A How-To Manual: Avoid Becoming a Candidate in a Receivership Case

April 25, 2016

Many years ago, residential and commercial buildings would sit in disrepair for months or even years because government agencies lacked the tools to properly deal with substandard properties. However, in 1990, California Legislature passed Health & Safety Code section 17980.7, which added receivership to the options available to public agencies. In this situation, a receiver takes possession of the property, rehabilitates it and then sells it if necessary to pay receivership expenses.

In their article “A How-To Manual for Preventing Commercial Properties from Going into a Court-Appointed Receivership,” Kevin Randolph and Nicholas Firetag address the five common ways to avoid becoming the defendant in a receivership case.

When identifying a property that is a viable candidate for a receivership case, regulatory agencies look for properties with significant violations, including trash/debris, dead landscaping, holes in a roof, etc. Once the agency identifies a problem property, they put the owner on notice by posting notice on the property.

Once a receiver is appointed, it is very difficult for an owner to have the receiver discharged. Owners should take every reasonable precaution to avoid having control over their properties and finances placed in a receiver’s hands.

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