Commercial Mortgage Foreclosures
Commercial mortgages are held to the same rights and rules as other mortgages, but have some distinct concerns. First, commercial uses of property are often more intensive than residential and impact environmental concerns. Secondly, personal property is secured both by non-realty provisions contained in the commercial real property mortgage itself as well as separate non-realty security instruments.
The appointment of receiver is frequently seen in the context of a commercial mortgage foreclosures where rents and other monies are being generated by the property. A receiver will not be appointed unless certain requirements are met. First, the party seeking a receiver must show that there is a substantial likelihood that it will prevail on the merits at the conclusion of the case. The loan documents may authorize the appointment of a receiver, but such authorization is not considered a waiver and the trial court must still examine the factors for appointment. If the rents and profits are pledged as additional security, then not using the rents and profits to pay the mortgage is a basis for appointment of a receiver. A mortgagor may counter this basis for appointment, however, by demonstrating there is a sufficient equity in the property that will cover the entire debt or that it will provide security for the rents and profits that are not being paid to the mortgagee. With the exception of the right to sell and distribute funds, receivers enjoy a great deal of discretion in dealing with the property.
Each commercial foreclosure case is unique. Speak with a commercial foreclosure defense attorney today about your case.