How the Receivership Remedy for Commercial Properties Helped This CA City

Business Dispute Receivership

For nearly a decade, the City of Banning, CA had to endure the challenges brought on by six unfinished commercial buildings spread over 9 acres of land located just off the 10 Freeway. 

The problem wasn’t necessarily that the buildings were unfinished, but rather that the unfinished buildings had been overrun by transients and squatters taking up residency within these structures.

The city needed to use the services of a Health & Safety Receiver to eliminate the dangers caused by this abandoned commercial park. Taking advantage of the receivership remedy for commercial real estate made Banning a safer city for all of its residents. 

The Dangers of Abandoned Properties 

Abandoned properties are dangerous to their communities and the people who inhabit them. The presence of these unauthorized residents in the City of Banning had resulted in serious dangers, including: 

  • Hundreds of violations of state and local laws
  • Numerous fires
  • Hazardous conditions
  • Accumulation of garbage and debris

What was once a place of potential future economic growth and development for the city had quickly become a dangerous threat to the health and welfare of the community.

Abandoned and distressed properties increase the risk of crime, fire, illness, pest infestations, and public health issues. If the city left this substandard commercial property area as it was, the city would continue to face increased crime and decreased property values. 

People were displeased by the fact that the property was an eyesore, but the risk to the community’s health and safety was much more important than just addressing a blighted commercial park. 

Appointing a Receiver

In November 2017, the Riverside County Superior Court appointed Richardson “Red” Griswold as the court-appointed receiver to take possession and control of the structures under the City of Banning’s petition. 

Resolving the problems at the Banning commercial park presented a lot of challenges, but Mr. Griswold and his team had the experience and knowledge necessary to make Banning a safer city. 

At first, Mr. Griswold collected multiple bids from contractors who would either rehabilitate or demolish the buildings. Ultimately, the court authorized the as-is sale of the property to a new owner who was contractually obligated to bring the buildings into compliance with the City of Banning. 

The property was sold and Mr. Griswold was discharged, allowing the new property owner to rehabilitate the property within the specified timelines agreed to with the city. 

Unfortunately, this new property owner failed to rehabilitate the property within the specified timelines, thereby breaching the compliance agreement. This breach resulted in the city requesting that the court reappoint Mr. Griswold to retake possession and control of the property. 

Following the reappointment of Mr. Griswold, in November 2019 the Riverside County Superior Court instructed him to demolish the unfinished commercial business park. In response to this order, the property owner filed for Chapter 11 bankruptcy protection to attempt to halt the project. 

After months of bankruptcy litigation, the Bankruptcy Court reaffirmed the State Court's Order and directed Mr. Griswold’s team to carry out the court-ordered duties.

After securing approximately $1M in Court-authorized receivership funding, Mr. Griswold and his team directed the court-approved demolition contractor to begin the project. All six unfinished buildings have now been demolished, and the property was cleared of all demolition debris. 

For four years, this property was an ongoing danger to the people of Banning, California. At the end of the receivership process, it was a vacant lot, with all violations and hazardous conditions eliminated. 

What Is the Receivership Remedy for Commercial Real Estate? 

A court-appointed receiver is an individual or entity that is assigned by a court to manage or oversee certain assets, real estate, or businesses when there are legal disputes or concerns regarding ownership, management, abandonment, and more. 

When a property has become a public health and safety risk to its occupants or the community, a Health and Safety receiver is granted power by the courts to identify and remediate safety hazards and code violations.

The responsibilities and rights of a receiver include: 

  • Gaining control of the property
  • Taking over the operation and management of the property
  • Assessing and identifying health and safety issues
  • Developing a remediation plan
  • Hiring contractors and other professionals to carry out the remediation plan
  • Provide progress reports to the court
  • Manage finances and funds, including rent and expenses
  • Returning the property to the owner or seeking further action 

Do You Need a Court-Appointed Receiver? 

The receivership remedy for commercial real estate can provide the long-desired solution to problematic abandoned properties. A health and safety receiver can play an important role in helping your community become safer! 

Municipalities, local governments, and concerned citizens can petition the court for a receiver to be appointed over nuisance or unsafe properties. Sometimes, they can even nominate a specific receiver, which the court may approve. 

Receiver Richardson “Red” Griswold has been appointed by California courts hundreds of times across numerous California counties to act as a receiver for substandard properties. 

For more information about how the Griswold Team can help you address dangerous properties in your city or neighborhood, please contact Griswold Law Receiverships.

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