and Fixed Charge Receivers
JANUARY 2009
www.nara.org.uk
TRAINING DAY SUMMARY EDITION
nara
Training
Days
Mark Stupples, Chairman: nara
It was a pleasure to welcome so many people at
the training events this year. We saw the biggest
ever turnout to these events, which this year find
us in the midst of an unprecedented economic
situation where the need for the skills and
experience of our members is greater than ever.
As usual our course aim has been to produce
a programme which balances the need to
remind ourselves of the basic issues, with the
need to continue to stretch our knowledge
and to address current topics. This year has
seen unprecedented numbers attending our
training days, and I hope that all delegates
again found the programme as interesting
and rewarding as in previous years.
Whilst in the last two years we have included a
significant element of interactive group sessions,
in the light of current circumstances we reverted
to a more varied programme providing
significantly more information and views from
lenders, solicitors and practitioners hopefully
pertinent to members’ current interests,
concerns and issues. I hope that all attendees
found it both relevant and challenging.
We should not forget that the training days
involve a significant voluntary commitment to
time, effort and expertise by all of our speakers.
I am sure you will want me to thank them for
their willingness to help nara Members maintain
and enhance their own skills and knowledge.
During the past year, the Joint Registration
Committee for the Registered Property Receivers
Scheme has reiterated the role of nara as the
exclusive provider for training to the scheme. The
annual training days are our major contribution
to this task. However, again this year in
September we held a training day for trainees
- an introduction to insolvency and property
receivership for those new to that world. This
was, perhaps not surprisingly, oversubscribed
reflecting the increase in business opportunities
in our members’ specialist area of insolvency.
This will inevitably lead to increased numbers
entering, and successfully completing, the
Registered Property Receivership examination.
I indicated last year that we had recently
sought Members’ views on proposed changes
to the current monitoring arrangements
administered on behalf of the JRC. There was
an overwhelming majority in favour of a change
to a “self-certification” basis. The arrangements
for a new process operated by the IPA on
behalf of the JRC have now been agreed and
I was delighted to have a speaker from the
monitoring organisation to further explain the
process to members. I would repeat my earlier
reassurances that nara will seek to ensure that
the new process is as rigorous as possible to
maintain and improve standards and enhance
the benefits of lenders utilising Registered
Property Receivers in fixed charge receivership.
I would also take this opportunity of reminding
members that the task of updating and
issuing new Guidance Notes continues under
the coordination of Peter Beckett, All of the
Guidance Notes are available through the nara
website. The Practice Statements and Guidance
Notes have built into what is now a considerable
manual for members for the conduct of
Fixed Charge Receivership. Peter is currently
undertaking a thorough review to ensure
that all documents remain “best practice”.
As ever we are keen to plan for next year’s
training days and we will welcome feedback
from this year’s sessions to help us maintain
our standards and ensure that we develop the
training programme in line with Members’
wishes.
Mark Stupples, Chairman - nara
UK Managing Partner
King Sturge LLP
narator is published by The Asscciation of Property and Fixed Charge Receivers,
Registered Office, Eversheds 115 Colmore Row, Birmingham B3 3AL
In this issue
Training Day
Summaries
nara Administration Changes
Introducing your council:
Salata & Jones
Dates for your diary
TRAINING DAY PHOTOS
Thanks To Sponsors
nara would like to thank the
sponsors of the 2008 Training Days:
Jardine Lloyd Thompson Plc
St Philips Point, Temple Row,
Birmingham, B2 5AB
Tel: 0121 626 7821.
and
Safe Estates Services Ltd
Elstree Way, Borehamwood, WD6 1RX
Tel 020 8238 6090
TRAINING DAY SUMMARY EDITION
What Lenders Want
- The HSBC View
Speakers: Peter Thompson / David Todd, HSBC
When appointing a receiver, lenders
look for expertise, professionalism
and the ability to build relationships.
According to David Todd, Senior
Manager for Commercial Recovery at
HSBC, speaking at the Huddersfield
event, those qualities are more important
than ever as lenders try to minimise their
losses in the current market turmoil.
Todd began by outlining the scope of
the challenge facing lenders. HSBC
economists expect the downturn to last
at least five or six quarters, followed by
slow recovery. House prices are expected
to fall a total 40% from their peak, while
commercial property prices have already
fallen 20% since 2006. The situation is
made worse by projects in development
which would be unrealistic even at the
peak of the market, and unprecedented
levels of mortgage fraud.
“Where we do have customers in
difficulty, we are committed to finding a
solution,” Todd said. “The big issue is
whether the customers do cooperate, and
whether they have realistic expectation,
and that’s where divergence begins.”
Customers heading into LPA receivership
have a typical profile - an amateur
landlord, usually inexperienced, who
has seen too many TV property shows,
won’t necessarily do the right thing, and
won’t take advice of default.
HSBC begins the process by sending a
letter of concern to the client, setting out
what the problems are, what the client
needs to do to resolve them, and a
timescale for them to do the necessary.
Just the threat of an LPA can force action
from a client, Todd noted.
If the client doesn’t address the bank’s
concerns, the recovery team will appoint
a receiver. The bank maintains a panel
of IPs and LPAs who are invited to tender
for cases. “We think that’s important
because it provides operational
efficiencies, standardises procedures
and gets us better rates,” said Todd.
The bank generally uses surveyor LPAs
for cases involving single assets or
where there’s a small development
which needs to be completed, and IPs
if there’s a trading entity or issues with
the way the account is being conducted.
HSBC currently uses two national firms
of LPAs, selected for their national
experience and ability to bring that to
bear on situations.
HSBC relies heavily on the receiver’s
expertise to achieve its aim of maximising
recovery. Todd said he expects his
receivers to look at a range of options
to realise assets, or at least to minimise
losses.
As a receiver, you must demonstrate
active marketing of the property, and
provide prompt and accurate reports.
“If there are problems, we need to
know about them and what options are
available, and we want evidence that
receiver is doing their job,” Todd said.
Photographs are often more useful than
wordy descriptions to show the condition
of the property, he noted.
Detailed market information is vital to
building credibility as a receiver. Any
buyers in the current market will be
coming in at low prices, so you need to
know what to accept.
Being able to control costs is also
important and very much in your own
interest. HSBC is prepared to recognise
success, but will look for a loss-sharing
agreement if losses are significantly
larger than expected.
Ultimately, a lender will use an LPA receiver
to mitigate the risk of using repossession.
If the customer doesn’t have a useful
relationship with the lender, he may still talk
to an independent professional. “We want
people to try and have a dialogue with the
borrower, particularly if we fail,” Todd said.
Finally, the HSBC speaker commented on
current “hot topics”. One of these was
the appetite for the bank to invest directly
in assets over which they have security and
where there is distress, particularly given the
difficulties in realising assets in the current
market. This is being considered much more
actively with HSBC. However, he pointed
out that there are a number of issues in
respect of tax, compliance etc. That said,
he commented that where an asset “washes
its face” then there is no massive hurry
to sell. Albeit, HSBC has not seen many
properties that they would be comfortable
holding for any time.
nara
Administration Changes
Dag Smith nara’s General
Administrator, left us at the end of
2008. We are very grateful to him for
all his hard work in raising the profile
of NARA and working tirelessly on our
behalf – we will miss him greatly.
We are also pleased to announce that
a new General Administrator has been
appointed – her name is Carolyn Hirst
and she can be contacted on Carolyn@
nara.org.uk
Please note, too that there will also be
a new mailing address:
nara
PO Box 629
OLDHAM
OL1 9HH
TRAINING DAY SUMMARY EDITION
Know Your Powers on
Buy-To-Let
Repossessions
Speaker: Julian Wintle, TLT Solicitors
Repossession of buy-to-let
properties is a growing area
for receivers. As Julian Wintle,
Associate Solicitor with TLT’s
Mortgage Enforcement team,
emphasised, you need to know
your powers when dealing with
tenants or trespassers.
Residential repossessions are at a 15-year-high,
with the number of cases involving buy-to-let
properties doubling between 2007 and the
first half of 2008. It can be an emotive issue,
as Wintle demonstrated with tabloid headlines
attacking ‘greedy mortgage lenders’.
Under the new pre-action protocol for mortgage
possession proceedings, the lender has to take
all reasonable steps to try and resolve arrears
situations. But although there is some ambiguity
in the wording, that doesn’t apply to buy-to-let
mortgages.
Lenders can lead repossession proceedings
themselves, through the usual county court
procedure. This can take several months to reach
a hearing and if the lender takes possession, the
lender will be then responsible for the property.
This is the last resort for the lender, Wintle
emphasised, and, in the case of buy to let
mortgages, will usually only be taken if the
property is vacant. A lender taking repossession
of a let property is not able to evict the tenants,
and has to accept the responsibilities
of being a landlord. Lenders generally
want to avoid such responsibilities, as
well as problems such as enforcement
notices.
eviction proceedings again have
to go through county court. In such
cases, people generally don’t have a
right to be in the property even if they
think they do, Wintle noted.
As a receiver, you can take proceedings
against tenants and trespassers;
however, because you are acting as
the borrower’s agent, you don’t need
a court order to take possession of the
property if you are sure it is vacant.
Knowing exactly who is in occupation
is vital. “You need to know if there’s
any rent to collect, and who you’re
responsible for. Ultimately, if there’s
uncertainty over the occupation of the
property, that can have an adverse
effect on the sale price,” Wintle said.
You do, however, need to make sure
that there are no tenants before taking
possession. The eviction process for
tenants or trespassers is similar to
that of regular mortgage repossession
proceedings, but has some special
features.
If the tenancy is terminated by a Section
21 notice, there is an accelerated
process which can be started by issuing
a claim in county court. The tenant
has a specified time to find a defence,
and the judge may grant possession
without a court hearing. The tenant
has very few grounds for defence, but
you can’t claim both possession and
rent arrears.
If you also want to claim rent arrears,
you can make a claim in county court
following service of the appropriate
notices e.g. a Section 8 notice. As with
regular mortgage repossession, this
can take several months.
If the property is occupied by someone
who doesn’t have the right to be there,
Troubled borrowers can be less than
helpful in revealing who is meant to
be in the property. The best approach
is to write to the occupiers and ask
for evidence of their right to occupy.
If they provide tenancy agreements,
that can help get the case back on
track. If they can’t provide evidence,
there’s no reason not to treat them as
trespassers.
Wintle emphasised that caution is
required. “Before taking any action
as a receiver, it’s important that you
have the powers to do what you want
to do,” he said. “If you act without
having the power, then there is the
prospect of personal responsibility on
your part.”
Your effective powers come from the
mortgage conditions, which usually
grant you the same powers as the
lender. This can vary between lenders,
however, so it’s vital to check the
terms and to take legal advice.
TRAINING DAY SUMMARY EDITION
Getting to Grips
with Chattel Mortgages
Speakers:
Peter Bache / Mike Hanson, King Sturge
Chattel mortgages on plant and machinery require
special treatment from receivers, said Peter Bache,
Partner at King Sturge, speaking at the Huddersfield
event. Most importantly, you need to make sure that
you have clear title to the assets, so that you can do the
necessary when things go wrong.
A chattel mortgage is similar to the familiar property mortgage, but applied to plant, machinery or other moveable assets. A chattel mortgage
can be taken at a new lend stage, or at a subsequent review.
Bache outlined the necessary steps in taking a chattel mortgage on a company’s assets. The first step is to make sure that the company can give such
a mortgage. The company must be registered under the Companies Act
in England or Wales (Scottish law is different), and must own the assets it
wants to mortgage.
If a chattel mortgage is appropriate, contract a solicitor to check whether
there’s any other mortgage or prior charge on the assets. It may be useful to get solicitors to prepare and approve minutes of the board meeting
where the company agrees to take the chattel mortgage.
You should also consider HSE issues. There’s no in point taking chattel
mortgage on assets which might have a negative value because of future
liabilities.
Make sure that the mortgage includes terms such as a fixed charge over
assets, guarantees and warranties, and agreements on maintenance when
appropriate. Also, check that it gives the necessary powers to fixed charge
receivers who may be appointed in the future. Make sure that the assets
are insured in the joint name of the lender.
“You need to make sure with chattel mortgages that you have clear title
and, if things go pear-shaped, that they’re suitable for you to do a recovery
process,” Bache emphasised. You must also register the mortgage with the
Registrar of Companies within 28 days of agreement.
It can be useful to instruct a valuer to produce a valuation and schedule
of chattels to attach to the mortgage. Identify the make, model and serial
numbers of each piece of plant, and provide photographs alongside written schedules. Arrange regular meetings with the company to inspect the
assets - every six months is usually a good interval.
Attaching plates to the chattels stating ‘This item is charged to (name of
lender)’ is good practice. Legally, this is the safest way of preventing a
bailiff taking the assets in case of administration.
You should consider whether you will be able to
maintain access to and security of the assets in
case the company runs into distress. If things do go
wrong, you will need to go back into the property
and arrange the sale of the assets. If the property
is leasehold, you may need to make arrangements
with the landlord about access.
You may also want to negotiate with the landlord
over assets which are of more value if kept in situ.
Bache referred to a case he handled following the
collapse of Enron, involving a lavishly fitted-out office block - some chattels, such as sophisticated
partitioning, were sold to the landlord as they would
have lost most of their value if removed from the
building.
TRAINING DAY SUMMARY EDITION
Monitoring
Issues
David Kerr, Chief Executive, Insolvency Practitioners Association
Following last year’s poll of members, indicating an 87% level
of support for the concept of self-certification as part of the
monitoring process, a new regime is to be introduced, based on
annual self-certification, five-yearly visits, and other visits, where
necessary.
David Kerr outlined the structure of the new regime which aims
to be more positive and constructive, with the intention of raising
standards and making sure that they are adhered to. The
regime is intended to underpin the voluntary regulation scheme.
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Outlining the background to the change, David Kerr
said that monitoring was originally undertaken by
JIMU (Joint Insolvency Monitoring Unit)
“What we’re looking to do now is apply the
IPA’s new, better, regulation principles to this
new scheme” he said, adding that the IPA is
an experienced regulator, with an established
monitoring system subject to oversight by Insolvency
Service. The IPA brings a degree of innovation,
with the emphasis on substantive issues
Monitoring will be undertaken on issues like quality
of communications, looking for regular and realistic
dialogue with appointers; case progression; and
recording the decision-making process. There will
be two elements to the monitoring programme self-certification and visits.
Self-certification will be an annual process - review
by individual member of their own cases, which will
be selected by the IPA. If the member has 20 or less
open appointments, they will be asked to review
a maximum of two. The review should highlight
any shortcomings, and apply corrective measures.
Members will not be penalised for identifying
problems, but will gain credit as the monitors will
look for evidence that a proper review has been
made and any issues addressed.
.
Visits will usually occur once in a five-year cycle,
with the intention of starting in 2009. Most visits will
last no longer than a day and a half, whilst many
will be concluded in under a day. The duration will
depend on the number of cases to be reviewed and
individual circumstances. Members who are IPs as
well as RPRs will get a joint visit, and there will be an
opportunity to comment on the subsequent report.
By the time the member has received a visit, they will
have experience with the self-certification process
and should be able to make sure that everything is
in order prior to that visit. That will help make sure
the visit is a more positive experience than under the
previous regime.
David Kerr concluded: “We bring an experienced
team of monitors. The purpose is to provide
credibility to the scheme and underpin the scheme’s
values. It will be positive and constructive in its
approach, but it needs to be sufficiently robust to
ensure that appointors have sufficient faith in the
scheme.”
TRAINING DAY SUMMARY EDITION
The Great VAT Dilemma
Speaker: Philip Edwards, Independent Property Consultant
LPA receivers often collect VAT on rents and on sales,
but there are no clear rules on what to do with it. This
can easily leave receivers on the wrong side of the
law.
Philip Edwards, a former director of DTZ now
practising as an independent consultant, is calling for
input from NARA members to clarify the position with
HMRC.
Surveyors usually don’t get involved with VAT until
they act as an LPA receiver, when they find they have
to be experts. The problem is that there’s little to
guide them. “However hard we tried to find some
proper rules, we found there weren’t any, and were
often left floundering with makeshift arrangements,”
Edwards said.
As a receiver, you may face a dilemma over where
your duty lies. Does your duty to the mortgagee
entitle you to deprive HMRC of revenue on
collected rents? Or, if you are obliged to pay the tax
authorities, exactly how much are they entitled to?
Every lawyer will give a different answer, Edwards
noted.
You should be aware of three classic mistakes when
handling VAT:
• Assuming that VAT is not your problem You
can’t just hope the problem will go away,
because it won’t.
•
Handing VAT to the borrower and letting him
worry about it. That can work if the borrower is
thoroughly trustworthy or in the hands of an
insolvency practitioner, but not in most cases.
•
Handing all the VAT collected to the
mortgagee. That fails to meet your legal
obligations to the tax authorities, as money
collected as VAT must go to HMRC and not be
regarded as part of proceeds of receivership.
Equally, it’s wrong to hand all the
VAT you’ve collected directly to
HMRC because if the money were
handled through the borrower’s
account, it would be subject to the
offset of input VAT.
“It comes back to the problem that
there are no rules, and there’s
nothing that Customs can clearly
point to in law and say this is what
you should follow,” Edwards noted.
“We have this dilemma of how
should we account for it.”
Some previous approaches have
worked in some situations, but
may put the receiver at risk of
inadvertently breaking the law.
These include:
•
LPA receivers could
use their own VAT
registration in the
early 1990s,
something that
Edwards described as
a godsend.
•
Accounting through
an administrator has
worked in some
cases, and enabled
some deductions for
input VAT.
•
Informal arrangements
have worked by
agreement with local
VAT offices, but may
be against the letter of
the law.
• Accounting for VAT at
the end of receivership
can work, but is very risky on anything
but short-ter receivership.
“I would emphasise all
of these come with a
health warning - tread very
carefully, because there
are severe penalties for
contravening VAT law,”
Edwards said.
Edwards is now collecting
questions, comments, case
studies and suggestions
from receivers via the NARA
office. The aim is to take a
body of evidence to HMRC
to demonstrate the scale
of the problem. Individual
comments will be treated
as confidential, and any
comments passed to HMRC
will be anonymous.
“The critical point is we
have to find a way of getting
the right amount of VAT
collected by receivers across
to HMRC,” said Edwards.
“It’s just a question of trying
to find a practical means of
doing this.”
Have you ever
though that what
you are now
reading might
be of interest to
someone else?
If so we can add the name
and contact details of the
“someone” to the
nara mailing list.
An e-mail to the nara office
([email protected]) advising
us of of the name and address
of the requested recipient(s)
is all that is required.
TRAINING DAY SUMMARY EDITION
KNOW YOUR
Liabilities
Speaker: Justin Barker, Thomson, Snell and Passmore
Without careful diligence,
receivers can find themselves
personally liable if things go
wrong. Justin Barker, Senior
Associate in the Dispute
Resolution team of Thomson,
Snell and Passmore, outlined the
legal responsibilities and duties of
LPA receivers, and explored some
common pitfalls.
As a receiver, certain basic
responsibilities which you take on are
laid out in section 37 of the Insolvency
Act 1986. The elementary provisions
are that you are liable under contracts
entered into by you in the performance
of your functions. This doesn’t limit
liability for any actions outside your
basic functions.
Other basic provisions are that you
have the right to indemnity out of the
assets of the company; and that you
are not liable for receiving money
which has been wrongfully obtained
by the company, so long as you were
unaware of the wrongfulness at the
time.
The entire point of a receiver is to
absorb liability and risk on behalf of
the lender, Barker emphasised. That
means that you can never be in a
better position than the lender.
Barker referred to the Cuckmere Brick
case which addressed the fundamental
role of the lender or mortgagee. The
mortgagee can put his own interests
ahead of those of the borrower or
mortgagor, but still has the duty to
obtain the best price reasonably
obtainable at the time. The Law
provides a high hurdle for anyone
claiming against the mortgagee in this
regard.
The Palk case highlighted the duty
of the mortgagee to account for any
shortfall in the proceeds of sale. This
demonstrates the need to separate the
question of the lender’s exercise of the
power of sale from the way the sale is
implemented, which might be open to
a claim of professional negligence.
The receiver’s duties are different.
As set out in section 109 of the Law
of Property Act (1925) , you are the
agent of the mortgagor unless the deal
provides otherwise. “That agency is
a special device for providing some
distance between the lender and the
management of the assets,” Barker
said.
That mechanism can fail when the
mortgagee interferes unduly with the
process of receivership and makes you
his agent. That’s more of an issue for
the lender than the receiver, Barker
noted, but you should be aware of the
risks of interference.
The special character of the receiver’s
role was also highlighted in the Silven
Properties case. Because you are
appointed by the lender, your prime
obligation is to the lender, even though
you are acting for the borrower.
You may also become liable for other
duties, as in the Medforth case where
receivers took over the management of
a farm.
The essential distinction is between
decisions taken within your discretion
which will have no effect on liability,
and decisions which fall within your
duty to fulfil normal professional
standards.
“Receivership is no more or less
hazardous in terms of liability than
any other area of professional
activity,”
Barker emphasised.
“In essence, it’s simply a question
of performance of professional
services for a client.”
Barker also addressed situations
where receivers find themselves facing
intimidation or even violence from
angry and possibly unscrupulous
borrowers or creditors. The best course
of action is to contact the police as
soon as possible.
The police are unlikely to act unless
you can provide solid evidence of a
threat of some sort of criminal activity.
But once they do act, the perpetrators
can often be quickly warned off. If not,
you may have to launch a civil action
to gain an injunction, which can be
fraught with delays, cost and legal
uncertainties.
TRAINING DAY SUMMARY EDITION
Avoiding an Incomplete
Disaster
Speakers: John Hughes & Duncan Murray,
Needham & James with Mark Jackson,
Building & Land Guarantees
Being appointed as a receiver to an uncompleted
development can bring a host of extra issues to deal with,
from dealing with suppliers to guaranteeing the integrity
of the buildings.
Duncan Murray, Banking Partner at Needham &
James Solicitors, outlined the due diligence and legal
demands on the receiver. Due diligence begins at the
pre-appointment stage - you need to make sure that the
plans are sound, check against Land Registry and NHBC
(National House Building Council) records, and conduct
all necessary searches.
You will also need to make sure that you have all the
necessary powers. As well as the usual LPA powers, you
need the right as an agent to complete the development,
and the power to take on staff and agents. Assuming that
you have powers without checking is always dangerous,
Murray noted.
On appointment, you will need to notify suppliers,
creditors and Companies House. Make sure that all
correspondence identifies you as the single manager, with
the date of your appointment.
For a residential development, make sure you know how
many plots have been sold, and check that specifications
match up. If deposits have been taken from buyers, check
who has that money. Be aware of long stop dates, and
check the buyer’s right to terminate the deal because of
the developer’s insolvency.
You will also need to address NHBC registration, which
requires that the building meets strict technical standards.
The original builder’s registration is cancelled on his
insolvency.
Other parties involved in the development can also cause
problems. Retention of title issues can arise if a supplier
believes that his terms have
been broken and attempts
to reclaim goods. Funders
may use their step-in rights
in an attempt to make sure
they won’t be left with a
half-completed site. You will
need to check the wording
of collateral warranties, and
agreements with third parties
to make sure you have
the right to use intellectual
property such as architects’
drawings.
Any new funding issues are
usually provided for in a
charge, but problems may
arise over whether the charge
covers all potential sources
of funding. You may be able
to overcome any problems by
taking a fresh charge for any
new funding, although deeds
of priority may be a problem.
Environmental issues are also
a concern, and you will need
to carry out due diligence
with the local authority to
identify contaminated land.
As an appointed agent, you
will have a certain leeway
in terms of liability, but you
will need to be seen as
acting reasonably. Indemnity
insurance can be a good
idea, but can be expensive.
Barker also addressed the
new Energy Performance
Certificate regime, in which
new buildings are rated on
their energy efficiency. When
completing a development,
you will be responsible for
obtaining certification.
Mark Jackson, director of
specialist insurance broker
Building & Land Guarantees,
then argued the case for
receivers to take out defects
insurance when completing a
development. Such insurance
is required by the Council of
Mortgage Lenders for new
residential developments, but
can be harder to obtain after
construction has started.
For commercial
developments, defects
insurance is not mandatory.
It can still be a good idea,
Jackson said, as it can
resolve some of the issues
in the collateral warranty
system. Defects insurance
is easier to transfer to a
purchaser, and does not rely
on proof of negligence.
Finding an insurer can be
a struggle, as the market is
small and most participants
have specific tastes in
what they will and won’t
insure. Arranging insurance
will always require a site
inspection, and premium
prices will reflect risk.
TRAINING DAY SUMMARY EDITION
Denise Ford, Vice Chair of nara
welcomes delegates to our biggest
ever training event.
Conference
Sell-Out
!
d
e
t
c
e
Exp
Chamber of Commerce,
London - bursting at the seams
with nara Delegates!
Nara has a prestigious line-up of
speakers for the spring conference
this year at Haberdashers Hall. With
Angela Knight, Chief Executive of
the British Bankers Association
and a return appearance of Dennis
Turner of HSBC, it is expected that
the event will be sold out very quickly.
It will take place on 14th May, and if
you are intending to come, please
download a registration form from
the website and return it to the NARA
office as soon as possible.
TRAINING DAY SUMMARY EDITION
Hard
Taskmaster
Sets Out His
Demands
Speaker:
Ray Hugill, Bradford & Bingley
All lenders have strict expectations on what they
expect from their LPA receivers, but possibly
none more so than Ray Hugill, chair of the
Arrears and Possessions panel of the Council of
Mortgage Lenders and head of credit and fraud
at Bradford & Bingley (and now working for the
government).
“LPA receivers I’ve done business with would
say there’s no harder taskmaster within lending
financial services than me, as to what my
expectations of a receiver are,” Hugill said.
To meet Hugill’s expectations, you must provide:
•
National presence. That doesn’t necessarily mean offices across
the UK, but you have to be in a position to appoint local
management agents, letting agents and asset managers as
appropriate. Tapping into the lender’s network is an efficient way
of doing this.
•
Property expertise. The most basic requirement is the ability to
assess the character and location of a property, and to give a
realistic valuation. You should also consider exposure, in terms
of what other properties in the area are empty or in receivership.
You should have commercial as well as residential expertise, and
be able to accept instructions “Gone are the days when LPA
receivers can dictate what properties they want and what properties
they don’t,” Hugill said.
•
Good money management. Cost-effective service delivery is key
to getting instructions. You also need to be able to set up and
operate individual bank accounts for each instruction, which can
be a logistical nightmare if getting hundreds of instructions at
a time. Hugill also looks for full accounting on a monthly basis,
and assistance on limiting the growth of mortgage arrears.
•
Problem solving. “I want my receivers to take control and deal
with issues on a day-to-day basis, I don’t want them to be waiting
for instructions,” Hugill said. It’s also important to avoid situations
that could cause adverse PR.
•
Good timekeeping. You must be quick to accept and validate all
appointments, and be able to deal with multiple issues
simultaneously.
•
Qualifications and experience. “I do look for members of NARA,”
said Hugill. RICS membership is a bonus, but the most important
factor is a proven track record.
•
Effective communication. Face to face contact with clients is key.
Negotiation skills are also vital, to manage appointed agents and
arrange payment of arrears.
•
Sound exit strategy. This is probably the most important part for the
lender. The exit strategy should be detailed, considering short
medium and long term positions, and agreed on an individual
basis between the receiver and lender. The strategy must consider
a wide range of factors, most notably valuation, condition,
ongoing costs and potential buyers. Once the strategy is agreed,
you will be expected to manage it to conclusion. Exits should be
timely, and delivered within 6-8 weeks.
•
Management information. Providing detailed information
on the number and state of your instructions is key. Hugill said
he is particularly interested in data on what the lender is receiving
as a percentage of calendar monthly instalment, as that will affect
capital requirements under Basel II regulations. You should also
be able to provide information on your income and expenditure.
•
Value-added activities. Finally, Hugill said he wanted his receivers
to provide input into his own bank’s recovery procedures, as
well as market intelligence, updates on changes in regulation,
regular review meetings, and training sessions for bank staff.
TRAINING DAY SUMMARY EDITION
INTRODUCING
YOUR COUNCIL:
Anthony Salata
Anthony Salata is a chartered surveyor and arbitrator
and CEDR accredited mediator. He is a member
of NARA, and is an RICS Registered Fixed Charge
Receiver. He has been a principal for over 25 years
and has 33 years experience in the fields of valuation,
investment and development appraisal.
He was a previous Chairman of the Royal Institution of
Chartered Surveyors Dispute Resolution Practice Panel
responsible for Arbitration, Adjudication, Mediation
and Independent Expert work.
He acts as a Law of Property Act Receiver, working
for a number of major UK and overseas banks. He
has experience of project coordination and property
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development and writes on property related matters.
Stuart Jones
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Stuart is a director of Savills, and has been
a development manual on office building design
a Registered Property Receiver for 3 years,
published by the College of Estate Management.
and in that time has handled a diverse range
Anthony has twice in the last three years been
of distressed assets including residential
privileged to be invited to give the annual Blundell
investment portfolios, part built development
Memorial Lecture organised by the Bar, the Law
sites and Chinese restaurants! His 21
Society and the RICS.
years in practice have given him plenty of
experience with which to recognise a fully
As a specialist in office buildings, Anthony is also
fledged downturn when it presents!
very much involved in the market place acting as a
development consultant and in acquiring and disposing
of office buildings as well as negotiating rent reviews.
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TRAINING DAY SUMMARY EDITION
DATES FOR YOUR DIARY!
nara 2009 Conference.
nara Training for Trainees: Fundamentals of LPA Receivership
The nara 2009 conference will be held on 14
May, at Haberdashers Hall, West Smithfield and
will be followed by an evening canapé reception.
Speakers will include Angela Knight, Chief
Executive of the British Bankers Association, and
a return appearance of Dennis Turner from HSBC.
Registration Forms and further details will be
posted on the website as they become available.
th
Following last September’s sell-out ‘Training For Trainees’ event, it is planned to hold a
further session on 26th February in London. Details, and registration forms are available
on the website - www.nara.org.uk
nara Training Days
The November Training Days will take place on Thursday 12th November (Northern
Venue) and Thursday 26th November (London). Further details will be posted on the
website as soon as they become available.
Council 2009
ADMINISTRATORS
Carolyn Hirst
NARA, PO Box 629, Oldham OL1 9HH
Telephone: 0870 600 1925
E-mail: [email protected]
Philip Edwards
ndependent Property Consultant,
13, Uplands Way, Sevenoaks, TN13 3BN
Telephone: 01732 452 958
E-mail: [email protected]
Joseph Pitt
Atisreal UK, 90 Chancery Lane, London, WC2A 1EU
Telephone: 020 7338 4005
E-mail: [email protected]
Moya Somerscales
NARA, PO Box 629, Oldham OL1 9HH
Telephone: 0870 600 1925
E-mail: [email protected]
Mark Fennessy
Orrick, Herrington & Sutcliffe, Tower 42, Level 35, 25 Old Broad Street, London,
EC2N 1HQ
Telephone: 020 7422 4791
E-mail: [email protected]
Peter Rowlinson
Stevens Scanlan LLP, 114-116 Rochester Row, London SW1P 1JQ
Telephone: 020 7834 4806
E-mail: [email protected]
CHAIR
Mark Stupples
King Sturge LLP, 30 Warwick Street, London, W1B 5NH
Telephone: 020 7087 5050
E-mail: [email protected]
VICE CHAIR
Denise Ford
Michael Parkes Surveyors Limited, Reading House, Waterside Court, Neptune Close,
Rochester, Kent ME2 4NZ
Telephone: 01634 294994
E-mail: [email protected]
HON TREASURER
Ian Lerner
Ian Lerner & Co, 10 Eagle Court, London, EC1M 5QD
Telephone: 020 7253 2012
E-mail: [email protected]
HON SECRETARY
Benedict Moon
Atisreal UK, Norfolk House, 31 St James Square, London,
SW1Y 4JR
Telephone: 020 7930 9843
E-mail: [email protected]
COUNCIL MEMBERS
Kerry Bailey
PKF (UK) LLP,
Sovereign House, Queen St,
Manchester M2 5HR
Telephone: 0161 832 5481
E-mail: [email protected]
Peter Beckett
Beckett & Kay, 16 Savile Row, London, W1S 3PL
Telephone: 020 7439 6667
E-mail: [email protected]
Andrew Glynn
TLT Solicitors, One Redcliff St,
Bristol BS1 6TP
Telephone: 0117 917 7777
E-mail: [email protected]
Daniel Hardy
Sanderson Weatherall, 25, Wellington St, Leeds,
LS1 4WG
Telephone: 0113 369 6000
E-mail:
[email protected]
Julian Healey
Lambert Smith Hampton, 17-21 Hounds Gate,
Nottingham, NG1 7DR
Telephone: 0115 950 1414
E-mail: [email protected]
Anthony Salata
Jorden Salata, 33 Cork St, London W1S 3NQ
Telephone: 020 7025 1797
E-mail: [email protected]
Frank Simms
F A Simms & Partners plc,
Insol House, 39 Station Road, Lutterworth,
Leicestershire LE17 4AP
Telephone: 01455 555444
E-mail: [email protected]
Stephen Skinner
Edward Symmons LLP, Park House, Franconia Drive,
Nursling, Southampton, SO16 0YW
Telephone: 02380 741212
E-mail: [email protected]
Andrew Hughes
Alder King, Pembroke House,
15 Pembroke Rd
Bristol BS8 3BL
Telephone: 0117 317 1000
E-mail: [email protected]
Michael Steedman
Rickerbys LLP, Ellenborough House, Wellington Street,
Cheltenham, GL50 1YD
Telephone: 01242 224422
E-mail: [email protected]
John Hughes
Needham & James LLP, One Colmore Row, Birmingham, B3 2BJ
Telephone: 0845 620 9556
E-mail: [email protected]
Peter Wiltshire
CMS Cameron McKenna, Mitre House,
160 Aldersgate St, London EC1A 4DD
020 7367 3000
E-mail: [email protected]
Colin Jennings
Edward Symmons LLP, Ground Floor, Cloister House, New Bailey Street,
Riverside, Manchester, M3 5AG
Telephone: 0161 216 9197
E-mail: [email protected]
Stuart Jones
Savills, Brunswick House, Brunswick Place,
Southampton, SO15 2AP
Telephone: 02380 713969
E-mail:[email protected]
Alistair Wright
GVA Grimley Ltd, 3 Brindleyplace, Birmingham, B1 2JB
telephone: 0870 900 89 90
Email: [email protected]
www.nara.org.uk