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A Receiver generally acts as agent of the Mortgagor in collecting income from and disposing of the assets in respect of which the receiver has been appointed.

This Practice Note considers the effect of Bankruptcy or Liquidation on the position of the receiver as agent of the mortgagor and the effect of a receiver losing its position as agent of the mortgagor.

The status of the receiver will be important because it affects

1. •

   the potential liability of both the receiver and the appointing mortgagee for acts done by or omitted to be done by the receiver and

2. •

   how any documentation is structured, ie whether the receiver enters into an agreement as principal or agent of the mortgagor

Where the receiver cannot act as agent of the mortgagor, they will either be acting as principal or, less preferably from the point of view of the mortgagee, as agent of the mortgagee.

For an explanation of the different types of receivers, see Practice