How Blanket Receivership Works
Blanket receiverships come about in a relatively painless court proceeding. The association’s attorney files a petition in the circuit court in the county where the association is located. The attorney introduces evidence to convince the judge of the necessity of the receivership. The attorney must establish that the association requires the appointment of a receiver to protect its asset: in this case, its income.
Once a receiver is appointed, the receiver must begin his or her work immediately by identifying the units subject to collection, initiating those collections and pursuing the renters aggressively if they don’t pay.
The receiver should account for his or her collection activities and then provide the proceeds to the association to restore its cash flow on an ongoing basis.
In order for this arrangement to work best, the association, its manager and attorney must work with the receiver, providing the receiver with records when requested. Since the receiver does not work at the property, itself, it is always helpful for association members to be aware of the receiver's tenants and to notify the receiver when the tenant's status has changed(i.e. the tenant moves without notice).