Use of a Court Appointed Receiver to Sell Real Property

Written by Adam Peck Category: Business Law January 15th, 2013 2 min read

The statutory remedy of selling real property under a writ of execution provides a strict but orderly process that a judgment creditor may follow toward satisfaction of the judgment. However, judgment creditors may consider the process to be too complex and the cost prohibitive in light of the nebulous results attendant to the statutory procedure.

This article discusses use of a court-appointed receiver to sell real property as an alternative to the statutory execution sale. Using a court-appointed receiver to sell real property offers a number of distinct advantages over an execution sale:

There is a greater degree of certainty that the property will sell under an order appointing a receiver often in the same amount of time (or less) as a creditor’s first run through an execution sale (i.e., about five months);
Once the receiver is appointed, he handles all of the procedures necessary to complete the sale with very little effort needed from the creditor; and
The receiver can sell the property on the open market, through a real estate agent, to realize the highest return possible.

Despite the obvious advantages, appointment of a receiver is considered a “drastic remedy” and many courts will not grant an order to appoint a receiver unless there are extenuating circumstances and “good cause”, such as:

A previous execution sale against the property was unsuccessful;
The net amount expected from an execution sale will not satisfy the judgment in full;
Non-debtor third parties own an interest in the subject property;
The property includes a resident business that is also subject to execution against an interest of the judgment debtor;
The judgment debtor stipulates to appointment of the receiver in order to get the greatest value for the property applied toward the judgment; or
A fraudulent transfer of the property has been made or threatened, or there are other circumstances indicating fraud or dissipation of the asset.

In the most general terms, the moving party should be prepared to show:

That the other less drastic remedies provided by statute are inadequate AND that appointment of the receiver will substantially improve the outcome; OR
That the receiver is necessary to preserve the interests of all concerned, particularly if outside third parties have an interest in the property or there are “badges of fraud” present.

– from Steven Peck, Senior Attorney at Peck Law Group

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Written by Adam Peck

Expertise: Personal Injury

Adam J. Peck, ESQ is a principal with Peck Law Group, APC. In 2008, Mr. Adam Peck received his Juris Doctorate from Whittier Law School where he graduated Cum Laude. His practice is primarily dedicated to representing Elders, Dependent Adults, along with their loved ones and family members, who have suffered horrific personal injuries.