GlobeSt.com turned to Manatt's Harvey Rochman, a partner in the firm's Real Estate & Land Use Practice, for insight into the increasingly high demand for receivers, or those who are entrusted to preserve a property when the owner has been temporarily or permanently removed.
GlobeSt.com reports that in recent economic times, when foreclosures have been plentiful, receivers have been in high demand and will continue to assume an ever-increasing role in distressed properties. Industry experts say that, in addition, receivers have increasingly been needed for different and more specialized services than they performed in the past.
Rochman told GlobeSt.com that one area of need that has emerged in recent times is receivers who specialize in healthcare facilities. "Bringing a receiver in like this allows the receiver to be able to navigate often very complex sets of regulations governing those types of healthcare facilities that are not necessarily in sync with the laws that govern real property secured loans. There's a need for receivers who can both understand and implement that because healthcare is a growing area of lending for banks and other lenders focused on growth areas for the economy."
Rochman pointed out that nursing homes, for example, are governed by state and federal laws that dictate how residents can be treated, and receivers who specialize in nursing home receivership estates need to understand these laws.
As banks have become owners of foreclosed properties and the receiver relationship governed by the court is no longer needed, many lenders are hiring the former receivers to become property managers or construction managers of these assets until they can be sold. "Banks don't frequently have in-house real estate management, particularly for more complex construction projects," said Rochman.
Moving forward, Rochman said that he feels there will be less need for receivers as foreclosure activity diminishes and projects are able to continue on their own. "I think time will tell in terms of what will be needed. I personally think we're moving up slowly and will keep going, so there will be a need for receivers in circumstances of bad loans and ongoing projects of one kind or another. This may lessen to a degree over time."
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