Persistent health and safety code violations can be exceptionally difficult to resolve using many of the enforcement tools in an agency’s tool kit. While enforcement actions wind their way through processes that can be long and slow, unsafe conditions remain.
California’s public health laws allow local agencies to ask the courts to place noncompliant properties into receivership. In a receivership the court appoints a receiver to take control of the property and resolve its code violations under court supervision. The result can be a relatively quick and inexpensive way to enforce health and safety codes, other state laws and municipal codes and bring a property into full compliance with the law.
Blight and deteriorating properties pose a risk to cities
Abandoned or neglected properties provide challenges for cities. They create direct costs in the form of higher public safety and fire protection expenses. They also put a damper on property tax revenues. Studies have shown that deteriorating housing stock can adversely impact neighborhoods, as residents move away and developers focus on more appealing areas. Substandard housing is likely to attract transients and higher levels of crime, often requiring additional police presence.
Cities have a direct interest in keeping properties livable, in compliance with the law, and supportive of the community’s health and safety goals. Most conventional enforcement mechanisms result in a string of notices to the property’s owners or occupants. Especially in difficult economic times, property owners often let the notices pile up without taking action to remedy the violation.
Administrative citations, criminal prosecution, direct abatement, civil nuisance litigation seeking injunctions, foreclosures, conservatorships and public guardianships all take time and money to administer. Receiverships provide an alternative legal remedy that shifts responsibility for addressing code violations at a property to a third-party receiver who obtains priority funding against the receivership estate rendering receiverships cost-neutral.
The basics of health and safety receiverships in California
Health and safety receiverships are authorized under Section 17980.7 of the California Health and Safety Code and permit an enforcement agency, such as a city or county, to petition a court to appoint a receiver over a substantially dangerous property.
The receiver is subject to the court’s orders; a receiver does not act on behalf of the petitioning agency, although the court may direct the receiver to act in accordance with a petitioner’s requests. The receiver is required to provide monthly reports to the court and all parties, including the applicable enforcement agency. A receiver must have the necessary expertise to create and implement a plan for resolving the problems with the property. Our firm works with receivers who have been appointed over hundreds of properties and are experts in this area of the law.
Once appointed, a receiver wields broad powers to manage the property. These include hiring contractors to complete work to bring the property into compliance with safety codes, managing tenant relationships, relocating owners or occupants if necessary, collecting rents. A court may also authorize a receiver to secure debts for repairs of the property by issuing liens on the subject property. Meanwhile, the owner of the property is prohibited from interfering with the actions taken by a receiver.
Threshold requirements
To pursue receivership a city does not need to first exhaust all other remedies. The owner need only be provided with a reasonable time to comply with an order to repair conditions that are “so extensive and of such a nature that the health and safety of the residents or the public is substantially endangered.” If compliance is not forthcoming within a reasonable period, receivership becomes an option.
Properties subject to a receivership action can be residential or commercial (if used for human habitation), occupied or abandoned. A City may even petition a court for the appointment of a receiver if the owners are deceased. Throughout California, cities and counties are using receiverships to address a variety of dangerous conditions: properties rendered unsafe by excessive debris or hoarding, fire-damaged structures, empty buildings being used by transients or being used for criminal activity, persistent failures by landlords to fix violations of law, or properties that are substandard due to multiple violations of state law or municipal codes.
Tactical benefits of health and safety receiverships
Health and safety receiverships are practical, fast, and cost-effective:
- Practical. Because health and safety receiverships are provided for under California state law, cities and counties do not need to adopt special rules of their own to petition a court to appoint a receiver. An agency can establish the basic grounds for pursuing a receivership against a property by following well-established notice procedures under the Health and Safety Code.
- The defendant or respondent in a receivership action is only entitled to 3-days’ notice of the complaint or petition and once filed in court, they only have 10 days to respond to the complaint or petition. Once appointed by a court, a receiver can quickly begin the process of securing a property and abating the violations of law. Once a receiver is in place, the problematic owner cannot prevent the receiver from taking the steps needed to resolve the code violations and render the property safe.
- Cost-effective. For cities and counties, a key advantage of receiverships is that they shift a the expenses associated with enforcing the law against the owner to the receiver, who relies on the power of the court to seek renumeration from the property owner for the administration and costs of bringing the property into compliance. In practice, the receiver obtains super-priority liens against the receivership estate to pay all expenses of the receiver and cost of rehabilitation. All costs and fees of a city or county, including attorneys’ fees and litigation costs, are also collected through the receivership estate.
Agencies looking for a relatively fast solution for persistent health and safety violations should keep receiverships in mind as a powerful and effective tool. The result can be a safer and healthier environment for residents of impacted properties and the surrounding communities.
Jones & Mayer serves local governments throughout California
As part of our work on behalf of local government agencies in California, Jones & Mayer counsels officials on matters of public safety, code enforcement, and more. Our team has deep experience representing clients in courts throughout California to petition for the appointment of a receiver. We would be happy to help your community become safer and healthier. To learn more please contact attorney Amanda Pope, Director of City Receiverships, at aap@jones-mayer.com or by calling (714) 446-1400.