STRETTONS RECEIVERSHIP A SELECTION OF CASE STUDIES

Transcription

1 STRETTONS RECEIVERSHIP A SELECTION OF CASE STUDIES

2 While we have undertaken work for conventional lenders and high street banks, over the years we have built up expertise advising specialist lenders, providers of bridging and development finance and dealing with cases involving issues such as fraud, other crime and other insolvency. We have also taken appointments under charges imposed by the courts and acted as expert witness where parties to a charge are litigating against receivers and other professionals. No receivership is straightforward in most cases, if it were, there would be no need for our services. The following cases are examples of the sort of issues that we have to tackle. Warehouse in Norfolk 120,000ft 2 vacant modern food distribution warehouse in a relatively remote location in Norfolk. We identified a food industry user who was prepared to buy, but there were issues with identifying boundaries, rights of access and service routes which all had to be resolved. Flats in North West London A substantial Victorian house was converted and extended into attractive modern flatlets. We soon identified a fraud in that the AST s held by the tenants were at rents 10% lower than those shown to the lender. Furthermore, while there were 10 AST s and 10 front doors, there were only 9 flats. The tenants were all foreign with limited English and there were other problems with the building including unconsented alterations and one flatlet apparently having been sub-sold without consent. The borrower made a proposal to continue management with rents paid direct to the lender and we recommended that this should be allowed for a trial period as the costs would be substantially reduced. This was successful and we suggested to the lender that we should be discharged from the receivership. 2

3 SALES WITHOUT CONSENT We have had a number of cases where contracts have been exchanged for sales without the lender s consent. In some cases, these have been by the borrower to connected parties and in one recent case, two flats were forward sold to an investor at a substantially discounted price in order to raise funds quickly. The buyer s lawyer had clearly omitted to seek proof of consent and we were able to void the contract and renegotiate at substantially higher prices to the direct benefit of both lender and borrower. Amusement Arcades and Office Building on Borough High Street Three commercial investments sold by auction plus a prime vacant Cheltenham shop which appeared to have letting potential but was Grade II listed. The configuration made it unsuitable for most retailers. We pursued planning to enhance value but it became apparent that this would be a long and convoluted process and in the meantime, the property deteriorated and the lead was stolen from the roof. Rather than have a planning refusal on record which would have caused blight, we sold by auction. There was a connected loan on a central London office building with upper floors, partly converted to flats without planning or conservation consent. While there was strong interest from developer, we advised the lender to resolve the planning to avoid a substantial discount on price. In the meantime we let the shop to a multiple at 25% above the initial view of rent. With planning in place we sold the freehold by auction at some 20% above reserve and 30% over the initial view of value. There was an additional twist in that the bank lent on the basis of leases to two separate companies at inflated rents. When contacted, the (genuine) tenant companies denied knowledge of the leases. We told the tenants that only if they reported an alleged fraud to the police, would we accept that they were not liable. They were reluctant to do this because of the time and cost involved. Eventually we obtained certified copies of the directors signatures, which proved that the leases were fraudulent. 3

4 CONTAMINATION Farm in Essex A farm in attractive Essex Countryside where a proposed sale collapsed because of contaminated waste dumped in a pond. We commissioned reports, identified the source of the waste and as a result proved that the borrower had allowed the waste to be dumped, presumably in return for payments. The dumper was found to be connected to the prospective buyer who had presumably been trying to depress the price. In addition there were issues of personal liability of the receivers for the contamination. Underground Caverns A sheep farm in north Wales with views over the Dee Estuary, with 2½ acres of underground caverns in area of the highest level of Radon concentration. While a derelict Grade II listed 16th century farm house and the sheep farm and were relatively simple to deal with, notwithstanding the numerous disused lead mine workings, identifying uses for the caverns was a challenge. South Wales Industrial A 13 acre industrial estate, largely let but with the mains power supply having been cut off due to an allegation of power theft and no quick or simple means of getting it reconnected. In the meantime, power was supplied by generators with constant breakdowns. In comparison, the sewage farm next door, inadequate drainage, flood plain and Japanese Knotweed were almost inconsequential. A related loan was of a country estate of 72 acres of park land containing a loveley but poorly maintained Grade II Listed, John Nash House, a 20,000 ft2 fishing lake, a market garden and various derelict Grade II listed outbuildings. 4

5 Mosque A commercial building in NW London which had been converted (without the lender s knowledge or consent) to a mosque. We had to find a resolution without disturbing the religious use but dealing with numerous problems in other parts of the building. East London Development Site A 20,000ft 2 building operating as a clothing factory but with major roof leaks, with planning consent for 73 flats. It was necessary to resolve claims for water damage by the occupier, s106 negotiations, issues with underground power cables, and then negotiate possession in order to attract a developer buyer. West Wales Farm Land 87 acres of farmland, moorland and woodland in 3 holdings subject to Farm Business Tenancies and cropped so with the need to sell at the right time of year to get the best value. Converted Grade II Listed Water Tower in Kent. There weren t really any issues with this property apart from the very unusual nature of the construction but we just loved the photos and the drone aerial video that we commissioned to assist the marketing! 5

6 Agency Auctions Property Management Valuation & Advisory Services RECEIVERSHIP TEAM Benjamin Tobin Chartered Surveyor & Registered Fixed Charge Receiver Apart from being Chairman of Strettons, Ben s time is largely spent in Property Receivership incorporating advice to both lenders and borrowers with experience in cases involving fraud and negligence, as well as advising high net worth individuals on property investment and other matters. He has considerable experience in advising charities on property matters and was one of only two chartered surveyors in the UK on the Charity Commission Panel of Receivers and Managers. Past Member of the IPA/RICS Joint Registration Committee for Fixed Charge Receivers. Member of Asset Recovery Working Group of the Fraud Advisory Panel and Charity Law Association. Paul Joseph Chartered Surveyor Paul is an Associate Director in the Development Consultancy team advising private developers and housing associations and specialising in valuation of affordable housing. Paul also takes appointments as LPA/Fixed Charge Receiver. Simon Tilsiter Chartered Surveyor & Registered Fixed Charge Receiver Simon leads the Management Department in property portfolio management, professional work, tendering for and setting up new instructions. Additionally, Simon acts as LPA/Fixed Charge Receiver James Bacon Chartered Surveyor James specialises in Property Asset Management and works with clients on re-gearing leases, advising on change of uses and development options, as well as engineering tenancy changes to a client`s portfolio. Separately, he also takes appointments as LPA/Fixed Charge Receiver. 6