How a Receiver Addresses Co-Owner Disputes Over Rents & Profits of Investment Real Estate

When an investment property is mismanaged by one or multiple partners, it causes countless problems. In addition to jeopardizing the relationship between the partners, this failure also puts the property at risk for lost profits. 

How Does Mismanagement Affect Property Owners?

If you are a responsible partner stuck in a business relationship with someone who is behaving recklessly, irresponsibly, or negligently, you are probably already experiencing the risks we are discussing in this section.

Property mismanagement may lead to unsatisfied tenants, early termination of leases, lawsuits and legal expenses, unnecessary vacancies, and abandonment issues. Often, distressed properties are as bad as they are because of someone’s poor management. 


Responsible partners lose time and money as they try to address the shortcomings of their business associates. This can be an incredibly frustrating experience! 

Asking the Courts to Intervene

Often, when people think about court-appointed receivers, they may think about Health & Safety receiverships. However, that is just one kind of receiver; receivers can also intervene in instances of business disputes.  


If you are dealing with the fallout of your partner’s poor property management or accounting habits, it may be time to ask the courts to intervene. 


A court-appointed receiver serves in the interest of all stakeholders on behalf of the court, and that means that they want to make sure that all of the legal obligations are fulfilled within the partnership. Another goal is to ensure that the distressed property is managed correctly and is both livable and profitable again. 

The Receiver’s Responsibility

If appointed by a judge, the receiver can take control of the property and address countless issues that could have built up over time. 


Clean up accounting records: One of the first tasks that a receiver will undertake is to get the books in order. An evaluation of the property’s financial history allows the receiver to find mistakes or intentional malfeasance and begin to fix the issues. 


Preserve the property during a lawsuit: During legal proceedings, it is likely that none of the partners should be managing the property. That means that the best choice is for a receiver to take control of the day-to-day operations of the property. This includes maintenance, security, rent collection, eviction proceedings, and general property improvements. 


Protect or liquidate the business’s assets: Every receivership is unique. Receivers bring professional knowledge and experience to their performance. Depending on the directions of the court, they may prioritize preserving business assets, or they may be tasked with liquidating those assets. 


Serve as the “eyes and ears” of the court: The receiver’s newly established intimacy with the business that is being disputed means that they are able to serve as the court’s eyes and ears. What they see, the court will see. What they learn, the court will learn. That is one of the reasons why responsible partners sometimes request a receiver while in dispute with their partners; they know that they are doing the right thing, and they want the courts to see it, too. 

Is Receivership the Right Solution for Your Dispute? 

To determine if receivership is the right solution for a dispute you are having with your business partner involving investment real estate, now is the time to reach out to Griswold Law. We serve as business dispute receivers, health and safety receivers, provisional directors, partition referees, post-judgment receivers, and more. 


We’re available to answer your questions about receiverships and how they can be used to settle business disputes like the one you find yourself in today! 


Contact Griswold Law to set up a time to talk.

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