Fixed Charge Receivers are appointed on hundreds of properties a year. These assets can be wide ranging in nature; flats, houses, industrial, retail, offices, land, barns… (the list goes on) but can also vary in physical state of repair and level of legal and regulatory requirements.
It could be said that, amongst a host of duties and responsibilities, one of the hardest and most scrutinised challenges facing receivers is their duty to achieve ‘best value’ at the date when the assets are sold. With this responsibility comes many decisions about the property. As a residential property agent these queries often encompass items relating to planning, building regulations, tenancies and refurbishment/building works. However, another critical aspect of achieving this is the actual marketing campaign and most suitable route to market. Rightfully, Receivers want answers as to how to most appropriately market assets.
Glatt Vs. Sinclair (2011) demonstrates the importance that agents play in helping Receivers fulfil their duty of care. This case relates to a challenge over the price at which an asset was sold by an estate agent on behalf of the Receivers. In this particular scenario the court of appeal held that there was no evidence to show that the defendant had properly considered the market and the most appropriate marketing strategy. For us this can include advice on appropriate methods of sale, asking prices, sales particulars, exposure to advertising mediums, length of marketing campaign etc.
Our broad experience, knowledge of complex cases, and far reaching and extensive databases ensure that we are well placed to assist Receivers. Detailed due diligence translates into thorough sales particulars and is paramount in understanding the exact nature of a distressed residential investment or development. All of the cases that we have dealt with have had their own unique issues. Allsop can offer a very cohesive and collaborative approach ensuring clients can benefit from the experience of numerous teams. A prime example of this was the joint marketing campaign, between our residential investment and City investment teams, of a mixed use property in Old Street, Shoreditch. What we have learnt is that the power of quality databases is critical to identifying a market and unearthing a buyer that can complete on difficult transactions.
On behalf of the Receivers, our Residential Development team were involved in the sale of a part-built residential development in Sunningdale to a London based developer. A tough market to be finishing four ‘luxury and bespoke’ homes in a micro-market not exactly known for its affordability. This is a prime example of an asset that came with a distinguished local reputation. It took time to sift through potential buyers and find that one investor/developer (often these do not go hand-in-hand) that would be happy to complete and potentially rent the end product, allowing time for the local market to pick up. Detailed preparation of the exact nature of the asset was paramount in presenting this to the market.
The sale of two blocks of flats in Newquay, littered with planning restrictions, outstanding building regulation works, management intensive tenancies and rolling refurbishment programmes showed the importance of a large buyer pool (both sold to London investors that sighted an opportunity within the local market). My sale of 14 houses and 56 flats in Lincoln, a block comprising 11 flats in Northampton, and a cul-de-sac comprising 10 houses in Willenhall were all sold to local investors, which were all sourced via our extensive reach. These examples go some way towards highlighting the importance of an agent with an extensive buyer pool.
An additional attraction for Receivers is the hybrid marketing approach that Allsop often undertakes; joint between residential and commercial private treaty investment and development teams and auction teams. Of particular note was a £12.5m mixed use investment in Cricklewood with development potential and the sale of a retail parade with offices above for £6.5m in Orpington. These were joint sales between our private treaty residential and commercial teams, proving the exposure that such marketing strategies can create.
Fortunately for Allsop the list of sales on behalf of Receivers is extremely extensive. Along with the power of our vast databases of active investors/developers and being the number one auction house, the careful preparation and consideration for each marketing strategy that we undertake has stood us in good stead. We should be well placed for the next wave of distressed assets.
