Lawsuits are a fact of life, no matter where you are from. Disputes over compensation and other money matters arise all the time, and sometimes they involve the exchange of money regarding a disputed property or business. While the case is being heard, neither of the opposing parties has a legal right to the funds until a verdict is given in a court of law. Until this decision is handed down, a property receiver is sometimes responsible for holding onto this money. What does a property receiver do?
In the case of a dispute over ownership or management of a property or business, the court is allowed to appoint a neutral party to take care of profits and rents that come into the contested property. This unbiased party is known as the property receiver, and he or she is in charge of handling the money that enters the property until the court rules in favor of one of the opposing parties in the case. Not until it is determined who owns or is able to manage the funds does the receiver give up control of the money. Property receivers are also used in bankruptcy cases in order to collect rents and profits that the debtor would normally receive. The receiver will hold the money while the case is processed or while a payment plan is conceived to pay the creditors.
A receiver is only appointed at the request of the other party to the lawsuit and only then if significant evidence exists that no money would be available to the prevailing party once a decision is rendered. The receiver pays out the funds that were held to the winning party. Although a property receiver is legally in control of all property granted by the court, the title to the property or business is not signed over to the receiver. Occasionally, funds are illegally transferred to escape the notice of creditors prior to the appointment of a receiver. Though the receiver does have an automatic right to these funds, they are able to initiate a lawsuit in order to recover the money.
A receiver must remain neutral regarding the lawsuit and not work on the behalf of either of the opposing parties. He or she acts as an officer of the court, and may even be required to post a bond in order to account for faithful service to the court. If the receiver is found to be negligent or biased, he or she will be removed from service and likely held financially responsible for the funds involved in any untoward usage.
A property receiver acts as the caretaker of a disputed business or property’s funds until the court hands down a legal decision. He or she is a legal officer of the court and must collect funds in a neutral manner until the court releases the funds to the prevailing party. The property receiver then hands over the monies and is relieved of his or her duties.
Find out more – Property Receivers
