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Benefits of Receivership to Commercial Lenders

By Neil Sheaffer

Receivership: The Remedy for Failing Cannabis Businesses in California

Cannabis businesses are not eligible for bankruptcy protection due to the federal prohibition against cannabis. Therefore, the receivership remedy is an effective path to address the struggles of a cannabis business. Seeking and obtaining a court-appointed receiver to take control of and operate a distressed cannabis business can be initiated by a lender affected by a failing business loan or a partner in the cannabis business alleging financial mismanagement.

Health and Safety Receivership Remedy for Commercial Properties

Health and Safety Receiverships can successfully remedy substandard commercial properties in California. Substandard commercial properties may be neglected by absentee owners or landlords causing the property to fall into distress or disrepair. Maintenance needs of substandard income-producing commercial properties are often ignored by the owner to maximize profit by minimizing expenses on needed maintenance. A Court-Appointed Health and Safety Receiver can be the solution to protect communities and tenants from substandard commercial properties.

Health and Safety Receivership Remedy to Protect the Neighborhood

A Health and Safety Receivership is a legal remedy to combat neighborhood blight and transform problematic properties back into safe and habitable structures. A house or building within a community may be deteriorating due to various reasons ranging from severe hoarding, contaminated or unsafe living environments, or owner abandonment. Deteriorating properties are usually produced because no responsible party is willing or able to address the problems on the property. Whether due to an uncooperative property owner, quarreling heirs, disputes regarding title, or an owner that cannot be located, the structure or dwelling is poorly maintained making it an eyesore and hazard to the community. When a property is in severe disrepair and a danger to its tenants or neighboring residents, the property will affect the entire neighborhood.

California Partition Remedy

The California Partition Remedy addresses disputes between co-owners of a property.  A partition action is utilized when co-owners cannot decide how to handle jointly-owned property. When a property is jointly owned by two or more parties, all owners have a right to the partition remedy to divide their interest in the property. Co-owners may be family members, friends, unmarried or divorced couples, or business partners. Usually co-owners buy or inherit property on good terms with the same objective in mind, but over time their interests diverge, and they develop conflicting ideas about how to use, manage, improve, or dispose of the property. Properties subject to partition include, but are not limited to, single-family residences, vacation homes, investment properties, commercial buildings, apartment buildings, and parcels of land.

California Health & Safety Receiverships: Collaboration with Guardian Ad Litems

Health and Safety Receivership actions often deal with homeowners who are packrats/hoarders, elderly, or mentally/physically disabled. These types of homeowners may not be able to properly maintain and care for their house, which leads to loss of control of the property and the commencing of a receivership action. A Court-Appointed Health and Safety Receiver is temporarily appointed by the court to address the health and safety concerns of substandard properties that have been neglected by property owners. A Health and Safety Receivership can successfully rehabilitate distressed properties when the homeowner is unwilling or unable to remedy code violations themselves.

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