receivership is the situation in which a real property is being
held by a receiver. A person placed in custodial
responsibility for the property of others is a court appointed
receiver. Court–appointed receiver are “the most powerful and
independent of the
judicially appointed managers” The receiver completely
displaces the defendants: the receiver makes large and small
decisions, spends the organizations funds, administers and markets
the property, and controls hiring and firing
Quite often, the property manager will receive only a few days
notice when it is brought in to assume management of property.
The ability to bring together the people and resources needed and
dedicated internal systems on relatively short notice is key to
establish a reputation for being able to take on receivership
What causes a Receivership?
Receivership results from real estate foreclosures. Creditors can
petition the court to establish a receiver for the experience and
expertise to protect the property’s value for the possible sale of
How is a Receiver Appointed?
The appointment of a receiver is accomplished by filing a motion or
complaint under one of the prescribed statutory
Does the receiver bleed the business dry to satisfy the creditor’s
The receiver is mandated by law to use his best efforts to reserve
the viability of the property while enforcing the court’s order.
The receiver can bring a fresh management perspective to the
business well beyond the receivership period and is the best
candidate to continue with the new owner because of the familiarity
of the employees, property and operations.
How much does it cost to appoint a receiver?
Although the cost of a receiver are usually paid through the
receivership estate, the creditor must advance the cost necessary
to appoint the receiver. If there are not sufficient liquid
funds available within the receivership estate to support the
operation expenses, the moving party will need to loan the funds to
the receivership estate through a Receiver’s