When property is in “receivership,” this means that such property is subject to the exclusive control and management of a court-appointed “Receiver,” whose powers and responsibilities are defined in the court’s Order. In general, a court may appoint a Receiver to execute a judgment against property, or to protect property (as well as its occupants/tenants), while such property is the subject of a pending legal matter.

The implications of property being in receivership is that possession and control is removed from its original owner, and invested in the Receiver as it is defined in the court’s Order. However, all ownership rights of property in Receivership still remain withits

owner. Only possession and control is removed from that owner in the manner specifically defined by the court’s Order. Thus, the court-appointed Receiver is the only person/entity that can handle, manage, administer, discuss, operate and/or facilitate any action in connection with the property subject to the court’s Order.

Who can be a Receiver?

A Receiver can be an individual (usually an attorney) or an entity (usually a property management company or law firm).

A Receiver is not an employee, agent, contractor or vendor of the court system itself. Upon appointment, a Receiver is an officer of the court engaged for the specific purpose(s) defined in the Order to act affirmatively in connection with the subject property. Likewise, Receivers are not employees, agents, contractors or vendors of the plaintiff, petitioner or creditor who may have requested that the court appoint a receiver. Receivers are independent third parties who may have to communicate and interact with all parties, but are only obligated to answer to the court.

When can a Receiver be Appointed?

There are many instances where a court might appoint a Receiver, but they generally fall within one of the following categories, 1) to enforce a court judgment, to provide interim corporate management or property management, or 3) to collect rent (i.e. Rent Receiver).

How is a Receiver Appointed?

A Receiver is appointed at a hearing before the court at which time an Order is entered that defines the scope of powers, duties and responsibilities of the Receiver. Most courts expect that litigants will have attempted other means for enforcement prior to requesting the appointment of a Receiver. Should the appointment of a Receiver be necessary, it is accomplished by filing a motion or a complaint under one of the prescribed statutory provisions.

What is a Rent Receiver?

Pursuant to most commercial mortgage contracts, a lender may petition the Court for the appointment of a “Rent Receiver'” who is empowered to intercept tenant rent payments from delinquent borrowers. The Rent Receiver must also provide interim property management and stabilization pending foreclosure proceedings.

Sherman Toppin redefines Receivership

As mentioned above, Receivers are usually attorneys or property management companies, but seldom both. However, there are many instances where both capabilities are needed by the Receiver to address the needs of a given property or situation.

Our law firm and real estate brokerage work in concert to provide a broad range Receivership services which encompass all actions, reporting and managerial functions generally requested by parties seeking the appoint of a Receiver.

Receivers that are either law firms or property management companies are incapable of performing tasks of the other discipline that may arise unexpectedly during the course of an appointment. Therefore, it is advantageous for parties seeking the appointment of a Receiver to engage our company because we can seamlessly attend to issues that may cross service disciplines.

We offer a variety of integrated services for receivership appointments that range from single asset rent collection to mass portfolio management.

Our integrated company model and method of execution has redefined traditional role and scope of services generally expected of Receivers.

For more information about our Receivership practice please visit www.shermantoppin.com