With the impact of municipal debt burdens, coupled with the effects of declining real estate prices and the US financial crisis, municipalities are looking for novel and cost-effective approaches to address abandoned, blighted and/or foreclosed properties that threaten the quality of life of their communities. Receivership, the use of statutory power to seize buildings and place properties under control of a judicially supervised ‘receiver’, can be an effective tool to tackle the problem of troubled properties which repeatedly violate safety and sanitary codes. Despite its potential, receivership requires significant coordination, as well as a committed team, in order to implement the intricate process of running a successful receivership strategy.
The Receivership Statute provides that the receiver may borrow funds to undertake the repairs, to grant mortgages on the property, and/or assign the priority lien to its creditor(s). Appropriate funding sources to finance a receivership might include: rental income (the receiver may rent the property to new tenants to offset the receiver’s expenses once the code violations have been eliminated); foundation grants; public, federal, state or municipal programs; and/or private investments.
CRC’s Receivership Program has led to the restoration of several properties – some single-family, some multi-family – in Chelsea, Revere and Saugus over the past several years, including multiple gut-rehab projects. The blighted condition of these homes deteriorated the quality of life in the surrounding neighborhoods, and many of these properties were utilized for drug dealing and other criminal activities. In each case, the process of neighborhood revitalization was more complex than simply rehabilitating these homes. CRC not only managed the construction and restoration process, but also worked to promote local ownership of the properties while helping low-to-moderate income individuals and families achieve their dream of home ownership.