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Benefits of Receivership to Commercial Lenders

By Neil Sheaffer

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 Hoarding Properties

Hoarding is a serious clinical disorder where an individual has obstinate difficulty discarding or parting with belongings. A person with a hoarding disorder experiences distress at the idea of getting rid of their possessions because they have an inherent need to save them. This mentality results in excessive accrual of belongings regardless of actual value. Hoarding behaviors can produce an unsafe environment posing a health and safety risk to the people living in the home.  A Court-Appointed Health & Safety Receiver can remedy the effects of extreme hoarding at residential properties. The court can appoint a neutral third-party receiver to take control of the property to remedy the challenging hoarding conditions.

Rents and Profits Receivership

A Rents and Profits Receivership assists in the enforcement of a mortgage, deed of trust, or related assignment. A rents and profits receivership commonly occurs when a property owner defaults on a mortgage and the lender seeks the appointment of a receiver to protect the collateral while foreclosure commences. Deeds of trust typically provide for the appointment of a receiver and contain an assignment of rents provision to collect rents and preserve the property. A court-appointed receiver has the right to take control over and possess all collateral property subject to the deed or mortgage as directed by the court. A receiver is appointed by the court to collect and secure rents and to preserve and protect the property during a foreclosure.

Post-Judgment Receiverships in California

Hooray a judgment as been entered! However, just because a decision has been made, the battle is not over yet. Now the phase of enforcing and collecting on that judgment begins. In many cases, a judgment debtor will never willingly satisfy a judgment. For this reason, a post-judgment Receivership is a great judgment enforcement remedy that can help recover money to pay the judgment. A post-judgment Receiver is appointed by the court and, for example, may be granted the authority to manage and take possession of the judgment debtor’s real and personal property to collect, lease, repair, or sell as the court directs. Courts have interpreted that a post-judgment Receiver is in fact working for the benefit of the judgment creditor that sought the appointment of the Receiver.

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