Can you refinance to remove LPA receivers from a property?

This guide covers company-owned and investment property only. If you, a director or a member of your family lives in the property, the loan is likely to be regulated and we'd refer you to an FCA-authorised firm. There's more on that in the lived-in property section below.

What is an LPA receiver?

An LPA receiver is a person a lender appoints, usually after a default, to take control of a mortgaged property under the powers in the mortgage deed and the Law of Property Act 1925. Their job is to get the lender's money back.

The deed usually says the receiver acts as the borrower's agent, but in practice they work for the lender. It isn't an insolvency procedure, so the company carries on trading and its other assets aren't touched by it.

LPA receiver vs fixed charge receiver

The two terms are often used interchangeably. The difference lies in where the powers come from.

For refinancing purposes it rarely matters which label applies. Either way, the lender has to be repaid in full before the appointment ends.

What can an LPA receiver do?

A receiver can usually collect rent, insure and manage the property, and sell it. Those powers come from statute and from the charge, so the exact list depends on the wording of your mortgage deed. On a tenanted property, tenants are usually told to pay rent to the receiver instead of the company, and a receiver can sell without your consent if the charge allows it.

Do LPA receivers have to get the best price?

A receiver selling the property must take reasonable care to get the best price reasonably obtainable at the time of sale. They don't have to wait for a better market, and they don't have to improve or develop the property first to push the price up.

What happens after an LPA receiver is appointed?

There's no fixed timetable, though most appointments follow a similar pattern. The receiver writes to the borrower and any tenants, takes control of the rent and inspects the property, then usually instructs agents, gets a valuation and markets it before exchanging contracts with a buyer. How long each stage takes varies a lot. What matters for a refinance is that a sale generally isn't final until the receiver exchanges contracts, so there's often still time to repay before then. Once exchange happens, that window may well have closed.

How does refinancing end the receivership?

A new lender pays off the existing lender in full, the existing charge is discharged, and the receiver's appointment comes to an end. The new loan is normally a bridging loan on the same property, with an exit such as a sale or a commercial mortgage. The mechanics are much like any bridging loan refinance, except that the receiver's costs sit inside the figure you're paying off.

Your redemption statement explained

The redemption statement is what the existing lender needs to release its charge, and it's often higher than borrowers expect. Get it in writing early, as every lender you approach will want it.

It typically includes:

• the outstanding loan balance
• contractual interest to the redemption date
• default interest, which on bridging is often over 2% a month
• the lender's legal costs
• the receiver's fees, plus agents' and other costs they've run up

These figures grow the longer the receivership runs, so check the statement shows a daily rate or an expiry date. Our guide to bridging loan costs covers the new loan's side.

What does a new lender need to see?

A new lender wants to know the property's value, the full amount it's being asked to repay, and how it'll get its own money back at the end. Having the paperwork ready saves days.

A short, honest explanation of the default, backed by evidence the cause has been dealt with, does more for your case than a long one.

Working with the receiver

The cases that go best are the ones that start as soon as the receiver arrives. Waiting to see what happens tends to cost you, because the receiver keeps the sale process going in the meantime, and their fees and default interest keep building.

Talk openly to the receiver about your refinance plan, then keep them updated as it progresses. A receiver who can see a lender, a booked valuation and instructed solicitors is better placed to judge what to do next than one hearing nothing. They still act for the lender and may keep marketing the property, so this doesn't pause the sale, but it keeps everyone working from the same information.

In Ashley's experience, what makes a receiver take a refinance seriously is terms issued by a lender. A plan on its own carries little weight, while terms show there's a real lender behind it.

How fast can a receivership refinance complete?

Some bridging lenders can complete in as little as 2–5 days on a simple, well-prepared case, but receivership cases are rarely simple. The redemption figure can take time to get, and the new lender will want to understand the default before it commits.

Title insurance can bring completion down to around a week in some cases, while full searches typically take around 3–4 weeks. Neither is a promise, and we can't guarantee a refinance will complete before the receiver sells.

How much headroom do you need? A worked example

The test is simple: divide the full redemption figure by the property's value, and compare the result with the lender's limit. Some lenders on our panel will refinance in receivership up to 75% loan-to-value.

Illustration only:

Case A leaves room for the new lender's own fees and interest. Case B is over the limit before any new costs, so the borrower would need to add cash or security, or look at a sale. Exits most often fail because the LTV is too high, so check this figure first.

Buying the property back from a receiver

If a refinance can't be arranged in time, some borrowers look at buying the property through a connected party once the receiver puts it up for sale. Receiver sales usually need a 10% deposit and completion within 28 days of exchange, so the funding has to be lined up in advance. Our guide to buying from receivers explains how that works. Buying back through a connected company may raise legal points of its own, so take advice first.

Disputes: get legal advice

If you think the debt is wrong or the appointment wasn't valid, speak to a solicitor before anything else. That's a legal question rather than a finance one, and we don't advise on it.

Lived-in property: referral

If you, a director or a member of your family lives in the property, or will live in it, a loan secured on it is likely to be regulated by the FCA. Capito doesn't arrange regulated lending, so we'd pass your enquiry to an FCA-authorised firm. Our guide to regulated vs unregulated bridging explains the difference.