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Health & Safety Receiverships: Super-Priority Funding - City of Sierra Madre v. Suntrust Mortgage, Inc.

Health and safety receivers have many tools available to them to aid in the rehabilitation of nuisance properties, but arguably nothing is more important than the availability of super-priority funding. Though super-priority liens have been authorized by courts in California since at least 1915 (Title Ins. & Trust Co. v. California Development Co. (1915) 171 Cal. 227), the 2019 case of City of Sierra Madre v. SunTrust Mortgage Inc. is a landmark development, because it brings this authorization into the 21st century by explicitly reiterating the availability of super-priority funding to receivers.

What is a Health and Safety Receivership?

A Health and Safety Receivership is an effective legal remedy under California law that facilitates the reestablishment of substandard properties, which include properties that show problems of hoarding, drug/slum activity, fire or water damage, unpermitted construction or habitation, or properties that have been abandoned. There are many substandard properties across California that are clearly neglected and/or vacant with no useful purpose. These properties are an eyesore to the public and can be a danger to the health, safety and welfare of the surrounding community. Health and Safety Receiverships can reduce the number of substandard properties and demonstrates to the community that the city or county is taking steps to rehabilitate problem 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 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.

Receivership Remedy for Abandoned Properties

Receivership Remedy for Substandard Motels

Substandard motels are present in cities across California. We’ve all stayed in a motel where we wished we had read the Yelp reviews first, right? Usually property owners of these substandard commercial properties neglect the basic maintenance needs of the property to save money causing the property to fall into severe disrepair. In these situations, a Court-Appointed Health and Safety Receiver can provide the solution to protect the community and occupants from such dangerous conditions. A Receiver can be appointed by the court to rehabilitate and preserve substandard commercial properties.

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