Facts about Receiverships

A Health & Safety receivership is a dramatic, immediate, comprehensive, and systematic tool that ends the problems with slum housing and problem properties without any costs to the referring agency or government. Receiverships are a dramatic mechanism which communicates to neighbors and surrounding communities that the city/county/agency is taking concrete steps to remedy the problem property they have lived with and will remedy the dangerous conditions created by absentee or recalcitrant owners.

Unlike the traditional concept of financial receivership, a Health & Safety receiver is not appointed to operate a property for a period of time, or to “wind-down” operations. Rather, the receiver is appointed to remedy the health and safety violations on a property. Often this involves hiring a contractor to correct the violations, or it could begin with emptying a property of its residents. The remedies are left to the receiver, which is what makes the remedy so adaptable and applicable to the problems a government is facing.

Authorized pursuant to California Health & Safety Code Sections 17980 et seq., receiverships are used primarily for abandoned and substandard properties where the owner has a history of non-compliance with local enforcement agency orders to abate, or when a property’s conditions pose a serious threat to its residents or the public at large.

Health & Safety Receiverships are implemented, most effectively, under three scenarios:

The Receiver, under the authority and supervision of the California Superior Court, borrows against the property (using the property's equity) and uses those funds to pay for emergency owner/occupant relocation, property rehabilitation, demolition or other work as authorized by the Court in order to bring the property into compliance with local and state regulations.

Benefits of Receiverships

• Orders to vacate must come from the Court.This greatly reduces local enforcement agency exposure to potential negative publicity as well as liability that can accompany forced relocation and takeover of private property. The Health & Safety Code does not require the filing of a civil complaint. It authorizes the ex-parte appointment of a receiver on petition of a local enforcement agency. The typical life of the receivership ranges from 2-6 months depending upon the scope of the project.
• Enforcement Remedyis a faster and far more efficient method to abate severely substandard properties due to shortened notice requirements as well as ex-parte application.
• A Receiver is typically appointed on the day of the application and empowered with the authority to take emergency measures to secure a given property, immediately relocate tenants/owners/residents to safe and temporary housing, and abate other circumstances posing immediate threats to health and safety.

• The Prevailing Party (upon successful appointment of a receiver) is awarded attorneys fees and costs, by statute, for the cost of obtaining Receiver's appointment and even, under certain circumstances, for costs of prior enforcement efforts/criminal prosecutions/abatement proceedings/outstanding liens for prior abatements

Frequently Asked Questions

Q. Who Can Ask the Superior Court to Appoint a Health & Safety Receiver Over Property?

A. (1)Local Enforcement Agency; (2) Tenant; (3) Tenant Association or Organization (Cal. H&S 17980.7(c)).

Q. What is the Legal Authority to Petition for the Receiver's Appointment on an Ex Parte Basis?

A. Rules 3.1175 through 3.1184 of the California Rules of Court outline ex parte applications. Oftentimes, this is the only option when faced with a serious health and safety issue.

Q. What is the Specific Legal Authority of the Receiver?

A. See H&S 17980.7(c) for exhaustive and comprehensive list of tools/authority available to the Receiver once appointed. Courts also have broad discretion within their equitable receivership powers to define the full scope of powers available to a receiver.

Q. If a city or county’s code enforcement process require a lengthy notice, hearing and appeal, does the Health and Safety Code provisions relating to appointment of a Receiver stand apart from those requirements/process/procedure? Or can we pursue alternate remedies at the same time (criminal prosecution, civil nuisance abatement, administrative citations, for example).

A. The H&S 17980.7 remedy can be brought independently from any other matters, as (g) states: “these remedies shall be in addition to those provided by any other law.”

Q. What are the Rules Relating to Grounds for Issuance of Notice to Repair or Abate: 17980.6? What is the trigger?

A. Any violation of state or municipal code triggers the potential receivership remedy. H&S § 17980.6 and §17980.7 apply to all buildings, and there is no restriction which would limit the applicability to occupied or commercial buildings. A 17980.6 Notice can be issued to abandoned, occupied, residential, commercial buildings. H&S § 17980.6. The conditions present must be “so extensive and of such a nature that the health & safety of residents or the public is substantially endangered.” H&S § 17980.6. That threat can be to the occupants or the public at large.

Q. How Much Time Must the City/County Give to Repair or Abate Pursuant to a 17980.6 Notice?

A. The California Health & Safety Code requires only a “reasonable time” to comply with a violation notice under 17980.6 regardless of what a local ordinance or regulation may otherwise require.

Q. How Much Time is Considered "Reasonable Time?"

A. What constitutes a reasonable amount of time will depend on the facts and circumstances surrounding the individual property. Once the “reasonable time” to repair/abate has expired, the only remaining Notice requirement to owner/recorded interests, prior to filing of the ex parte emergency application/petition, is the [at least] three day notice that the City/County intends to file the petition.

Q. What Happens when a Property Fails to Comply with the 17980.6 Notice and Correct the Violations?

A. The enforcement agency, tenant, or tenant association or organization may seek and the court may order, the appointment of a receiver for the substandard building. §17980.7(c).