If a property is underwater and/or in a blighted condition with numerous are lienholders hesitant to foreclose? The answer is often receivership. If a property is underwater, but some equity exists a receiver can be appointed to take control of the property and eventually sell the property pursuant to California Code of Civil Procedure (“CCP”) § 568.5. The receivership sale must be confirmed by the court. (CCP 568.5; (People v. Riverside University (1973) 35 Cal.
Category: Bi-Weekly Receivership Education
Using Receiverships to Revitalize Abandoned Construction Projects
What happens when a construction project runs out of money and the half finished skyscraper, mall, or hotel sits vacant for years? There are two things that can happen; (1) while everyone waits until the developer finds funds, which is unlikely; or, (2) a more practical solution is that a developer or other party with a recorded interest can seek the appointment of a receiver over the Property pursuant to California Code of Civil Procedure
LIEN STRIPPING WHY DOES IT OCCUR AND HOW DOES IT WORK?
Few people are familiar with the term lien stripping. Therefore, an example to illustrate when lien stripping would be used seems the most appropriate way to introduce the process. As an example, if in 2010 a set of parents drafted a granting $1,000,000 to their four children upon their deaths each child would be entitled to $250,000. However, what if when the parents died in 2020 there was only $500,000 left in the Estate? Obviously,
Using Receiverships to Help a Lender on a Distressed Environmental Asset Avoid Liability
Secured lenders are hesitant to foreclose when environmental problems exist, based on concerns about CEQA, CERCLA, or other environmental issues, because they may be deemed an owner or operator. However, lenders can avoid these concerns by seeking the appointment of a receiver for the distressed property. California Civil Procedure (“CCP”) § 2929.5 & 564(c) authorizes lenders to inspect property to assess the existence and magnitude of hazardous substances and environmental issues. If there are significant