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What is a Receiver?

April 9th, 2008 · 5 Comments

war-zone-small.jpgIn the fight against blight, former Baltimore Mayor Martin O’Malley instituted project 5000, where the goal was to acquire 5000 houses and sell them to investors and home owners. Most of these properties were acquired through tax foreclosures. These houses were sometimes sold as packages to developers or as SCOPE properties (Selling City Owned Properties Efficiently).

Well the Scope turned out to be anything but efficient.  It is a failed program with few of the houses sold actually getting renovated at all much less on the schedule set by the city.  Most real estate investors don’t like SCOPE because it is too cumbersome and too many hoops to jump through.

So it’s a new Mayor and a new plan.  Rather than take over the properties themselves, they are taking the owners to court to appoint a receiver to auction off the property and put it in the hands of a qualified bidder who can rehabilitate the property and bring it back up to code.  The authority to do this is in the Fire Codes.  A vacant building is considered a nuisance and hazard to the health and safety of neighbors and the community.

As a personal note I am not too excited about this as it smacks of Eminent Domain.  It also interferes with part of my business model.  They are going after the same properties I have tax liens on.

Tomorrow I go to court for one of these proceedings.  Over the phone the City Solicitor didn’t sound like he was going to cut me any slack in court even though I have only owned the property for a less than a week.

Also the city does not like the idea of people “flipping houses” They don’t see the value in a wholesaler.  I am primarily a wholesaler.  I see myself as an important part of the process of getting vacant property back into productive use.  Some in the city see people like me as “greedy investors” taking advantage of the system.

Check back tomorrow to see how it goes in court.

Ned

Tags: Advanced tips · Law and Regulations · real estate

5 responses so far ↓

  • 1 House Flipper (1 comments.) // Apr 10, 2008 at 7:40 am

    Ned,

    This is terrible! I can underdstand that they want to clean up the city, but they lumping all investors into one bucket by taking these kinds of sweeping actions. Some investors are actually helping by moving properties to rehabbers like myself. They are even taking properties from rehabbers while in the process of rehabbing, like the Hopkins Project that I am working on.

    When is it considered crossing the line into greed? Anyway if you come across some good deals be sure to ping me. Im looking for a multi to rehab.

  • 2 Another day in court. // May 30, 2008 at 8:58 pm

    […] the button to the right. Thanks for visiting!If you read my previous posts My Day in Court   and What is a Receiver? You know the city is trying to take one of my properties and auction it off. The last time I was […]

  • 3 Yury // Aug 12, 2011 at 3:09 pm

    Ned – is there a way to investigate whether the property is a candidate for the procedure? What were to happen to the tax lien holder’s interests if receivership takes place? Thanks! Yury

  • 4 Ned // Aug 14, 2011 at 9:31 pm

    Yuri, I believe the city is now taking properties out of the tax sale that they intend on filing for receivership on. The bad news is a receivership can wipe out a tax lien. I am not sure this is legal but like the say “you can’t fight city hall” My guess is you will eventually win but it will be a hassle. I had a big tax lien that was wiped out by receivership. It another risk of tax sale.

  • 5 Yury // Aug 15, 2011 at 8:41 am

    Thanks Ned

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