The usual rules of evidence will apply at the receivership hearing, including the owner of the mortgaged property being allowed to give an opinion as to the value of the property. Themoving party should come prepared to identify a suitable receiver for the property should the judge request a suggestion. However, judges usually select their own receiver. The receivermust be an impartial individual, although in certain cases the owner of the property may act asreceiver if all parties assent to same.
The order appointing a receiver will delineate the scope of the receiver’s authority.
Courts are often inclined to give the receiver broad range over the duties it may perform when incharge of the property. The owner of the property should pay close attention to theresponsibilities listed in the order to ensure the receiver cannot take certain actions, such as
leasing or selling the property, without the owner’s prior approval or a hearing before the court
to make a determination.Rule 1.620 of the Florida Rules of Civil Procedure requires the receiver to file aninventory of the property, under oath, within 20 days after appointment. An inventory andaccounting of the property must be filed every three (3) months thereafter until an order
discharging the receiver is entered. Rule 1.620 also includes a remedy for the receiver’s failure
to file the required reports, including charging the receiver with the expenses associated withentering an order to file the required reports.If a receiver is appointed, a bond must be posted by the receiver with good and sufficientsurety, payable to the State, in an adequate amount to be fixed by the Court, conditioned on hisfaithful performance of his prescribed duties. Edenfield at 548. Further, some courts nowrequire the Plaintiff to post a bond as well.
When a person’s conduct is restrained, or his business or property handed
over to a receiver, the protection which such bonds afford should not belightly dispensed with, but should be zealously guarded and uniformlyenforced by the courts. Such orders for injunction and receivership may
have serious and far reaching effects on a person’s liberty of action and his
property or business. The party who initiates such drastic writs andprocesses should be made to place himself in a position of accountability,at least to the extent that the law specifies, to recompense his adversary forlosses sustained, if it should be concluded ultimately that his action whichbrought it about was irregularly or improvidently invoked, or his causewithout merit.
Belk’s Dept. Store v. Scherman
, 117 So.2d 845, 848 (Fla. 3rd DCA 1960). An indemnity bondshould be required of the Plaintiff prior to appointing a receiver. Id.Another option for obtaining immediate funds on a defaulted mortgage note is to requestthe court enforce the assignment of rents provision of the mortgage agreement. Often times amortgage will include language that, upon default, the Lender is entitled to collect any rentalincome, or other financial benefits, generated by the property. An assignment of rents may alsobe an entirely separate agreement, which must be recorded in the public records in order tobecome a valid lien.It used to be that appointing a receiver and sequestering rents paid on a piece of propertywent hand in hand. Now, thanks to a change in statutory law, one does not necessarily requirethe other. Today, a Lender may request sequestration of rents due without the need to appoint areceiver to collect the rents. Fla. Stat. §
697.07 entitled “Assignments of Rents” states as follows
in regards to a default under the terms of a loan which includes an assignment of rents: