Neighborhood Renewal Division Housing Receivership Manual

Basics of Receivership 

The authority to use receivership to address distressed properties is found in Massachusetts General Law Chapter 111 Section 127I. Receivership petitions can be brought by effected occupants or a public agency such as the Attorney General’s Office (AGO) or a municipality. The AGO frequently brings petitions for receivership working in partnership with a municipality. The process begins with the filing of a petition, asking the appropriate court to appoint a receiver to bring the property into compliance with the State Sanitary Code. This position is generally filled by someone (or an entity) with property management or restoration experience. Receivers can be individuals, for profit entities, or non-profit organizations. Receivers do not work for the AGO or the municipality. Instead, they are agents of the appointing court. For this reason, those interested in serving as a receiver may want to reach out to both the local housing court and the municipalities in the regions where they are interested in working to learn more about the application process for receivers.  

Receivership in Partnership with the AGO 

The AGO’s Neighborhood Renewal Division (NRD) focuses on residential properties. Municipalities throughout the Commonwealth can refer properties with severe violations of the State Sanitary Code to NRD. NRD will then work with the municipality to communicate with the homeowner(s) to address violations and bring the property back up to code. Over 80 percent of distressed properties referred to NRD are resolved prior to filing a petition with the court. A petition to appoint a receiver is only filed when the homeowner(s) fails to respond to NRD regarding violations or if the homeowner(s) fails to comply with an agreement with NRD and the municipality to maintain and/or repair the property. Petitions that are brought to the court can be brought by NRD alone or in conjunction with a municipality. NRD generally files its petitions for receivership in the property’s regional housing court. 

Since a receiver is an agent to the court, the judge will determine if a specific receiver is suitable to handle a property. In many regions, the housing court maintains a Receiver List and, without unique circumstances, the appointed receiver will be the next available receiver on the list. Depending on the court’s location, potential receivers may apply and be put on a court’s list. In cases in which NRD has petitioned for the appointment of the receiver, the receiver will also be subject to a thorough background check. This is to ensure that the receiver and associated business entities are abiding by Massachusetts’ laws (for example: wage and hour laws; non-profit filing requirements; and environmental regulations). The Frequently Asked Questions section on the AGO’s website can also provide more information on a receiver’s role with NRD.  

This manual provides sample documents of the pleadings and orders filed by the Massachusetts Attorney General’s Office and current receivers in recent receivership actions within various courts throughout the Commonwealth. This manual covers most facets of receivership from the initial communication with a property owner to the termination of a receivership. Included are examples of correspondence by NRD with (i) property owners, (ii) lien holders, and (iii) others with interest in a property subject to enforcement actions. 

Legal Disclaimer 

These forms and sample correspondence should not be relied upon as either legal advice or an opinion by the Attorney General’s Office. If you would like to use the forms, then you should do so only with the independent advice of legal counsel who can modify them to reflect the specific circumstances of your case and advise you as to the applicable law. 

All properties located within the Commonwealth must adhere to the State Sanitary Code (105 CMR 410.00). Attached below are documentation stating the enforcement of this code, as well as sample demand letters, which demand that the recipient of the letter take or cease a certain action.

Exterior and Interior Inspections:  

Before a property is subject to receivership, it will go through a series of inspections by the municipality which NRD frequently joins. The inspection(s) will be used to document the sanitary code violations (with reports and pictures). At times, the municipality may want to document the conditions of the interior of the property and may need to seek court authorization to enter the house through an administrative search warrant.

Frequently, NRD will be able to make its decision to move forward with receivership on a property based solely on the exterior conditions at the property. NRD will require a municipality to cite and document specific code violations before moving forward with a property. At the end of the receivership, the municipality must conduct a final inspection to make sure all violations noted have been addressed and comply with the State Sanitary Code.  

Petition to Enforce State Sanitary Code & Appointment of a Receiver: 

If the property owner(s) do not respond or fail to adequately address the conditions at the property, a petition to enforce the code may be drafted and filed with the regional housing court. In the petition, the Attorney General (the petitioner) identifies the issues with the property and includes inspection reports, affidavits from the municipality, photos, and the steps taken to address the violations with the owners. In some cases, the municipality has already filed a petition and the AGO is asked to “intervene” as a co-plaintiff/petitioner. 

Prior to the appointment of a receiver, the petitioner is required to serve a copy of the petition on ALL parties associated with the property. Generally, this is done by providing the documents directly to the party with notice of the date and time of the hearing. For owners located within Massachusetts, the petitioner may have the county sheriff serve the papers or may request that a Special Process Server be appointed. A Special Process Server is a person appointed by the Court who is not directly involved in the case. Either the Sheriff or Special Process Server is asked to personally deliver the notice, summons, and petition to the parties named in the petition. For out of state owners, service can frequently be accomplished by sending the documents to the owner by certified mail. In situations where traditional methods of service do not work or where the petitioner is unable to locate the property owners, a Motion for Alternative Service of Process is filed. Through a Motion for Alternative Service of Process, the petitioner asks the court to allow it to notify potential owners of the property through another method. This can include publishing in a local newspaper, posting notice on the property or serving the parties through the United States Postal service using certified mail.   

Below are examples of these motions.

Every court-appointed receiver must stay in communication with the Court and NRD. Once appointed, the receiver should post a document on the property stating that the property is under receivership and providing contact information. The receiver should also communicate with occupants (if any) and homeowners if necessary, about next steps to secure and limit access to the property.

At the beginning of a receivership, the receiver will visit the property and report back to the court regarding the extent of the work that needs to be done on the property. The receiver will also provide a proposed budget of the estimated costs (including taxes owed to municipality) to repair the property to meet the basic State Sanitary Code standards. The receiver will be monitored throughout the process to be sure that the costs of cleanup, repairs, and administrative fees do not become excessive. The receiver is required to file periodic reports with the court documenting the work completed and costs associated with the work. NRD will review these reports to ensure their accuracy and that they comply with the receiver’s proposed repair plan. If the receiver realizes that additional repairs are necessary, the receiver should request permission from the court to complete the additional repairs and seek approval of any additional costs. Each court will schedule periodic status hearings and make specific interim orders throughout the process to ensure that the receiver is completing the work and is doing so within a reasonable timeframe.  

The following are samples from filings made in different Housing Courts from two different receivers':

Document Samples From Receiver One:

• Notice of Receivership Action to Be Posted on Property
• Letter sent to Tenant if occupies (multi-family Property)
• Notice of Receiver's Appointment/Lien 
• Receiver's Initial Report 
• Receiver's Summary of Cost of Scope of Work
• Receiver's Motion for Approval of Development, Scope, and Budget
• Receiver's Motion to Amend Budget
• Receiver's Motion to Extend Receivership

Document Samples From Receiver Two:

• Receiver's Initial Report - Sample 2
• Receiver's Motion for Approval of Proposed Budget - Sample 2 
• Receiver's Motion to Extend Receivership with Order - Sample 

Once the receiver completes the work at the property, a final report with a full accounting of the receiver’s expenses is presented to the court. If the Judge approves the expenditures, the homeowner (or mortgagee or other lienholder on the property) has the opportunity to pay off the entire receiver’s bill (including any municipal taxes owed to the city/town or paid by the receiver). Once the bill is paid, the receiver’s lien is discharged from the property. At this time, the receiver is also discharged and is no longer responsible for the property. In many cases, however, the homeowner and/or mortgagee do not pay the receiver’s final bill. In those cases, the receiver will foreclose on the receiver’s lien by either auctioning the property or obtaining permission from the court to list the property for sale through a real estate broker. Following the sale, the receiver will record a Foreclosure Deed transferring ownership of the property to the new owner. The money received from the sale will be used to offset any of the receiver’s expenses. If there is extra money after the receiver is reimbursed, the extra funds will then go to the next creditor in line who is owed money (for example a mortgage company) and who has a recorded interest in the property. If all the creditors with an interest in the property are repaid, any remaining funds will go to the owner of the property at the time the receiver was appointed. 

The following are sample filings made by several receivers in different Housing Courts.

Document Samples From Receiver One:

• Motion for Approval of Receiver's Fees/expenses 
• Motion to enforce Receiver's priority Lien/By Foreclosure/Order
• Receiver's Foreclosure Deed
• Receiver's Affidavit
• Motion for Final Accounting and Motion to Discharge Receiver

Document Samples From Receiver Two:

• Motion to accept Final Accounting, Final Report, Discharge Receiver/Order
• Final Accounting and Final Report of Receiver
• Motion for Approval Satisfaction of Lien/Discharge Receiver/Order

Samples from Other Receivers:

• Motion to Enforce Priority Lien/obtain Order Authorizing Sale to Satisfy Lien/Order
• Motion to Expand scope of Receivership and Amend Budget
• Settlement Agreement between Owner, Receiver and AGO

76 Dean Avenue, Franklin

84 Sterling Street, Lancaster