The California Code of Civil Procedure Section 564 lists many of the traditional types of cases in which receivers may be appointed. They include, but are not limited to, the following: Preservation of a common fund or property in dispute and in danger of injury or dissipation;Rents, Issues and Profits (Real Estate);Substandard Housing – The…
How does a Los Angeles real estate receiver sell real property?
A receiver is always appointed by the court pursuant to a court order. Sometimes appointed receivers may be provided with the authority to sell real estate. This authority is contained in the California Code of Civil Procedure Section 568.5.
The receiver must use reasonable care to sell the property at or above market rates. A fire sale at a below-market rate would be contrary to the duties and obligations of a receiver. However, many conditions will affect the value of the real estate including leases, maintenance, ability to finance, age, location, market conditions, and aesthetics.
Before real estate may be sold by a receiver, the court must confirm the sale through a confirmation hearing. Once there is court approval on the request to confirm the sale, a notice of ruling is circulated, and the 60-day appeal period will begin. After the expiration of the 60-day period, title insurance may be obtained, and escrow may be closed thereafter.
The court receiver specializing in real estate with the requisite knowledge regarding real estate values, property management, operation, and the overall sales process is an important part of the underlying litigation which may help to resolve the dispute between the parties. In many instances, it is helpful if the receiver holds a California real estate broker’s license or additional professional designations such as a CCIM. Stephen Donell, James Donell, and Todd Donell are California licensed real estate brokers and CCIMs.
A receivership can be structured in a variety of ways based on the nature of the dispute, the goals and objectives of the parties, the type of asset(s) that will be placed under the control of a receiver as well as the ruling of the court. There are two core types of receiverships – a…