Manchester Conveyancing Solicitors | Ford Banks Irwin Solicitors - The Property Lawyers in Manchester for Assignment of Leases and Business Premises
Please note: Not to be used or relied upon without legal advice. These notes are for illustration purposes ONLY
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Leases and Assignment of Leases
The effect of Liquidation on the Receiver's powers
A Receiver is an agent of the Company. On liquidation this agency comes to an end but the Receiver continues to have power to act for the purposes of holding and disposing of the Company's Property and may use the Company's name for that purpose (Sowman -v- David Samual Trust Ltd [1978] 1 All ER 616).
In a winding-up by the Court, any disposition of the Company's Property after commencement of the winding-up is void unless sanctioned by an Order of the Court (section 127 Insolvency Act 1986). However, where a debenture has been created prior to the winding-up, any subsequent disposition by the debenture holder or Receiver under powers contained in the debenture does not require an Order of the Court.
The provisions of section 238 to 241 and 244 - 245 Insolvency Act 1986 which relate to transactions at an undervalue, preferences, extortionate credit transactions and the avoidance of certain floating charges, may have the effect of invalidating the debenture wholly or in part. If, when an application based on a disposal by a Receiver is being considered, there is any suggestion that the liquidator may be seeking to have the debenture avoided under these provisions, Land Registry may serve an appropriate notice giving an opportunity for objection. If the Conveyancing Solicitors and Property Lawyers for the applicant are aware of any such challenge they must disclose it to the Land Registry when the application is lodged.
If the debenture gives a power of attorney to the Receiver, this power is not a security power and it will be revoked by the winding-up of the Company. However, the right to sell, or otherwise dispose of the Company's Property, will include the right to execute in the name and on behalf of the Company (see section: Execution by LPA Receiver) and such a right will continue after winding-up commences (Barrows -v- Chief Land Registrar, The Times, 20 October 1977.
Release of an estate from mortgages and charges on a disposition by a Receiver
A Receiver is agent of the Company not of the debenture holder (section 44(1)(a) Insolvency Act 1986; section 109(2) Law of Property Act 1925).
A Receiver has no power to discharge the Company's Property from any mortgage or charge, including the debenture, regardless of whether the mortgage and charge was created before or after the debenture.
On a sale by a Receiver the Conveyancing Solicitors and Property Lawyers for the Purchaser must ensure that a release is obtained for all mortgages and charges from which that Purchaser is to take the Property free. This includes the need to obtain a release from the debenture itself and from any mortgages and charges dated after it.
Evidence required to support an application for registration based on a disposition by Receiver
If the application for registration by Conveyancing Solicitors and Property Lawyers is based on a disposition by a Receiver, in addition to the normal evidence, Land Registry will require:
- the debenture or a certified copy of it. [this will already be with the Land Registry if the title is registered and the debenture is registered or noted]. Land Registry will check that the debenture has been registered under section 395 Companies Act 1985, that it is properly executed and that it contains the appropriate provisions to allow the Receiver to be appointed and to carry out the disposition.
- evidence that the power of appointment of a Receiver under the debenture has arisen.
Land Registry will usually accept a certificate by, or on behalf of, the chargee (Mortgagee) that the power of appointment under the debenture has arisen.
If the debenture is dated on or after 15 September 2003, and the appointment is not made by the Court, Land Registry will also require evidence that one of the exceptions in sections 72A to 72GA, Insolvency Act 1986 applies.
- the instrument of appointment of Receiver or a certified copy of it.
If joint administrative Receivers are appointed the appointment must state whether they can act jointly and severally (section 231(2) Insolvency Act 1986).
- a release or discharge from all motgages and charges, including the debenture, from which the applicant is to take the Property free.
If the title is already registered the release or discharge will need to cover only mortgages or charges, which have been protected in the register.
-If the Receiver executes as Attorney, evidence of non-revocation.
- details of any challenge to the validity of the debenture by a liquidator of the Company, including the name and address of the liquidator.
(All italics in this page are Crown Copyright and reproduced here for your information with permission from HM Land Registry)
Please telephone Paul on 0161 866 8999 if you require any further information.
Ford Banks Irwin Solicitors
50 Stothard Road
Stretford
Manchester
M32 9HB
Tel: 0161 866 8999
Fax: 0161 866 8333
E-mail: info@FordBanksIrwinSolicitors.co.uk
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