For years, California’s cities and counties have faced a conundrum when attempting to have a receiver appointed for substandard properties.
Previously, the California Health and Safety Code § 17980.7(c) required an enforcement agency to provide a “3 Day Notice” to any property owner that they were going to petition the court for the appointment of a receiver.
Then, when filing the petition with the Court, the agency had to provide proof that the “3 Day Notice” had been served alongside the petition. Under new changes to the law, enforcement agencies are now only required to post the property with the “3 Day Notice” and mail it via first-class mail to all people and/or entities with a recorded interest.
Previous Language of the California Code
The previous language of California Health and Safety Code § 17980.7(c) is as follows:
“(c) The enforcement agency… may seek and the court may order, the appointment of a receiver for the substandard building pursuant to this subdivision. In its petition to the court, the enforcement agency… shall include proof that notice of the petition was served not less than three days prior to filing the petition, pursuant to Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure, to all persons with a recorded interest in the real property upon which the substandard building exists.”
The difficulty of serving 3 days’ notice
When dealing with health and safety receiverships it is quite common for a city or county to be unable to determine the current location of a property owner, despite the many resources that are available to attempt to locate these individuals.
Many property owners, for a variety of reasons, will walk away from their property leaving the enforcement agency to deal with the multitude of problems left behind. The previous version of California Health and Safety Code § 17980.7(c) left California agencies with a nearly impossible challenge when the Property Owner was unable to be located.
Serving via publication
When faced with a missing (or deceased) owner, a city or county would often seek permission from the court to serve via publication.
Under the previous version of this section, a city or county would have to serve by publication the “3 Day Notice” before filing the petition. This requirement left these agencies in a procedural dilemma: one cannot ask a Court for permission to serve via publication when no action is pending, yet the receivership petition could not be filed, thereby initiating the action, until the “3 Day Notice” was served.
Further, the previous version of the code was unclear on who should be served with the petition once it had been filed and the action was initiated.
A group of California attorneys who work with various municipalities took it into their own hands to get some clarity on these statutes and rewrite the section. This was presented to the California Committee on Housing and Community Development, and on October 8, 2019, Governor Newsom signed AB 957.
New Language of Code § 17980.7(c)
California Health and Safety Code § 17980.7(c) now reads as follows (with changes to the previous version notated):
“(c) The enforcement agency…may seek and the court may order the appointment of a receiver for the substandard building pursuant to this subdivision. In its petition to the court, the enforcement agency… shall include proof that notice of the petition was posted in a prominent place on the substandard building and mailed first-class mail to all persons with a recorded interest in the real property upon which the substandard building exists not less than three days prior to filing the petition. The petition shall be served on the owner pursuant to Article 3 (commencing with Section 415.10) of Chapter 4 of Title 5 of Part 2 of the Code of Civil Procedure.”
These updated changes have provided much-needed direction and clarity for California cities and counties.
Today, agencies only need to post the property within 3 days’ notice and mail the notice via first-class mail to all people and/or entities with a recorded interest in the property. Three days after the posting and mailing of the notice, the enforcement agency can then file the receivership petition with the court and serve it on the property owner according to the California Code of Civil Procedure § 415.10.
These changes will help streamline the receivership process state-wide and allow a receiver to be appointed over some of the most problematic properties in which a property owner cannot be located.
What Can a Health & Safety Receiver Do?
According to California statutes, the courts give health and safety receivers a significant amount of legal authority to remedy problematic properties that have acquired numerous unresolved code violations or proven to be abandoned or nuisance properties.
This includes the authority to:
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Take full and complete control of the abandoned, nuisance, or otherwise substandard property
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Manage the property, including paying expenses, taxes, insurance, maintenance, utilities, and debts
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Secure an estimate and construction plan from licensed contractors for repairs, renovations, or demolition
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Enter into legal contracts with said contractors
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Collect rents and income associated with the building
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Borrow funds for necessary repairs
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Exercise additional powers granted to receivers under Section 568 of California’s Code of Civil Procedure
Check Out a Griswold Law Receivership Success Story
Our firm is proud to have been involved with the receivership success story on K Street in San Diego. You can download our case study to learn more about how we addressed the dangerous conditions at an abandoned and partially burned multi-family property that had become inhabited by illegal tenants who were at serious risk of illness or injury because of the property.
Videos and Photos of the Abandoned Property
A health and safety receiver can provide the long-desired solution to problematic abandoned properties. Receiver Richardson “Red” Griswold has been appointed by California courts over 200 times across 22 counties to act as a Receiver for substandard properties. For more information, please contact Griswold Law.
(This article was updated and originally published in May 2020)
