The Receivership Process: It’s Easier Than You Think!
Once the receiver is appointed by the court, the city’s work ends. From that point forward it’s all up to the receiver and the court (the city of course has as much input as is desired on the receiver’s plan before the court approves it). The receiver’s expert recommendations and proposed actions are authorized by the appointing judge via court order. The city is then able to direct its attention to the many other pressing concerns of its communities while the receiver supervises the rehabilitation of the property at the property owner’s expense. Simply put, utilizing the receivership remedy saves a city time, resources and money.
When compared to the often-difficult city abatement and enforcement process, the receivership remedy is an attractive alternative. The typical process for the appointment of a receiver is as follows:
- Step 1: City identifies property in violation of state or local health and safety code, and property owner’s failure to correct such items;
- Step 2: City nominates a receiver via petition to the court (on as little as three days notice to property owner);
- Step 3: Once receiver is appointed by court, property is under the direct control of the court, via the court-appointed receiver;
- Step 4: Receiver creates and carries out rehabilitation plan for property and obtains lien financing—all under the direct authorization of the court;
- Step 5: Property owner, via the equity in the property, is responsible for paying for city’s enforcement costs and attorneys’ fees, as well as the cost of rehabilitation and receiver fees. In short, the property pays its own cost of rehabilitation.
This “CRG FYI” is not meant to provide legal advice and should not be relied on in any legal matter. CRG is not providing legal advice and does not create any of the duties and obligations inherent in the attorney-client relationship with this information. This information is meant to begin a dialogue and to increase awareness of the receivership remedy in the code enforcement and municipal law fields.