By Sandip Singh, Zoe McLean

Appointing a receiver over an asset enables a lender to exercise a degree of control over a secured asset whilst maintaining a desirable distance from the risks and responsibilities associated with that asset. It can also, if used correctly, allow a lender to deal with the asset and release its value without incurring any liability.

Typically a lender will wish to avoid liability for maintenance and repair obligations, or for licensing and regulatory requirements, where a leasehold property is tenanted. Should the lender take the property into possession with a view to selling the property the lender would in those circumstances, for however short-a time, become landlord to the current occupying tenant.