Receivership is one of the remedies available to creditors in the case of a default on a credit contract. A receiver may be appointed under the terms of a private contract itself, or by a court or under certain statutory provisions such as the Companies Acts or the Land and Conveyancing Law Reform Acts. Under those statutory provisions and also under more general contract law, there are certain duties on receivers including, as provided for in section 103 of the Land and Conveyancing Law Reform Act, when exercising the power of sale to ensure, as far as is reasonably practicable, that the mortgaged property is sold at the best price reasonably obtainable.
The Central Bank, as part of its Residential Mortgage Arrears and Repossessions Statistics statistical series, publishes certain data on the number of receivers appointed in respect of residential buy to let mortgages. The most recent data, which is in respect of the second quarter of 2020, indicates that rent receivers were appointed to 57 buy to let mortgage residential mortgage accounts, bringing the stock of accounts with rent receivers appointed to 5,035 (https://www.centralbank.ie/docs/default-source/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears/residential-mortgage-arrears-and-repossession-statistics-june-2020.pdf?sfvrsn=6). However, neither my Department nor the Central Bank has a role in relation to the regulation or operation of receivers.
However, it should also be noted that, in relation to the wider consumer protection perspective, the Consumer Protection Code 2012 sets out an arrears handling framework that applies to mortgage loans on non-primary residence properties (e.g. buy to let/investment properties) where such properties are not the only property owned by the borrower in the State (where a buy to let or investment property is the only property owned by a borrower in the State, then the protections of the Code of Conduct on Mortgage Arrears 2013 will instead apply).
The Consumer Protection Code provides a suite of protections that regulated firms must comply with including:
- requirement for written procedures for arrears handling;
- extensive provision of information and communication requirements; and
- requirements regarding revised repayment arrangements.
The Code also specifies that a regulated entity must seek to agree an approach that will assist the consumer in resolving their arrears situation, and the overarching principle that a regulated entity must act honestly, fairly and professionally in the best interests of its customers, also applies.