Jones Mayer is one of California’s leading law firms experienced in handling health and safety receiverships as authorized by the California Health & Safety Code. Receiverships for severely substandard properties are quickly emerging as the future of code enforcement across the state.
Jones Mayer offers a unique mix of services not found at any other law firm. Our City Receivership Division routinely provides legal representation to public agencies in obtaining a court-appointed receiver to abate substandard conditions and bring properties into full legal compliance. We initiate the litigation for the agency and manage all aspects of the case in court. Alternatively, if the public agency wishes to use its own legal counsel, cities and counties routinely nominate us to serve as the court-appointed receiver through our Receivership Division. Our broad experience allows us to efficiently manage resources and obtain desirable results for problem properties.
Local governments can use receiverships to rapidly eliminate substandard conditions and violations of law, such as health and safety code, building code, municipal code, and other violations that pose a life-safety risk to any occupants and the community. Upon nomination by the local enforcement agency, a court-appointed neutral, the receiver, takes temporary possession and control of a property. The receiver is charged with bringing that property into compliance with state and local codes, all at the expense of the property and its owner. Orders to vacate come from the supervising court, and property clean-outs, rehabilitation, demolition, or sale are supervised by the court and performed by the receiver.
The benefits of health and safety receiverships include:
Sample cases qualifying for consideration of this remedy include:
City attorneys, code enforcement officers, and elected officials often have questions about how health and safety receiverships work. The information below provides an overview of the process.
Jones Mayer is here to answer your questions about this important remedy. To learn more, please contact Jones Mayer Senior Counsel & Director of City Receiverships Amanda Pope at aap@jones-mayer.com or by calling (714) 446-1400.
Properties with persistent, serious code violations and substandard conditions are a ubiquitous enforcement challenge. California law offers agencies several remedies to pursue against noncompliant properties. Among the available solutions, health and safety receiverships provide a remedy that is fast and cost-effective.
Health and safety receiverships are authorized under California Health and Safety Code Section 17980.7(c). A civil remedy enforced through the courts, they follow special procedural rules code enforcement officers and their attorneys will need to understand to be successful. In a nutshell, a receivership places the property in the control of a court-appointed neutral called a receiver who has the authority to correct code violations, using financing obtained with the property itself as collateral.
What kinds of problems can a health and safety receivership solve?
Health and safety receiverships can be used to address many unresolved violations of law that pose a danger to a property’s residents or to the public at large. Typical examples include:
The advantages of health and safety receiverships
While other remedies exist to obtain compliance for code violations such as criminal prosecution or administrative citations, they often do not result in compliance. Court orders and fines are only effective if the property owner cooperates. If the owner cannot be found, refuses to comply, is deceased, or can’t comply (for example, due to lack of funds), civil penalties alone are unlikely to deliver results.
Health and safety receiverships provide a remedy that can produce permanent results. This legal remedy provides these advantages:
The role of the attorney in health and safety receivership cases
Agencies should retain an attorney with experience implementing health and safety receiverships. Bringing the attorney into the process early will ensure procedural requirements are met and a robust case is developed in advance of filing. An attorney can be particularly important in helping the agency correctly gather and document appropriate evidence and assist staff with obtaining an inspection warrant, if necessary. They also represent the city in all court proceedings and support the oversight of the receiver’s work.
For reasons of professional ethics, attorneys who handle these cases do not also serve as the receivers.
Click here to learn more about the attorney’s role in receiverships.
A health and safety receivership is a remedy that becomes available to an enforcement agency only after the property owner has failed to comply with a valid compliance order. An incomplete enforcement process at this stage can delay the possibility of pursuing a receivership later on.
Rather than dive into the details of compliance orders, this article’s purpose is to highlight some of the key ways that this stage of code enforcement can shape the outcome of a receivership case.
The compliance order process builds the foundation for a potential receivership
Like other remedies for significant code violations, such as condemnation, a health and safety receivership case is a court-administered process. As such, the enforcement agency needs to manage its compliance order procedures to ensure due process requirements are satisfied and in anticipation that they will come under adversarial scrutiny at a later stage.
These are three key pillars upon which a potential health and safety receivership case may be built:
1. A properly issued compliance order.
A health and safety receivership is a remedy that only becomes available after code enforcement officers have sought to compel a property owner to abate violations of law through a well-organized compliance order process. Under California law, such an order can be issued when two factors are present:
Health and Safety Code section 17980.6 provides notice posting and delivery requirements, as well as details that must be included in the wording of the order itself, such as the agency’s contact information and the date, time, and location of any scheduled hearings to discuss the case.
2. Documentation and evidence.
Agencies issue compliance orders to prompt the property owner to fix outstanding violations. In some cases, further steps may be necessary to reach resolution. Some property owners respond to compliance orders by putting up barriers—physical or legal—to further evidence-gathering by the code enforcement officer. Therefore it is vital to build a robust file anticipating potential administrative and judicial processes.
These are examples of the information that an agency should studiously catalog from the start of an enforcement process:
3. Compliance order timing.
Under the Health and Safety Code, a property owner is entitled to a reasonable amount of time to comply with a valid compliance order. The reasonableness standard allows code enforcement officers to establish compliance deadlines directly related to the specific conditions existing upon a substandard property. Agencies should work with counsel to ensure that compliance timeframes will stand up to judicial scrutiny if a receivership or other remedy becomes necessary.
The reasonableness standard requires a careful examination of the facts surrounding the property. For example, a code violation that poses an imminent danger to a property’s inhabitants, such as an immediate fire risk, can justify a short timeframe. Unfortunately, many cases are not so clear-cut. Complex considerations such as the mental health of the residents, the difficulty of achieving compliance, and other factors can shape the reasonableness of a chosen course.
Code enforcement officers need good legal counsel
As this outline shows, the compliance order process presents code enforcement officers with numerous opportunities for building a solid case. If a property owner fails to take action, and a hazardous condition persists, a well-executed compliance order process can set the stage for pursuing a health and safety receivership.
The goal of a health and safety receivership is straightforward: bring a property into compliance with the law in an efficient, timely, and cost-effective manner. To achieve its goal, an enforcement agency needs to follow a disciplined and organized process. In this article, we outline the procedures of a health and safety receivership case under California Health & Safety Code Section 17980.7(c).
Prerequisites for pursuing a health and safety receivership
Before an agency can petition a court for a health and safety receivership, the owner of the subject property first must have failed to comply within a reasonable time with an order or notice issued under California Health & Safety Code Section 17980.6. That section describes the procedures that must be followed when an agency has identified a violation of applicable building standards, health and safety regulations, and other violations of law upon a property.
Note that the reasonable time standard grants agencies flexibility to take appropriate action in response to the specific conditions at the property. An imminent hazard may shorten the amount of time that is reasonable in a particular case.
Click here to review our article exploring the notice rules and other process elements in the pre-petition stage.
Step 1: Draft the petition.
Thorough and accurate documentation of the code violations facilitates an efficient drafting process at the petition stage.
A petition presented in court seeking the appointment of a receiver pursuant to the Health and Safety Code should include the following information:
Step 2: Provide notice to interested parties.
At least three days before the petition is submitted to the court, the law requires that a copy of the petition first be posted in a prominent place at the subject property and sent by first-class mail to anyone with a recorded interest in the property. In addition to owners of record, this may also include lienholders of record, which requires a legal analysis of the current state title for the property. Proof that these steps were taken must be submitted to the court when the petition is filed.
Step 3: File the petition with the court.
A petition is filed with the State Superior Court in the district where the property is located, following the California Rules of Civil Procedure and other applicable California Rules of Court.
Step 4: The court takes control of the property and appoints a receiver.
In a receivership, control over the property passes to the court. The receiver, acting as the agent of the court, follows the court’s direction on the specific administration tasks of the receivership.
In most cases, courts will appoint the agency’s nominee as receiver over the subject property. Courts have discretion to select a different receiver if there are concerns about the nominee’s competency or independence.
Step 5: The receiver designs and implements the rehabilitation plan.
Under the court’s supervision, the receiver crafts a plan to resolve the code violations present on the subject property. The receiver’s agency relationship with the court means it cannot take any action without the court’s approval. The receiver arranges financing, typically secured by liens against the property, and hires contractors to do the necessary work.
The City remains a party throughout the litigation and needs adequate representation until the case has concluded.
Step 6: The receiver is discharged.
Upon completion of the rehabilitation process, the liens obtained by the Receiver to fund the rehabilitation work are repaid by the receivership estate. The property can be sold to effectuate payment or be directly paid by the owner, who is ultimately responsible under the Health and Safety Code. Once all liens and costs are paid, including those of the receiver and the agency that initiated the receivership petition, the Receiver is discharged by the Court and the case is concluded.
When a local agency pursues a health and safety receivership under California Health and Safety Code Section 17980.7(c), it will need the assistance of both an attorney and a receiver. In our work for local governments throughout California seeking the appointment of a receiver, we can fulfill both roles is a primary question. For important reasons, the answer is no.
This article explains what the attorney and receiver each do during a health and safety receivership.
What is the role of the attorney in a health and safety receivership?
A local agency that wishes to pursue a health and safety receivership to abate violations and obtain permanent compliance upon a substandard property will benefit from the support of an attorney with experience handling these cases. The attorney’s work in a receivership case goes far beyond the critical step of preparing the initial petition. Due to the specific features of these cases, we recommend city attorneys who have not handled these cases before consider engaging outside counsel to ensure code enforcement is fully assisted in building its case.
The attorney’s role in a health and safety receivership begins long before the court receives the filed petition. As we covered in an earlier article, the foundation for a health and safety receivership is laid from the beginning of an agency’s code enforcement process. To optimize the outcome of a potential receivership later on, an attorney can help the agency collect the right evidence and follow the proper steps to build a robust case or assist with evaluating a long-standing nuisance property.
In addition to preparing the initial petition and representing the agency, the attorney will play an essential role in overseeing the receivership throughout the process. The attorney continues to advocate for the city’s position throughout the receivership litigation and serves as the city’s direct contact with the receiver to ensure that the receiver’s plan and administration of the receivership adequately address the community’s concerns and result in full compliance. The attorney monitors the receiver’s reports, responds to questions from the receiver and the court and ensures the city is legally protected through the case.
What does a receiver do in a health and safety receivership?
A health and safety receivership is a court-administered process. Judges are not in the business of fixing fire hazards, cleaning up nuisance properties, or correcting other code violations. Instead, they turn to third-party agents to take possession and manage these properties.
The party petitioning the court for a receivership (i.e. a city) typically nominates the receiver as part of the petition process. The counterparty to the petition, often the property owner or bank with a mortgage on the property, has an opportunity to present objections or nominate a different receiver.
These are key features of the receiver’s role:
Rely on Jones Mayer
As a law firm dedicated to representing and advising local governments throughout California, Jones Mayer believes that health and safety receiverships offer local agencies an important but underutilized tool for addressing nuisance properties in their communities.
To learn more about California’s health and safety receivership process, please contact Jones Mayer Senior Counsel & Director of City Receiverships Amanda Pope at aap@jones-mayer.com or by calling (714) 446-1400.
