– The Uniform Commercial Real Estate Receivership Act became law in Florida on July 1, 2020.
– The Act clarifies the standard for the appointment of a receiver and the powers of receivers in commercial foreclosure actions.
– Receivers are important because they preserve the status quo, manage property expenses, and preserve the property that is subject to litigation during foreclosure proceedings. – The purpose of the Act is to provide a uniform procedure for appointing a receiver for commercial real estate property in Florida.
– The Act expands the right of receivership and offers a more uniform and predictable process for appointment of a receiver.
– The Act does not create an independent cause of action and only applies to commercial real estate property or incidental personal property used in operating the commercial real property. – Appointment of a receiver may be necessary to protect the mortgaged property from waste, loss, or substantial diminution in value.
– The mortgagor or owner may have agreed in writing to the appointment of a receiver on default.
– The mortgaged property and other collateral may not be enough to satisfy the secured obligation.
– The owner may have failed to turn over proceeds or rents to the mortgagee.
– A holder of a subordinate lien may have obtained appointment of a receiver for the property.
– The receiver must submit a statement to the court confirming that they have no conflicting interests and must post a bond with the court. – Receivers have the authority to collect, control, manage, conserve, and protect receivership property.
– They can operate a business constituting receivership property and incur unsecured debt in the ordinary course of business.
– Receivers can also assert rights, seek instructions from the court, compel individuals to submit to examination, engage professionals, and exercise powers conferred by court order or Florida laws. – A receiver can sell receivership property with court approval before a judgment is entered, if the owner consents or does not object in time.
– The court may order the sale to proceed free and clear of all liens, but any valid liens at the time of transfer will attach to the proceeds of the transfer.
– The receiver has mandatory duties, including preparing and retaining business records, accounting for receivership property, and disclosing any facts that would disqualify them to the court.
– The receiver must file a final report with the court upon completion of their duties, including a description of their activities, lists of property, disbursements, and distributions, and a request for approval of their fees and expenses. 1. A receiver may be compensated from the receivership property for reasonable fees and expenses for performing their duties.
2. The court can expand, modify, or limit the powers of the receiver and has the authority to remove the receiver if necessary.
3. The court is responsible for reviewing the receiver’s reporting and can discharge the receiver upon approval of the receiver’s final report and distribution of all receivership property.
https://www.jimersonfirm.com/blog/2020/08/florida-uniform-commercial-real-estate-receivership-act/
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