Frequently Asked Questions

What is a health and safety receiver?

Unlike the traditional concept of a financial receivership, a health and safety receiver is appointed to remedy the state and municipal code violations at a nuisance property. A receiver is a neutral third party appointed by a judge and given the authority to remedy the issues onsite. Since a receiver can start work immediately after an appointment is granted, receivership can be a quick and effective way to handle emergency situations. Receivership is 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 condition presents a serious threat to its occupants or the surrounding public.

Why health and safety receivership?

A health and safety receivership is a dramatic, immediate, comprehensive, and systematic tool that can end the issues with a nuisance property without any costs to the referring agency or government. Receivership is an effective mechanism to communicate 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.

Who can nominate a receiver?

A receiver can be nominated by a local enforcement agency (such as a city, county, or fire protection district), a tenant, or a tenant association or organization (California Health and Safety Code § 17980.7(c)).

How can I tell if a nuisance property is right for receivership?

Receivership is appropriate for perpetually hazardous properties when other code enforcement remedies have been unsuccessful. It does not have to be the absolute last-ditch effort, but it is a powerful remedy and should not to be used to abate simple problems. A court can appoint a receiver on single-family homes, apartment buildings, hotels, motels, and other commercial properties. Depending on the underlying statute, the powers can be as broad or as limited as necessary. Receivership is a useful tool for pressing situations since the receiver can be—and C.R.G. always is—onsite making a difference immediately after appointment. Property-specific questions should be raised with C.R.G.

What are the steps in the receivership process?

  • Step 1: A community identifies a property in violation of state or local health and safety codes, as well as the property owner’s failure to correct these violations;

  • Step 2: The community nominates a receiver via petition to the court (the notice given to the property owner relies on the severity of the threat);

  • Step 3: Once a receiver is appointed by the court, the property is under direct control of the court via the court-appointed receiver;

  • Step 4: The receiver creates and carries out a rehabilitation plan for the property and obtains lien financing—all under direct authorization of the court;

  • Step 5: The property owner, via the equity in the property, is responsible for paying the community‘s enforcement costs and legal fees, as well as the cost of the property’s rehabilitation and receivership fees. In short, the property pays its own rehabilitation costs.

I’ve never filed a receivership case before; where can I get help?

C.R.G. can provide useful pleading samples and explain the receivership process. Each case is different, and every owner and property present their own issues. So, while it is up to the community to file the papers, C.R.G. can explain the necessary requirements.

What happens after the receiver is appointed?

Once the receivership application receives judicial approval, the bulk of the work lies with the receiver. The requesting party may provide comment, but the control lies with the court. The receiver should be onsite immediately following the appointment to inspect the property and determine the rehabilitation plan, which is then submitted to the court for review. The receiver must file reports to update the court and parties regarding the receivership status, as well as monthly accountings to show the money being spent to correct the violations. The receivership ends when the violations are abated. At the receivership discharge, all parties weigh in on the receiver’s conduct and accomplishments.

How is the receivership funded?

The receiver, under the authority and supervision of the appointing court, borrows against the property 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. This becomes a lien on the property that, at the court’s discretion, may have priority status for reimbursement.

What happens if the owner or occupants are living onsite?

In most cases, it is too dangerous for anyone living onsite to remain while violations are present and remediation work is ongoing. The receiver can provide financial and physical assistance to any occupants, including those who are not living there legally, to help them relocate temporarily or permanently to safe, habitable housing. In some cases, this is unnecessary. Each case is unique, and the need for relocation depends on the scope of work and scale of conditions. For instance, C.R.G. has worked on unmaintained apartment buildings where residents have remained safely onsite throughout the receivership. These are case-dependent situations, based on the parties, their participation, and ultimately on the court’s evaluation of what has to be done.

Does an owner regain control of the property after receivership?

After receivership work is complete, the owner has the option to pay the receivership and community costs and retain ownership. Alternatively, the property can be sold with court approval, in which case the owner receives the sale proceeds after costs are paid. Every case is different, and C.R.G. has seen cases end both ways.

What is the legal basis for receivership in California?

The grounds for a petition appointing a receiver, as well as a comprehensive list of the tools and authority available to the receiver once appointed, are laid out in Health & Safety Code § 17980.7. Additionally, § 17980.7(c)(11) and (d)(1) provide for recovery of petitioner’s costs, expenses, and attorney fees. Code of Civil Procedure § 564 et seq. provides relevant guidelines for all receiverships. And Business and Professions § 17203 allows for a receiver to be appointed to end or remedy illegal business practices.