A Rents and Profits Receivership assists in the enforcement of a mortgage, deed of trust, or related assignment. A rents and profits receivership commonly occurs when a property owner defaults on a mortgage and the lender seeks the appointment of a receiver to protect the collateral while foreclosure commences. Deeds of trust typically provide for the appointment of a receiver and contain an assignment of rents provision to collect rents and preserve the property. A court-appointed receiver has the right to take control over and possess all collateral property subject to the deed or mortgage as directed by the court. A receiver is appointed by the court to collect and secure rents and to preserve and protect the property during a foreclosure.
A receiver takes possession and control of a property in foreclosure when the conditions in the mortgage or deed have not been performed, or where the property is worth less than the debt it secures. Rents and profits from a property is not personal property of the owner but rather real property collateral subject to receivership. A rents and profits receiver takes custody and control of a property and has the authorization to sell it with final court approval. A receiver manages and maintains the property and has a duty to take reasonable efforts to protect and preserve the property. Preserving a property includes, but is not limited to, paying property taxes, insurance and operating expenses, curing any health and safety hazardous conditions, and keeping the property in compliance with building and housing codes. A Receiver not only protects the value and revenue generated from the property, but also effectively curtails any further losses or liability.
A rents and profits receivership is a great tool to enforce a deed or mortgage. Richardson “Red” Griswold of Griswold Law, APC has been appointed by California Courts to act as a rents and profits Receiver for residential and commercial income properties. To learn more about rents and profits receiverships, please visit www.griswoldlawsandiego.com or contact the office at (858) 481-1300.