Abandoned properties don’t resolve themselves. California has several laws governing the management of distressed properties, including the role that court-appointed receivers can play in the rehabilitation of such properties. A court-appointed receiver is a neutral third party whose role it is to manage real property that is in distress or disputed between multiple parties.
When a property is abandoned, a court-appointed receiver can step in to oversee the remediation of the property or determine that the best course of action is to demolish it. Court-appointed receivers carry out the decisions of the court. When it comes to abandoned properties, court-appointed receivers follow state and local laws and regulations to eliminate health and safety risks to the community.
We recently wrote about some of the latest updates to California’s laws that govern abandoned properties within the state.
Code enforcement officers are on the front lines of addressing abandonment in our communities. Unfortunately, they are also the frequent target of violence, harassment, and threats in the course of performing their job responsibilities.
To address these risks, SB 296 in 2022 was designed to implement risk reduction protocols, which are necessary to protect California’s code enforcement workers.
Predatory landlords often disregard rules and regulations, including those that govern short-term rentals like Airbnbs. In 2022, the state provided a mechanism to fine predatory landlords 5x more than previous rates, thus discouraging them from irresponsible behaviors and short-term rental leasing.
These rules should also discourage landlords from allowing their properties to become distressed or neglected, including motels, hotels, and multi-family units.
In addition to following and enforcing these newer laws, there are more ways that municipalities can address abandoned properties.
Well-trained and equipped code enforcement: Local governments can use code enforcement tools to compel property owners to maintain properties that are abandoned, blighted, or otherwise dangerous to the community. When a building has become a public nuisance, local governments have a right to address the public threat. This includes issuing fines, citations, and orders to repair, as well as demolishing or cleaning up properties.
Tax sales/tax deeds: According to the California State Controller: "Property becomes tax-defaulted land if the property taxes remain unpaid at 12:01 a.m. on July 1st. Property that has become tax-defaulted after five years (or three years in the case of property that is also subject to a nuisance abatement lien) becomes subject to the county tax collector’s power to sell to satisfy the defaulted property taxes. The county tax collector must attempt to sell the property within four years of becoming subject to sale. The county tax collector may offer the property for sale at public auction, a sealed bid sale, or a negotiated sale to a public agency or qualified nonprofit organization.”
Land banks: Local governments may create land banks to take ownership of nuisance properties plagued with abandonment, code enforcement, and blight. When ownership is transferred to the land bank, new owners take over the responsibility of repairing and maintaining it.
Foreclosure: When a property owner defaults on their mortgage, the lender can foreclose and take back or sell the property. This can help put abandoned and nuisance properties into the hands of new, responsible owners.
Abandoned building ordinances: Cities can create ordinances that require all property owners to register vacant properties, maintain minimum standards, pay fees to the city, and maintain safety plans such as implementing security measures.
Affordable housing programs: Local programs aimed at creating affordable housing may provide incentives for private entities to take ownership of abandoned properties to return them to use.
Health and safety receivers/Abandoned Property receivers: Depending on the specifics of the property you are seeking to address, a municipality may be able to petition the court to appoint a Health & Safety Receiver or an Abandoned Property Receiver.
Court-appointed receivers have extensive authority, provided by the courts, to remedy problem properties.
Among other things, they can:
Learn more about the ways that a court-appointed receiver can remedy these dangerous properties in this video from Griswold Law.
An 8-unit apartment building located in El Centro, Imperial County, California had been abandoned and left in severe disrepair after being heavily vandalized and used by squatters and for illegal drug activity. The property had been completely stripped of anything of value, including wiring, air conditioning units, copper piping, and appliances.
A receivership was established to rehabilitate the property, and nearly $400,000 in outside funding was secured to address the property. Due to the property’s history and poor condition, on-site security staff was required during the receivership period to secure the premises. After extensive repairs and renovations, all overseen by Richardson “Red” Griswold and his experienced team, the apartment building was restored to finished condition and sold to an investor who intends to provide local housing.
The receivership and rehabilitation project successfully transformed an abandoned, hazardous property into viable apartments for the community.
Check out Griswold Law’s free whitepaper on abandoned properties
and how the receivership remedy can help to resolve them.
If you have questions, reach out to our experienced and knowledgeable team of receivership professionals at Griswold Law.