Receivership Level 2- Leasehold Flat

Question 1

Talk me through your receivership appointment on the leasehold flat in London?

Answer 1

I was appointed over a one bedroom leasehold maisonette over ground and first floors in London who was occupied by a tenant on an AST.

I carried out a conflict check

I reviewed the deed of appointment

I formally accepted the appointment to receivers and solicitors in writing within 24 hours

I reviewed the validity report provided by solicitors.

I notified the borrower, property managers and tenant of our appointment

I placed the property under insurance policy

I carried out due diligence and had regard to the lease as well at the AST.

I spoke to local agents to establish rent and guide price.

I drafted the strategy report and issued to the client with the recommendations and the property was entered into auction.

The borrower contacted me prior to the auction date and said he was going to refinance. I updated my client.

The borrower refinanced, the property was withdrawn from auction. The receivers ceased to act and notified all parties in writing, the solicitors distributed funds.

Question 2

Describe the property?

Answer 2

One bedroom split level maisonette in Lambeth near Tulse Hill Station
forms part of a 5 storey period building.

The property was Victorian, bay windows, timber sash windows, pitched roof.

Internally the property was in good condition.

Question 3

What did the local agents say?

Answer 3

the subject property is situated on a busy road and does not benefit from outside space and is also on split level which may deter some owner occupiers.

However there is good level of demand for one bedroom flats in the area from owner occupiers and tenants.

Question 4

What is included in the outcome statement?

Answer 4

Receivers fees, solicitors fees, insurance fees and disbursements, property management fees.

Question 5

what’s a redemption statement?

Answer 5

tells you how much you have left to pay on your mortgage.

Question 6

Why was auction the most appropriate disposal method?

Answer 6

property was occupied by a tenant on a new 12 month AST therefore the most likely buyer would have been an investor.

Question 7

did the property have ground rent or service charge?

Answer 7

yes nether were onerous and market norm

Question 8

How long was left on the lease?

Answer 8

120 years

Question 9

How much was the tenant paying on the AST?

Answer 9

£15,000 per annum

Question 10

How did you appraise this property?

Answer 10

Looked at VP and recently let comparable evidence

investors seeking 6% return

capitalised ERV - £250,000
VP value - £325,000
15% discount for VP - £270,000