BiggerPockets

The Appointment of a Receiver, appointed by the court does not give the bank/lender a way out of the responsibility of their commercial property that is in default, but rather eases the responsibility of the bank/lender while the property is in transition. The portfolio manager and sometimes the borrower in their chapter 11 proceedings will often request the services of a court appointed Receivership and property management company.

Receivership appointments flourished in the early 1990s when the market took a dive and left homeowners and commercial property in need of these services.

While the economy started picking up within a 5-year period, the need for Receiverships was not as prevalent in the beginning of the 21st century.

These days, because of the overwhelming properties in default, virtually everyone is jumping on the band wagon to see what it takes to become a Receiver. Although an attorney can handle the Receiver appointment, he will also need a full staff, or hire a full staff of qualified Property Management personnel, Accounting, and Property inspection services to report the conditions of the property on a monthly basis to the court, while virtually "taking over" the entire asset and managing the property.

While the property is in default, and may go back to the bank in a trustee sale, the lender now has the option of requesting the appointment of a Receiver to handle the day-to-day operations which is often beneficial to both parties.