On the receiving end
A recent judgment highlights the importance of considering the legal constraints on receivers in selling properties, particularly where security is taken using standard home-loan security documents. Kenneth Egan assesses its impact
The continuing fallout from the financial crisis has yielded a number of superior court judgments in the recent past on the topic of receivers’ sales.
A recent Court of Appeal judgment highlights the importance of considering the legal constraints on receivers in selling properties, particularly in circumstances where security is taken using standard home-loan security documents.
In May 2023, the Law Society’s Conveyancing Committee issued a note regarding the High Court judgment in Bank of Ireland Mortgage Bank v Hade (Hade), which concerned the enforcement of security by a receiver over a number of properties.
The High Court found that court orders for possession and sale should have been obtained by a receiver in relation to certain properties, and made an award of damages against the receiver concerned.
It was noted then that the High Court judgment was under appeal and that the Land Registry was considering the impact of the judgment.
A Court of Appeal judgment in Hade issued on 7 December 2023, and leave to appeal that decision was refused by the Supreme Court on 29 August 2024. The Land Registry amended its legal practice direction on ‘Transfers of registered land’ on 10 July 2025, relating to receivers’ sales of property owned by individuals.
This article uses ‘borrower’ and ‘bank’ for ease of reference to registered owners/chargors, and charge-holders respectively.
Receivers taking possession
The Court of Appeal in Hade reversed the High Court and restated the law as it would have been understood by practitioners as regards receivers taking possession of charged property – there is no general legal requirement for a receiver to obtain a court order prior to taking possession of a secured property where they are entitled to do so under the terms of the relevant charge.
There may be circumstances, of course, where a receiver would be well advised to seek such an order.
This article addresses the remaining issue of the extent to which a receiver must obtain a court order before a sale of a charged property.
Statutory background
- Section 100 of the Land and Conveyancing Law Reform Act 2009 sets out the default position that a court order must be obtained prior to a bank exercising the statutory power of sale granted by that section (see section 100(1)) absent borrower consent (see section 100(2)). There was no pre-2009 equivalent to this requirement, and so the considerations in this article apply to post-2009 act charges only.
- This requirement can be excluded by the terms of a charge if that charge is not a ‘housing-loan mortgage’, as defined in the 2009 act (section 96(1)).
- Section 108(3) of the 2009 act permits a receiver to “exercise any powers delegated by the mortgagee or other person to the receiver”.
- Section 108(4) requires that a power delegated to a receiver “shall be exercised in accordance with this chapter” and, so, if a receiver exercises a delegated power of sale, then they are bound by the restrictions in the 2009 act that apply to sales by banks.
Forms of charge
Practitioners will be aware that receivers do not have a power to sell property solely by virtue of their appointment – a power of sale must be granted by the charge.
The General Housing Loan Mortgage Conditions document (published originally by the Irish Banking Federation and now by Banking and Payments Federation Ireland) is widely used in residential lending transactions. In this document, the borrower and the bank are expressed to ‘delegate’ a power of sale to the receiver.
In addition, this document does not seek to exclude section 100 of the 2009 act. This is as would be expected, as this form of charge is typically used for “housing-loan mortgage” transactions, and so an attempt to exclude section 100 in a routine home-loan transaction would be in vain.
Commercial charges typically grant a power to sell directly to receivers and exclude the application of section 100.
The Hade judgments
The IBF/BPFI forms of charge appear to have been used to take the security that became the subject of the Hade litigation.
The High Court in Hade found that the receiver should have obtained a court order prior to his sale, based on the court’s finding that the parties had agreed that the charges would be treated as “housing-loan mortgages”, but the better analysis might have been that (a) the relevant mortgages did not exclude section 100, and so the requirement under that section for the bank to obtain a court order applied by default; and (b) the receiver was similarly required to obtain a court order under section 108(4) as he was exercising a power of sale delegated to him.
The receiver did not appeal the High Court’s finding regarding the requirement for a court order for sale, and so the Court of Appeal judgment did not focus on this point.
It is noteworthy that the High Court awarded damages against the receiver in respect of the receiver’s sale of certain properties in the absence of a court order, and while this award was reversed on appeal on the facts of the case,
Hade demonstrates that receivers are at risk if the correct procedures regarding sales of property are not followed.
Land Registry
Section 12 of Tailte Éireann’s practice direction ‘Transfers of registered land’ deals with transfers by receivers of property owned by individuals.
The July 2025 amendment to section 12 adds the following text: “Note: If the charge states that the Receiver so appointed shall have and be entitled to exercise all powers conferred by the Act and in addition, pursuant to section 108(3)(c) of the Act, the Mortgagor and the Secured Party delegates additional powers to any Receiver (including selling the property) and the Deed of Transfer states that the Receiver is acting as agent for the borrower pursuant to Section 108(3)(c) of the 2009 Land and Conveyancing Law Reform Act then paragraph 6 above applies to these transfers.”
The reference to ‘paragraph 6 above’ is to the registry’s requirements on a sale by a bank as owner of a charge – critically that evidence of a court order for sale should be provided.
Therefore, if the receiver’s power of sale is by way of a delegated power from the bank, then the registry’s procedures as applied to sales by charge holders will apply if it is patent from the deed that the receiver is acting under such a delegated power.
Kenneth Egan is a solicitor and member of the Law Society’s Conveyancing Committee.
While every effort has been made by the author to ensure the accuracy and reliability of the information contained in this article, he does not accept any responsibility or liability for any errors, omissions, or consequences arising from its use. The content is intended for academic purposes only and does not constitute legal advice.
Lessons from the Hade case
- Before a receiver undertakes a sale process, and before a purchaser commits to purchase a property from a receiver, the terms of the charge being relied on should be carefully examined.
- If the charge does not exclude section 100 of the 2009 act, then a court order or borrower consent is required for the bank to sell, or for a receiver to sell under a delegated power from the bank. This is regardless of whether the property is residential or commercial.
- In a sale by a receiver of the property of an individual where section 100 is excluded, and where the receiver is relying on a power of sale delegated to them in a charge, then to satisfy the Land Registry, a purchaser should seek the proofs as to the validity of the exclusion of section 100 addressing the relevant ‘consumer’ and ‘housing-loan mortgage’ points, as described in the Conveyancing Committee’s May 2023 note.
LOOK IT UP
CASES:
LEGISLATION:
LITERATURE:
- Bank of Ireland v Hade (guidance note from the Law Society’s Conveyancing Committee, 12 May 2023; see www.lawsociety.ie/news/ news/Stories/bank-ofireland-v-hade)
- ‘Transfers of Registered Land’ (practice direction from Tailte Éireann, December 2009; updated April 2013, August 2017, September 2017, April 2018, August 2018, and July 2025; see: tailte.ie/practisedirections-transfers-ofregistered-land)
- General Housing Loan Mortgage Conditions (Banking and Payments Federation Ireland, version 1.2, 2018)