Best price reasonably obtainable—what it means for receivers


Published by a ½Û×ÓÊÓƵ Restructuring & Insolvency expert
Practice notes

Best price reasonably obtainable—what it means for receivers


Published by a ½Û×ÓÊÓƵ Restructuring & Insolvency expert

Practice notes
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The receiver’s duty

The duty owed by a receiver to a mortgagor when selling a property is the same as that owed by the mortgagee to a mortgagor:

  1. •

    in exercising its power of sale over mortgaged property a mortgagee is under a general duty to take reasonable care to obtain the true market value of the mortgaged property at the time the mortgagee chooses to sell it

  2. •

    'True market value' is synonymous with 'the best price reasonably obtainable' and 'a proper price'

  3. •

    a receiver is under the same duty

  4. •

    this duty to take reasonable steps to obtain the best price reasonably available is an equitable duty, not a duty in negligence

Please note that this Practice Note is not concerned with duties which may be owed by receivers other than in the sale of the secured property. For further information on a receiver’s duties generally, see Practice Note: Roles, powers, functions and duties of an LPA or fixed charge receiver.

Risk of challenge—to

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Jurisdiction(s):
United Kingdom
Key definition:
Mortgagor definition
What does Mortgagor mean?

An individual or organisation (eg a company or partnership) that borrows money from a lender (eg a bank) to finance the purchase of a property - eg an individual buying a house using a mortgage is a mortgagor. The legal or equitable title to the property (depending on the specific asset) is transferred to the lender as collateral for the loan (or mortgage).

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