Improving customer outcomes using LPA Receivers 25 th

Improving customer outcomes using LPA Receivers 25 th April 2018 Tom Black Senior Associate – Eversheds Sutherland Sue Joy Head of LPA and Property Management - Savills

Introduction

Introduction ─ Tom Black • Head of Equity Release contentious team • Specialist team sitting within wider centre of excellence for financial services dispute resolution • Full spectrum – BAU litigation to complex • Regulatory advice – MCOB etc… • Remediation and strategic advice ─ Sue Joy • Head of LPA and Property Management • Part of Savills Property Solutions Department offering Asset Management and LPA services to mortgage lenders and private clients • Savills provides LPA services for all asset classes • Flexible and creative approach to non-standard appointments Eversheds Sutherland | 14 September 2021 | 3

What is an LPA Receiver? Practical benefits

What is an LPA Receiver? Practical benefits ─ Agent of the customer • Lender not usually liable for their actions ─ Management of property and tenancies • • Collecting rent Serving notice on tenants Preventing properties being re-let to authorised tenants Disclose information to tenants that lenders cannot ─ Conduct of other affairs • • • Property repairs and maintenance Conducting litigation on behalf of customer – insurance claims Managing building projects Flexibility in dealing with interested parties Obligation to achieve best price where sale is the appropriate option Eversheds Sutherland | 14 September 2021 | 5

What is an LPA Receiver? Legalities and process

What is an LPA Receiver? Legalities & process ─ Power to appoint • Statutory – Law of Property Act 1925 – s 101 (1)(iii) • Contractual – mortgage terms and conditions ─ Default necessary to appoint • Statutory - power of sale must have arisen – s 101(1)(iii) and s 103 • Contractual – power to appoint under T&Cs must be engaged ─ Contractual powers essential for workable LPAR • Power to take possession • Power to sell • Power to carry out repairs ─ Appointed in writing - usually by Deed ─ Avoid interference once appointed Eversheds Sutherland | 14 September 2021 | 7

Improving customer outcomes Practical examples

Improving customer outcomes Practical examples ─ Case Study A • Lender has charge over freehold, subject to long lease over part to difficult family member • Customer deceased – family member causing difficulties – proposed sale at undervalue and multiple complaints • Lender cannot evict family member – bound by lease • Landlord obligations potentially onerous LPAR benefits • Take possession without lender adopting landlord liabilities • LPAR flexibility – meeting at property – frank discussions • Lender removed from LPAR actions – reduces risk for adverse PR • Outcome for customer’s estate improved – property in possession and sold without cost and delay of possession proceedings Eversheds Sutherland | 14 September 2021 | 9

Improving customer outcomes Practical examples ─ Case Study B • Equity Release mortgaged property occupied by an elderly borrower, her son and daughter-in-law • Terms of the loan stated that works to extend the property that had been commenced would be completed within 2 years • The works were never completed and parts of the property were exposed to the elements, threatening the lender’s security LPAR benefits • LPA Receiver met the family on site to review the progress of the works and assess the risk to the fabric of the property • Valuations and marketing advice sought from local estate agent to check the equity position • LPA Receiver worked closely with the borrower’s son to ensure major issues were addressed quickly to protect the fabric of the building • Outcome – no need to gain possession of the property from elderly borrower who remained in occupation throughout Eversheds Sutherland | 14 September 2021 | 10

Improving customer outcomes Practical examples ─ Case Study C • • • Charge over semi detached property Borrower building attached property – becomes terrace Lender threatens to call default and repossess due to impact on value New property part built – building site and impacts value Breach of terms and conditions – not to alter property without lender consent ─ LPAR benefits • LPAR can take over building of new property – finish build and arrange sale of part • Lender can be redeemed in full from sale of new property • Customer outcome improved by: • Avoiding repossession • Avoiding costs of repossession Eversheds Sutherland | 14 September 2021 | 11

Improving customer outcomes Practical examples ─ Case Study D • Equity Release mortgage - detached property • Property vacant for some years resulting in breach of mortgage Ts and Cs • Elderly customer in Local Authority care suffering from dementia • Lender appoints Savills as LPA Receiver ─ LPAR benefits • LPAR liaises with care home – family washed their hands of situation – customer would never leave care home • Personal belongings delivered to the care home • Funds from sale of possessions credited to the mortgage account • Garden tidied and property cleaned and presented to the market • Property sold for 110% of RICS MV: • Mortgage redeemed in full • Surplus proceeds went to care home for fees Eversheds Sutherland | 14 September 2021 | 12

Case clinic Afternoon surgery ─ Room 725 – Level C 7 ─ 2. 00 pm – 3. 00 pm ─ Please drop in and see us! Eversheds Sutherland | 14 September 2021 | 13

Questions? Eversheds Sutherland | 14 September 2021 | 14

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