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The Conveyancing Committee regularly receives queries from practitioners in relation to receiver contracts.

The committee is cognisant of the fact that receivers, given the nature of their role, have limited knowledge in relation to the property in sale and wish to exclude personal liability.

It is the view of the committee that the contract for sale furnished by a receiver should be reasonably balanced between the protections provided to the receiver in the context of the sale and the rights afforded to a purchaser.

The absolute exclusion of representations and warranties, such that the purchaser receives no protection whatsoever, is not appropriate. Given the extent and variety of the special conditions usually set out in receiver contracts, it is not possible to deal with each condition in this note.

The committee would remind practitioners of its practice note “Purchasing from Liquidator or Receiver” (as far back as September 1986), which sets out the documentation that should be received when purchasing from a receiver.

The committee has decided to provide more general guidance and refers practitioners to previous practice notes on this topic where specific conditions were addressed, namely practice notes issued on:

• 1 December 2017 “Receiver contract special condition unacceptable”,
• 2 June 2017 “No recourse condition in receiver contracts”, and
• 6 June 2014 “Conditions of sales by receivers / mortgagees”.

The view of the committee in relation to specific matters brought to its attention is set out below:

1. Whilst the receiver wishes to exclude some of the warranties contained in the general conditions insofar as they relate to the property, he / she should be willing to confirm matters insofar as it is within his / her knowledge information and belief and from the date of his / her appointment and produce with the contract the best title available.
2. A receiver will wish to exclude personal liability and, subject to paragraph 5 and similar matters, this is acceptable.
3. Provisions whereby a purchaser indemnifies the receiver in respect of third party rights or claims should not, save in exceptional circumstances, be accepted. This type of provision would only be appropriate in very limited cases, for example, where contents in the property are included in the sale and/or a possessory title only is being sold. The condition should be specifically limited in effect to those matters.
4. Special Conditions that prevent a vendor from being bound by a contract prior to completion, whilst at the same time binding a purchaser, should not be accepted. If, for whatever reason, the vendor is not to be bound until completion, then the committee recommends that the purchaser should equally not be bound until completion.
5. Where there are LPT, NPPR and / or Household Charges outstanding, the correct procedure is always, in accordance with the statutory requirements, that the appropriate evidence of discharge is provided on or prior to closing.

   Section 8A(3) of the and Section 10(3) of the respectively provide that a vendor (defined in Section 8A(8) of the 2009 Act and in Section 10(8) of the 2011 Act as including an agent of the vendor receiving proceeds of sale or advising the vendor on the transfer of property), such as a solicitor or a receiver selling as agent, shall pay any NPPR and Household Charge prior to completion of a sale.

   It is an offence under Section 8A(6) of the 2009 Act and Section 10(3) of the 2011 Act for a vendor (as defined) to fail to discharge NPPR and/or Household Charge prior to closing.

   Section 8A(4) of the 2009 Act also provides that a vendor (as defined) shall furnish a certificate of discharge, exemption or waiver from NPPR as appropriate to a purchaser on or prior to closing.

   In the case of LPT, of the Local Property Tax Act, 2012 provides that a liable person shall pay any unpaid LPT before completion of a sale.

   Notwithstanding same, the committee is aware that in practice these liabilities are often discharged from the proceeds of sale. In such cases, practitioners are reminded of the offences under the relevant legislation and the committee recommends that where such liabilities are to be paid from the proceeds of sale, an appropriately drafted undertaking be agreed to address same. Given the already increasing burden on solicitors today, the committee is not minded to suggest that our members provide these undertakings that are now frequently offered by the receiver. Where an undertaking is to be provided by a receiver, it should be clear as to its terms in particular in relation to time. Limitation of liability language should not be included in such an undertaking.  The receiver is personally liable under a receiver undertaking. The contract should make this clear, particularly if there is a general exclusion of receiver liability.

6. On a sale of unregistered title, the receiver should provide a Land Registry compliant map to facilitate the lodgement of the first registration application.  Whilst the receiver should provide the map, it will likely be furnished without representation or warranty and the purchaser will need to consider the map and ensure it correctly depicts the property in sale.
7. Where the property is situate within a multi-unit development or otherwise part of a scheme of development where service charges are payable, the receiver should produce replies to the standard pre-contract requisitions in this regard from the management company or from the agent appointed by the management company. These replies are required to provide the necessary information for purchasers in respect of service charges to ensure that the purchaser buys with all the relevant information in relation to the development and the management company.
8. While the committee recognises that the receiver may not be in a position to provide a planning warranty, all planning documents, including certificates of compliance in the receivers possession and / or held by the owner of the charge, copy warning letters and enforcement notices (if applicable), should also be furnished with the Contract.
9. It is the view of the committee that receivers should provide a letter from the local authority / Irish Water detailing what services abutting on and serving the property, the subject matter of the contract, are in the charge of the local authority / Irish Water. A purchaser is entitled to this easily obtained information and it should not be a cost to the purchaser.
10. Receivers should, on closing, furnish statutory declarations such as Section 72 declarations and family law / civil partnership / cohabitants declarations made on the basis of his / her actual knowledge information and belief having made the appropriate enquires.
11. In relation to the documentation to be furnished by the receiver, the view of the committee is that the following should be furnished:
• A “certified copy” of the deed / instrument of appointment of the receiver,
• Where part only of secured assets are being sold, a “certified copy” of the mortgage / charge can be accepted with the usual undertaking to produce the original in the Land Registry to facilitate registration. Where the entire of the secured asset is being sold, the original of the mortgage / charge should be provided to the purchaser on closing;
• As evidence of the right to appoint a receiver having arisen, if not clear from the mortgage, an appropriately redacted demand letter and / or a statutory declaration made by a suitably qualified person on behalf of the lender confirming that a demand was made and not met; and
• A paper release / discharge of the mortgage / charge dated after date of assurance of the property.