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Important News for all Borrowers


Fixed Charge Receivers may be liable for rates in respect of properties they are appointed on.


Please note that although the Fixed Charge Receiver is appointed by the bank, they act as an agent of the borrower. It has been confirmed by the Land & Property Services that despite prior widespread belief by all professionals in the insolvency/recovery industry, Fixed Charge Receivers can be liable for the rates in respect of properties to which they are appointed.

The key point to confirm liability is depending on whether the property is occupied and who is receiving (or entitled to receive) the rent. In brief if the property is:

* Unoccupied - the ratepayer remains liable for the rates.

* Occupied - (with rent being paid or entitled to be paid) the Fixed Charge Receiver is determined to be the 'owner' and thus liable for the rates.

NB: If the property is not tenanted but a Fixed Charge Receiver is appointed, the ratepayer remains liable for the rates.

If you have been affected, you can contact our team for professional help. We can advise you on your course of action. Please also note that if any recovery action has begun on the accounts, all recovery proceedings can be suspended while we await information to determine who has the liability of the rates.

GDP Partnership welcome the recent stance taken by the Land & Property Services. Due to a lack of affordability on property debt it has been unfortunate that there has been an increase in defaults and the appointment of Receivers.

It has been widely recognised by all professionals that it is unfair and unreasonable that Receivers collect/collected the rent from a property and the borrower is/was then expected to pay the rates. Many borrowers relied on the revenue from the property to pay the rates.

Whilst this will be welcome news for some, for many it has unfortunately came too late. There have been countless Bankruptcy Petitions against borrowers for rates debt by the Crown Solicitor Office on behalf of the Land & Property Services.

In light of this, some unanswered questions now remain. They may explain why this new policy and position has not been publicly announced but been implemented by the Land & Property Services since July 2014.

The main question is, how many injustices have passed through the courts? Are there cases where debtors, who were declared bankrupt, were actually not liable for the rates of which they were being asked?

Equally as important, will the Fixed Charge Receivers repay the rates to the Land & Property Services for the historic property debts to which they are personally liable?

Let's also remember they will have forwarded these funds to the charge holder who appointed them, usually a bank. Will they return the funds to the Receiver?

Whilst we watch these points with interest, in the last 24 hours our team of experts has already saved our existing clients thousands of pounds in respect of rates they thought they owed.

If you have any queries about your property rates, especially when a Receiver had/has been appointed, please do not hesitate to contact GDP Partnership.

Darwin AllenComment