Steps in the Receivership Process

While the steps in a receivership vary from appointment to appointment following is a basic outline of what the parties might expect from a receivership.

Motion 

A motion or application to appoint receiver is filed with the court for consideration. Typically, the court will require a hearing and notice to the parties. Sometimes the court can, on its own motion, or when parties are missing or absent appoint a receiver to protect the interest of the non-appearing parties.

Hearing & Order

The court will hold a hearing to determine if an appointment of receiver is appropriate. The court considers the motion and grants or denies an order appointing receiver. If granted, the parties will provide the receiver a copy of the order appointing receiver.

Oath & Bond

The receiver files an oath of office and posts a bond, if required.  At this point the receiver becomes and officer of the court and follows the orders of the court.

Sales Process

The sales process is likely to vary.  Most sellers and buyers view receiverships as a distressed sales process.  With a Realtor receiver the sales process, especially the sales price, is similar a conventional sales process.

Hearing

Once a buyer makes an offer, a receiver accepts the offer contingent upon court acceptance. The receiver files a motion with the court and requests a hearing. This process may be done without a hearing if all parties agree to the terms and condition of the contract. The receiver will give all parties notice of the hearing. 

Inspection

Once the court grants preliminary approval, the buyer’s inspection period will begin with an anticipated closing date. The buyer, following inspection, may make additional request based upon conditions that were not discovered until the inspection. The receiver will consider the counter offer, but will again request the court’s permission to move forward.

Hearing

The receiver will file a report of sale of real property with the court which outlines the terms and conditions of the purchase agreement. If accepted, the Judge will sign a decree confirming sale of real property approving the sale.

Closing

The receiver will, with court approval, sign the deed of trust and closing documents.  Unlike an ordinary sales process, the owners of the property are not required to appear at the closing table. 

Hearing to Discharge Receiver

The receiver will ask for the court’s permission to disburse the funds and/or place the funds in the registry of the court. The receiver will ask the court to confirm the sale and discharge the receiver. The receiver duties end.

Disburse Funds

Following court approval, and if allowed, the title company will disburse funds to the parties.