FAQs About Receiverships | The Parties Involved | Receivership Feasibility Report
The Receiver Group is Colorado’s leading HOA receivership service provider, helping HOA’s with collections, code violations and disputes. We are directly chosen by the HOA’s counsel, then appointed, under CCIOA, Rule 66, to serve as Receiver for properties all over Colorado. TRG uses agents in remote areas such as mountain towns and ski resorts to minimize receivership costs and maximize revenues for the underlying debt. It is our mission to “get in and get out” as quickly as possible, resolving the matter with integrity and efficiency for all parties involved.
Residential / HOA receiverships are most commonly brought about to satisfy a debt on a property. Sometimes code violations or other disputes between the homeowner and HOA call for the use of a receivership to resolve the matter. In all instances, The Receiver Group uses professional expertise to work quickly and begin communicating with any available parties. Our effective ability to bring about a resolution or work towards satisfying the reason for appointment is why attorneys in Colorado choose TRG as their selected Receiver.
Below is a FAQ section to help you further understand HOA receiverships. We are interested in your business and welcome any inquiries you might have regarding receivership and how our skill sets can bring about resolution.
FAQs about Receivership
What is an HOA Receiver?
- A Receiver is appointed by the Judge to take possession and control of a property, upon a motion by the HOA’s attorney, for a specific purpose most often to assist in collecting on a debt.
- The Receiver takes control of the property and manages it under the authority of the Court Order, collects rents and distributes the income to the HOA until either the debt is paid in full or a resolution is reached.
Why would an HOA want to appoint a Receiver?
- To satisfy a debt and arrears.
- To Take care of code violations.
- Asset preservation and property protection, health and safety concerns (mold).
How can an HOA appoint a Receiver?
- After all requirements of the HOA collections policy have been met.
- Through the HOA’s attorney, a motion is filed with the court stating and proving circumstances exist that necessitate the need for a Receiver to provide immediate relief to the HOA.
- Order a Receivership Feasibility Report from TRG (usually through your attorney) that will provide an HOA with detailed success factors and risks for a specific property.
When should an HOA take action and appoint a Receiver?
- Homeowner is delinquent on paying assessments, usually recurring or long-standing past due balance.
- Tenant occupied unit or vacant unit (no homeowner occupancy).
- Debt balances are typically $2,000 – $15,000 when a Receiver is appointed.
- The lower the balance, the better the success rate of the receivership. Larger balances take more time.
What are the risks of an HOA receivership?
- The HOA has no control over the property or receivership once the Receiver is appointed.
- The property most often needs some repair and general maintenance; these costs are usually paid by the HOA as a loan to the estate, and then repaid with rental income.
- A bank foreclosure can occur due to the financial distress of the owner and property.
- Cash flow takes 1-3 months depending on occupancy and property condition.
The Parties Involved: Click HERE to see the Relationship Matrix to Debt Satisfaction
- Neutral party / Officer of the court
- Custody and control of subject property
- Fiduciary of the estate and property / Can disburse funds to beneficiaries
- Communicates with all parties, works to resolve matter
- The “moving” party to request receivership as remedy to get debt paid
- Approves receivership and major actions once appointed
- Beneficiary of receivership funds or proceeds
- Liaison for the Receiver and HOA
- Enforces the HOA rules and regs regarding the property
- Agent for the Plaintiff (3rd party)
- Manages accounting for homeowner ledger
- Neutral, Occupying property in receivership
- Pays rent to Receiver so debt can be paid
- Protected by Court Order
- Key in communicating with Defendant
Court / Judge:
- Governing body issuing Order and authority for receivership
- Presides over entire receivership and hears arguments from all sides
- Monitors and approves Receiver’s actions through reporting or hearings
Defendant (Owner and/or Agents):
- Record owner of the property
- Can be an individual or entity
- The Party being sued due to non-payment of debts or current assessments
- Enjoined (separated) from the property once Order is issued
- Not allowed to receive monies from property once Order is issued
- Legal council representing the HOA (Plaintiff), appearing on behalf of the HOA to the court
- Gives advice and recommendation for Receiver’s appointment
- Liaison between the HOA and the Receiver
- Liaison between parties to lawsuit for settlement negotiations
- Oversees Receiver’s actions on behalf of the Plaintiff
- Oversees and monitors accounting for homeowner and ledger
- Appearing on behalf of the Defendant (may or may not enter an appearance to court)
- Often communicates with the Receiver and Plaintiff’s counsel regarding resolution of matter
- Settlement Communications
Request a Receivership Feasibility Report: Let’s face it, the concept of what receivership is can be difficult to understand, let alone how it can help an HOA. Good lawyers know how to explain what we do and how we can help, but allow us to take you a step further to reinforce and confirm their advice – by conducting a Receivership Feasibility Report. We developed a report that helps explore the complex situation and shed light on a potential receivership’s uncertainty. CLICK HERE to learn more.