As the name suggests, a fixed charge receiver is appointed by the holder of a fixed charge in the circumstances set out in the loan or security documentation (e.g. on the occurrence of the usual types of events of default found in loan agreements). He will have certain limited powers set out in the Law of Property Act 1925 (‘LPA 1925’) and any additional powers (which are generally fairly extensive and include a power of sale) set out in the security documentation.
A fixed charge receiver becomes the receiver only of the property charged and is only entitled to deal with that property. He is not normally entitled to deal with any other property of the company or to manage the company’s business.
Fixed charge receivers are sometimes referred to as “LPA receivers”. Technically speaking, they are different. Fixed charge receivers are appointed pursuant to powers contained in a fixed charge or mortgage whereas a LPA receiver is appointed under the terms of the Law of Property Act 1925. Most receivers encountered in practice are fixed charge receivers because, as referred to above, this type of receiver has a more extensive set of powers.
A fixed charge receiver cannot be appointed while a pre-insolvency moratorium subsists or if the company is in administration.