Tenant’s rights when a receiver is appointed   

A receiver is a person or company appointed by a mortgage company to manage their financial interest in a property.

A lender can appoint a receiver to manage a rental tenancy if

• the court made a possession order in respect of the property, or
• the landlord has fallen behind on their mortgage payments

Most mortgage agreements give the lender power to appoint a receiver if the borrower falls behind on their mortgage payments. The Conveyancing and Law of Property Act 1881 gives a mortgage lender power to appoint a receiver once they become entitled to sell the property. 

The receiver acts as the mortgage lender’s agent. They are entitled to demand the rent for the property. 

Notifying a tenant that a receiver has been appointed

The receiver will contact the tenant to explain its role and responsibilities. The receiver will give the tenant bank account details for future payments of rent.   

Tenants should respond to any letters or messages from the receiver. Otherwise, the receiver may try to end the tenancy. 

Repairs under receivership

The landlord is still responsible for repairs while they remain the legal owner of the property.

The lender becomes responsible for repairs once the judge makes a possession order. The receiver may subcontract repair work to another company.

The receiver can ask the lender for permission to use rent to pay for repairs and maintenance. Environmental health departments can serve statutory notices on a receiver if a property under receivership is unfit or in serious disrepair.

Tenant’s right to continue living in a home under receivership

The appointment of a receiver doesn’t end a tenancy. The tenant can try to negotiate out of the agreement, but the receiver doesn’t have to agree to this.

A receiver will have to honour any existing tenancy agreement, as long as

• the mortgage lender gave permission to rent out the property, and
• the terms of the tenancy did not break the terms of the landlord’s mortgage 

The receiver may let a sitting tenant stay in the property even if they are not required to do so, if this is likely to be in the lender’s best financial interest. This might happen if the receiver thinks it is a bad time to sell the house.

The tenant has a right to notice to quit if the receiver or lender wants them to move out. The notice has to be

• in writing, either as a handwritten notice or some sort of electronic message, and
• given to the tenant least 12 weeks before the date the tenant is expected to move out

Companies based outside Northern Ireland are not always aware of our tenancy law. They may give the tenant a section 21 notice, or insist they move out after 8 weeks. Until May 2022, tenants in Northern Ireland are entitled to at least 12 weeks’ notice of the end of their tenancy.

Contact our helpline if a receiver, lender or landlord has given less than 12 weeks’ notice to quit.

Deposits under receivership

Tenants are often concerned about their deposit when they find out a receiver is now managing the tenancy. There are 2 important things to check.

1. Has the property been repossessed or handed back to the lender?
2. Is the deposit protected with an approved scheme?

The deposit won't be affected until the property changes owners. The landlord and tenant will deal with the deposit as normal when the tenancy ends. The landlord is the legal owner until the property is repossessed or they hand the property back to the lender.

The tenant can ask the deposit company to return the deposit if the landlord no longer owns the property. The tenant should explain that the landlord no longer has an interest in the property. 

The tenant and the receiver can then agree if a new deposit needs to be paid. If the receiver asks the tenant for a new deposit, this should be protected.

The tenant can ask the landlord to return the deposit if the money was not protected. They can take the landlord to court if they refuse to return the money. But, the landlord may already have a long list of creditors and the tenant will simply be added to this. Even if their case is successful, they may never get the deposit back.