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Fixed Charge Receivership or Registered Property Receivership is a cost effective means for securing recovery of property in certain distressed situations. It allows the lender, depending upon the nature of the charge or status of the borrower, to secure speedy control of the asset.
As part of their work Chartered Surveyors and Insolvency Practitioners commonly specialise to become a Registered Property Receiver.
The RICS, Insolvency Practitioners Association (IPA), and the Non-Administrative Receivers Association (nara) have entered into a revised memorandum of Memorandum of Understanding for the Registered Property Receivers Scheme (formally known as the Fixed Charge Receivership Scheme). The Scheme originated in 1999 with the sole objective of accrediting professionals who carry out fixed charge or Law of Property Act receivership work, in order to offer reassurance on the standard of that work to those making such appointments, creditors and the wider public.
Membership of the Scheme is voluntary, and can only be achieved by those who have proven they have the required skills, knowledge and experience to meet the expected standards. In addition, members are subject to an ongoing risk-based monitoring regime and continuing professional development requirements. Registration under the Scheme is the sole mechanism entitling the Scheme member to the designation “Registered Property Receiver”.
All registrants are required to be a member of a relevant professional body, and Scheme members are subject to the disciplinary processes of the professional body of which they are a member; adverse monitoring outcomes and complaint allegations arising through the Scheme will be referred to the relevant professional body for any disciplinary action as may be necessary.
It is arguable that Registered Property Receivership has been unregulated since the introduction of the Law of Property Act 1925. The result of this has been that little or no protection existed to protect the interests of lenders, creditors or other shareholders. Anybody could be appointed as a fixed charge receiver, operating totally outside the scope of the Insolvency Act 1986, leaving potential for defrauding lenders and other creditors.
Recognising this issue an unprecedented step was taken when RICS and the IPA, professional bodies representing two quite distinct disciplines, formed a joint Scheme to accredit professionals who carry out fixed charge or Law of Property Act receivership work.
The Scheme for the voluntary regulation of Registered Property Receivers has proved to be a great success. Indications are that a number of leading banks will now only consider appointing those who are prepared to be regulated by their peers.
The larger the Scheme becomes, the higher its profile - with the distinct possibility that those who were not prepared to be regulated will be effectively excluded from the bulk of the market.
Members of the Scheme are listed on the Scheme website and in the Directory of Registered Property Receivers (published by nara) which has been widely circulated within the industry to ensure that lenders now have access to competent and experienced professionals.