Receivership Level 2 - Colnbrook Flashcards
Talk me through your appointment of an industrial unit in Colnbrook?
I was appointed over a vacant industrial unit in Slough
I carried out a conflict check
I reviewed the deed of appointment
I formally accepted the appointment to lenders and solicitors in writing within 24 hours
I notified the borrower of our appointment
I placed the property under insurance policy
I contacted HMRC to see if VAT was applicable to the property
I implemented security measures were taken to ensure the unit was secured as it was vacant
Prior to carrying out an inspection of the property I undertook due diligence
I researched comparable evidence of the property and formed an opinion of ERV and guide price.
I formed a strategy report outlining that auction would be the most appropriate disposal method.
What could be found in old industrial units?
Asbestos
What due diligence did you undertake?
I had regard to an asbestos register before entering into the property, I had regard to the EPC rating, title plan and use class.
I checked the registry and established there was appropriate rights for access.
Why did you establish that auction was the most appropriate method of sale?
Auction market is dominated by cash buyers, It would be unlikely that a buyer would procure finance for this property given the condition and extent of refurbishment works that would need to take place.
Describe the property?
single storey workshop of solid brick construction, under a timber pitched roof covered with coregulated plastic roof.
Internally the property is an open plan light industrial unit with solid concrete floors.
What planning class was the unit?
B2 Light Industrial
What did you consider in your strategy report
I considered undertaking works to bring the property up to standard however there is significant time, cost and risk associated with this and that a purchaser will be better placed to undertake the works.
I approached best in class agents to provide appraisals and marketing strategy.
I was of the opinion that the property in the current condition will appeal to cash buyers and in order to generate the maximum interest in the site we have considered a sale by way of auction. Selling by auction ensures the property is marketed to the widest possible audience nationwide would be the best strategy to redeem the debt in full.
Why do you notify the borrower of the appointment?
Duty of care to the Borrower.
Why was the property in poor condition?
internal inspection of the property, I noted that on the inside the property was in poor condition, works to refurbish the unit had started but not finished. It was not fit for occupation. I also noted that there was lots of soft furnishings that had been left in the property.
Following my inspection I instructed a removals company to remove the soft furnishings from the property, I updated the client and notified the insurance.
Can you always change locks on a commercial property? What if the property was occupied?
If the property was occupied and the borrower was in breech of their lease for example not paying their rent then locks can be changed.
What would you do if you were unsure if the property was occupied or not?
I could undertake a tape test by putting tape on the front door, return a week later and if the tape is in tact I could assume it was vacant. I would change the locks for security purposes and leave a notice on the door with the receivers details.
Why would you change the locks?
Borrower or other people could enter and damage the property, receivers are personally liable.
What was the ERV?
10,000
What was the Market Value
100,000
