July 12, 2016

Receivers to the Rescue?

The Washington Court of Appeals issued a published opinion last month pertaining to the Washington Receivership Statute (RCW 7.60).  The Court noted that "the legislature intended the Receivership Statute to benefit creditors having interests in property administered by the courts."  Receivers may thus be appointed by courts upon the commencement of foreclosure actions in order to lease properties.  The Washington Condominium Act (RCW 64.34.364(10)) describes such receiverships in the following manner:

"From the time of commencement of an action by the association to foreclose a lien for nonpayment of delinquent assessments against a unit that is not occupied by the owner thereof, the association shall be entitled to the appointment of a receiver to collect from the lessee thereof the rent for the unit as and when due. If the rental is not paid, the receiver may obtain possession of the unit, refurbish it for rental up to a reasonable standard for rental units in this type of condominium, rent the unit or permit its rental to others, and apply the rents first to the cost of the receivership and attorneys' fees thereof, then to the cost of refurbishing the unit, then to applicable charges, then to costs, fees, and charges of the foreclosure action, and then to the payment of the delinquent assessments. Only a receiver may take possession and collect rents under this subsection, and a receiver shall not be appointed less than ninety days after the delinquency. The exercise by the association of the foregoing rights shall not affect the priority of preexisting liens on the unit."

My office is available to assist your association if it wants to appoint a receiver to lease a delinquent property during a foreclosure action.