5 FUN FACTS ABOUT RECEIVERSHIP (REALLY!)

Woo-hoo, receivership! Vandeberg Johnson & Gandara's John Holmes and Washington Federal's Norm Culbert dropped in on the recent CCIM luncheon at the Seattle Yacht Club to chat up a subject that can make people's toes curl a bit. John and Norm acknowledge that discussing receivership in CRE may be akin to talking about your hip replacement surgery at the dinner table, but they nevertheless had the audience rapt through their presentation. We knew that receivers are third-party referees, appointed by the court at the behest of lenders or creditors with, to put it delicately,"problem owners." Here are five things we didn't know:
  1. Receivers don't have to be individuals—they can be companies as well.

  2. There are two types of receivers: custodial receivers and general receivers. The difference? The custodial receiver gets possession of a special piece of property, while the general receiver acts more like a bankruptcy trustee, taking over everything the debtor owns.

  3. The receiver gets paid first— even before the creditor.

  4. No, there's no special class you can take to become a certified receiver. Generally the party asking the court to appoint a receiver has someone in mind already and suggests that person or entity to the court. "There's no list," John assured everyone.

  5. Just because a property is or has been in receivership doesn't automatically make it a lemon investment. "Sophisticated buyers who have bought these things have done very well," John says. "I wouldn't be afraid of them."

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