For Corporate clients or those suffering business debt issues you may have been advised by a Bank that if your account is not rectified and arrears reduced then a Fixed Charge Receiver (FCR) may be appointed.
Why and FCR is appointed.
Fixed Charge Receivers are appointed once a Banking Institution has chosen to proceed to Recovery on a connection. FCR are basically the Bank’s own Agents, appointed in order to proceed with the sale of property secured to the Bank.
A Fixed Charge Receiver will be chosen from a Banking panel list, shall be given instruction by the Bank to actively market properties on their behalf in most instances and shall give same Bank on-going advices/recommendations in respect of any offers that are forthcoming.
Consequences of having an FCR is appointed.
They can negatively affect your business through a loss of control. The sale converts from a consensual process into a forced sale scenario. This will ultimately reduce the sales proceeds as forced sales typically result in 70% of market value being achieved, this loss in value will reflect on the borrower with a higher shortfall to repay. FCR fees may also be added to your account. Communications from any potential purchasers will go straight to FCR as opposed to through Borrower direct.
Furthermore, any rental income will be collected by FCR directly. They will honour tenancy agreements where they correctly hang together and where there has been consent however may look to change locks where no tenancy agreements in place. Unfortunately, the borrower is still liable for rates if property is vacant even after FCR appointed.
Our experience with FCRs.
In dealing with FCR’s Bell and Company from experience have found it best to be co-operative & maintain communications. We have had some very positive experiences of working with FCR in progressing sales/transactions. It is also good to keep them informed regarding any interest in property/properties & provide all paperwork requested.
Maintaining a positive relationship with FCR can benefit all parties involved.
If you have any Corporate Banking Issues including issues with Fixed Charge Receivers, then please call Bell & Company today on 0330 159 5820 to arrange your free initial consultation. We look forward to assisting you.