Recovering Debts on a Portfolio of Three Residential Properties in South West London

The borrower was a single professional lady working her way through difficulties with her loan (plus a smaller sub loan). However, the main lender was concerned that it was becoming too much for her to deal with alone. Consequently, they appointed us as receivers to step in, with instructions that we should have a “soft touch” approach initially with a view of supporting the borrower but, ultimately, to recover the loan debt. 

The borrower was initially sceptical towards us but, after we reassured her that in the background of our receivership duties, we wanted to work with her, she came onside. Very soon, we established a good, professional working relationship and were in almost daily contact. 

One of the properties was already under offer, so we liaised with the selling agent to help push the sale through. The two flats were due to go to auction, so with our long-established in-house auction experience, we established an immediate dialogue with the auctioneer to monitor interest and agree on a reserve price leading to successful sales.  

This left the income-producing converted house with four units and an annexe. We had already notified the tenants of our appointment with a view to appointing a local managing agent to collect the rent to offset against the loan.  

The borrower wanted to retain the management as she had a good working relationship with the tenants. Ordinarily, we would be opposed to this but, because of the confidence we had gained with each other, and because the other sales had reduced the loan, we recommended to the lender that, in the short term, she would be allowed to continue with the management to ensure continuity of rental income. Also, after further valuation advice, it was apparent that there was sufficient equity in the property to allow for refinancing with another lender.  

Understandably, the principal lender was concerned that refinancing might have caused delays. However, the sub-lender we had been in contact with throughout and was vulnerable to losing their loan expressed interest in a refinance package. We worked with the borrower and sub-lender to agree on a package within a fairly short time period, which allowed the main loan to be redeemed. 

While the refinance meant that the borrower still had a substantial loan, the refinance allowed her to retain a property that she was particularly keen to keep, which she thought may, in the longer term, offer her potential accommodation in the self-contained annexe. In the meantime, the rental income covered the new loan cost and gave her a small income, which allowed her to get back on track. 

Ms A. J, Borrower

“I was initially opposed to receivers being appointed over my three properties, but the receiver acted fairly and acted as much a mentor to help me push through the sale of two of the properties. He also supported me in my application for alternative funding, which allowed me to retain the third property. So, despite my initial concerns, by the receiver working with me, it was a satisfactory outcome.”