The Government, has announced that it is examining potential changes to the law to clarify the position of residential tenants where a receiver is appointed to rented accommodation. Concern has been expressed that there is a lack of clarity as to whether a receiver appointed to such a property assumes any of the responsibilities of the landlord or whether he should be solely concerned with recovering value from the asset, as would be conventional.
Recent media reports suggest that there have been a number of instances of landlords demanding that rent be paid directly to them notwithstanding the appointment of a receiver. An example of such a case came before the High Court recently. On their appointment, the joint receivers requested the tenants to pay their rent into a particular account and to cancel any arrangements to pay it to the landlord. However, the landlord directed the tenants to continue paying rent to him in the ordinary way and threatened to evict tenants who proposed putting the rent into an escrow account. The Court was satisfied that the receivers had established that they were entitled to the rent due and the landlord was restrained from preventing the receivers collecting the rent due from the tenants.
Separately, the Irish Banking Federation has published an information leaflet entitled “A Residential Tenant’s Guide to Receivership”. The guide explains that where a receiver is appointed to a residential property which is subject to a lease, the tenant should pay the rent directly to the receiver and should ensure that he obtains a receipt as proof of payment. Once this is done, the landlord cannot pursue the tenant for the rent. Prior to making any such payments, however, the tenant should request a copy of the receiver’s deed of appointment or a letter from the relevant bank or financial institution confirming the appointment. The guide also states that the landlord’s obligations under the lease (e.g. to return any deposit paid to him) remain the responsibility of the landlord and are not affected by the receivership.