The Receiver Group has extensive experience when it comes to commercial and lender-specific receiverships. We understand that these types of receiverships require a great deal of detail and efficiency to be successful. It is our goal to comprehend the lender’s intentions to expand all efforts towards resolving the matter with adequacy. The Receiver Group’s first objective is to reach a resolution while the operations of the asset or business remain operational and protected.
Courts commonly appoint receivers at the request of a mortgage lender that seeks to enforce a mortgage in default. A typical commercial real estate mortgage or deed of trust explicitly provides that, on default, the mortgagee may seek the appointment of a receiver from a court with jurisdiction over the mortgaged premises. Frequently, the terms of the mortgage or deed of trust purport to provide mortgagor consent for the appointment of a receiver following default.
Traditionally, mortgage lenders have sought the appointment of a receiver pending foreclosure when the mortgaged property is subject to waste, deterioration, or some other immediate physical harm that threatens to reduce the value of the mortgaged property and thus threatens the mortgagee’s security.
Colorado is a lien-theory state and borrowers own their property subject to a lender’s lien. The receivership action is brought about due to a breach in a contractual agreement (default of loan) as a form a relief, provided for in the loan documents in addition to the statutory right.
Receivers are most commonly appointed in Colorado to protect real property. Lenders utilize receivers to gain possession of encumbered property in conjunction with or prior to a foreclosure process. The reasons can vary but are mainly 1) to prevent waste or destruction of the property from occurring and 2) prevent misappropriation of rents and profits.
In Colorado, receivers are appointed by statutes. The Colorado Revised Statutes §38-38-601 and §38-38-602 provides for the appointment of a receiver when a judicial or public trustee foreclosure has been commenced, if it appears that the security for the loan is clearly inadequate or that the property is in danger of being materially injured or reduced in value by removal, destruction, deterioration, accumulation of prior liens, or otherwise.
Most often, due to the emergent and exigent circumstances involved, lender and commercial receiverships are granted by the court “ex-parte” which means “without notice”. The Court Order is granted without further hearings, based on the motion filed and circumstances presented by the moving party.
Once appointed, receivers act independently from the parties involved. They act only on behalf of the court and take action under the authority provided in the Court Order. This document sets forth the duties and specific rules for which the receiver can set up and administer the estate.
The Receiver Group has a comprehensive list of the various types of commercial / lender receiverships we have served under appointment of the court:
- Construction completion and sale
- Retail Centers
- Office Space
- Mixed Use Retail & Residential
- Multi-Family
- Industrial
- Gas Stations / Convenience Stores
- MMJ Grow or Retail Operations
- Restaurants & Bars
- Liquor Stores
- Car Washes
- Collateralized Equipment