Receiverships, backed by receiver bonds, can be important for recovering funds in real estate foreclosures and other business disputes.
The Role of Receivers
A receiver can be appointed to take custody of the assets, property, companies and profits of an insolvent person or entity whose property is in dispute, Investopedia offers this example related to foreclosure:
In the case of a secured lender, a receivership is designed to protect the lender’s assets during an interim period, for example, while a foreclosure action is pending. In this case, the secured creditor is asking the court to protect its security…—land, buildings, business income, cash, and the like—until the foreclosure is resolved. An independent party “receives” the assets on behalf of the court and remains in possession and control of those assets until discharged by the court.
Understanding Receiver Bonds
Before official appointment, receivers are generally required to secure a receiver bond. This is a type of surety bond. Its purpose is to secure the receiver’s obligations to the duties of the receivership, as well as applicable law. The amount of the bond is determined by the court, generally reflecting a percentage of the assets the receiver is appointed to control.
A leading national provider of bonds, Colonial Surety Company offers a direct, digital and fast way to obtain a receiver bond. At Colonial, the steps are easy—get a quote online, fill out your information, and enter your payment method. Print or e-file the bond instantly—from court, the office-or anywhere. It’s that simple!
Trending: Uniform Real Estate Receivership Laws
Increasingly, uniform commercial real estate receivership laws are providing codified procedures that give creditors more predictability—and options—for protecting their interests. States who have adopted these statutes since 2017 include: Michigan, Nevada, Oregon, Tennessee, Utah, Kentucky, Oklahoma and West Virginia.
Florida recently enacted a new receivership law as well: The Uniform Commercial Real Estate Receiver Act (UCRERA). As reported by the The National Law Review, this is significant because it:
Codifies procedures, conditions and requirements to protect creditors’ interests in real property. Prior to the enactment of UCRERA, Florida was without a uniform framework when it came to the basis, process, powers, and obligations related to the appointment of a receiver for commercial real property. Instead, the appointment of a receiver and the administration of receiverships in the state were left to case law decisions and trial court discretion without any real guidelines. With the adoption of UCRERA, however, this is no longer the case. Instead, UCRERA provides a guidepost in what are proving to be unprecedented and turbulent times.
UCRERA requires a receiver’s bond and leaves the amount at the discretion of the court. Colonial Surety Company provides receiver’s bonds in Florida—and every state across the country.
Founded in 1930, Colonial Surety Company is a direct seller and writer of surety bonds and insurance products for a wide range of industries and professions. We proudly use our experience—plus technology—to give people and businesses instant, easy, direct and digital access to a broad portfolio of bond and insurance products.
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