RECEIVERS

Another litigation issue of frequent concern to real estate disputes is the appointment of a receiver. A receiver is a court-appointed person who takes over, and holds, a specific property, in order to preserve it, while litigation is pending. As a rule, you cannot file a lawsuit for the direct purpose of getting a receiver appointed. Rather, if you have already filed a lawsuit for other purposes, you may sometimes be able to seek the appointment of a receiver as a so-called “provisional remedy”, meaning a court order, which you can obtain prior to obtaining judgment in a lawsuit.

Most of the circumstances in which a receiver can be appointed are set forth in Code of Civil Procedure Section 564. Most of the circumstances set forth in that statute involve disputes over real property in which ownership or control of the property is being disputed. For example, receivers will be appointed routinely in cases in which a lender has a debt secured by a deed of trust against an apartment building, in which the borrower is receiving the rents but not paying the lender. In such a case, a receiver will be appointed to collect the rents, pending foreclosure of the property.

Other real estate cases in which a receiver may be appointed concern multiple parties with claims to ownership of the property. For example, CCP Section 564(b)(1) authorizes the appointment of a receiver in cases involving partners or joint venture parties owning property.

Appointing a receiver is considered to be a harsh remedy, which the courts disfavor. To obtain the appointment of a receiver, it is usually necessary to show that the property is in danger, in the short-term, of being damaged in some serious manner.

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