When you’re dealing with a business foreclosure, things will be quite different from a typical residential foreclosure. In fact, as one example, the lender may request a court appointed receiver before moving forward with the commercial foreclosure.
So what should you expect from a receiver who has been appointed by a court during a business foreclosure, and what role will he or she play in the entire process? Continue reading to learn more about this important topic.
What the Lender Wants to Ensure
To begin, it’s important to note exactly what the lender wants to be certain of when a business foreclosure is started.
First off, the lender wants to rest assured that the borrower is not, and will not, damage the value of the commercial property in any manner. And the lender also wants to be sure that the income from that commercial property will solely go towards paying back the remaining loan amount while maintaining the building.
An Unbiased Third Party
The receiver, who is typically appointed as soon as the business mortgage loan enters default, will act as the unbiased third party that’s necessary for the lender to have confidence in their ability to ensure the property is preserved and that the loan will be secure and be paid back. In other words, the lender wants to know that the property won’t become damaged and that, if there is rental income, none will be lost.
A Variety of Responsibilities
Once the receiver is appointed, he or she will have a variety of tasks to accomplish. These include managing any existing leases, as well as entering into new ones. The receiver will also be in charge of collecting all of the rental income on a property, as well as maintaining the building by setting up for any necessary repair work.
On top of all of that, the receiver will also ensure that the property is completely secured against damages that could be caused by the tenants, as well as from vandalism in general. He or she will also get the right insurance for the property, make sure that all of the taxes are paid in full and on time, and take over the control of any bank accounts that are associated with the building. In the event the court allows the property to be sold, the receiver will also ensure that the sale goes through smoothly.
Also, when you get a court appointed receiver from a company like FedReceiver, he or she will honor all of the rights of the tenants of the property, safeguard their welfare, as well as the welfare of any guests, manage continued expenses and operations while maintaining profitability, and submit property and financial reports to all of the necessary parties, such as the lender, court, and property owner.
Ultimately, when a receiver is appointed by a court during a business foreclosure, you can rest assured that he or she will take care of all of the necessary details to make the process go as smoothly as possible.
