California Injury Attorney Blog

The statutory remedy of selling real property under a writ of execution
provides a strict but orderly process that a judgment creditor may follow toward
satisfaction of the judgment. However, judgment creditors may consider the
process to be too complex and the cost prohibitive in light of the nebulous results
attendant to the statutory procedure.
This article discusses use of a court appointed receiver to sell real
property as an alternative to the statutory execution sale. Using a court appointed
receiver to sell real property offers a number of distinct advantages over an
execution sale:
• There is a greater degree of certainty that the property will sell under an
order appointing a receiver-often in the same amount of time (or less) as
a creditor's first run through an execution sale (i.e., about five months);
• Once the receiver is appointed, he handles all of the procedures
necessary to complete the sale with very little effort needed from the
creditor; and
• The receiver can sell the property on the open market, through a real
estate agent, to realize the highest return possible.
Despite the obvious advantages, appointment of a receiver is considered
a "drastic remedy" and many courts will not grant an order to appoint a receiver
unless there are extenuating circumstances and "good cause", such as:
• A previous execution sale against the property was unsuccessful;
• The net amount expected from an execution sale will not satisfy the
judgment in full;
• Non-debtor third parties own an interest in the subject property;
• The property includes a resident business that is also subject to execution
against an interest of the judgment debtor;
• The judgment debtor stipulates to appointment of the receiver in order to
get the greatest value for the property applied toward the judgment; or
• A fraudulent transfer of the property has been made or threatened, or
there are other circumstances indicating fraud or dissipation of the asset.
In the most general terms, the moving party should be prepared to show:
• That the other less drastic remedies provided by statute are inadequate
AND that appointment of the receiver will substantially improve the
outcome; OR
• That the receiver is necessary to preserve the interests of all concerned,
particularly if outside third parties have an interest in the property or there
are "badges of fraud" present.