Why does a lender hire a receiver during a commercial foreclosure?

As a result of the record number of foreclosures the past few years, lenders have realized the value of hiring commercial property receivers to help protect the lender’s interest in the property.  The receiver will maintain the property in good condition and make sure that the business runs smoothly.  Receivers can be individuals or companies, and many receivers are attorneys.  Receivers receive compensation averaging hundreds of dollars an hour for their services. When a lender hires a receiver, they are showing you that they are serious about making sure your property is well maintained and your business is being run properly.  The court approves the receiver.  Receivers have the authority to do the following:  

• Hire tradesmen and others to maintain the building and the grounds
• Make business decisions about operating the company and the property  
• Notify any tenants about the receivership
• Enter into leases and collect rents
• Pay utilities and other bills
• Pay taxes and insurance
• Hire a Realtor to list, lease and sell the property   

They help the owner find a buyer for the property so that the lender does not have to take over the property.  This prevents the lender from incurring further losses. The court will dismiss the receiver after the sale of the property. If you are involved in a foreclosure and your lender has hired a receiver, you should speak with a foreclosure defense attorney because receivership laws are very complicated.  The attorney can explain the laws to you and represent you regarding negotiations with your lender and in court.