If all goes as planned, the Uniform Law Commission will finalize and promulgate a model act dealing with the appointment and powers of commercial real estate receivers at some point in 2015. Last month, the Drafting Committee for this model act met in Minneapolis, MN to discuss and revise the latest draft. Since a significant part of my practice is devoted to real estate receiverships in Arizona, I flew up to Minnesota to participate in the meeting as an Observer.
Led by Chair, Tom Hemmendinger, and Reporter, Wilson Freyermuth, the committee meticulously analyzed every aspect of the draft act, including the grounds for appointment, the receiver’s powers upon appointment, the rights of third-parties affected by a receivership, and – by far the most provocative issue – whether a receiver should have the power to sell real property. The well-informed discussions ranged from theoretical policy considerations to boots-on-the-ground practical concerns for receivers to the political issues associated with enacting the model act once it is finished.
Although one of the great things about receiverships is the flexibility and adaptability of the remedy, there is an undeniable dearth of Arizona statutory law describing what a receiver may, or may not, do in any given circumstance. The Drafting Committee appears to be preparing an act that will not only preserve the equitable aspect of receiverships, but will also provide some helpful, legally accurate, and useful guidance to courts, practitioners, and receivers alike. Once the model act is approved by the Uniform Law Commission, it will be up to individual states to enact it in whole or in part. Stay tuned to the blog for more updates about the Model Act on the Appointment and Powers of Real Estate Receivers.