Code of the District of Columbia

§ 42–3651.06. Powers and duties of a receiver.

*NOTE: This section includes amendments by emergency legislation that will expire on November 21, 2021. To view the text of this section after the expiration of all emergency and temporary legislation, click this link: Permanent Version.*

(a) A receiver shall:

(1) Take charge of the operation and management of the rental housing accommodation and assume all rights to possess and use the building, fixtures, furnishings, records, and other related property and goods that the owner or property manager would have if the receiver had not been appointed; and

(2) Give notice of the receivership, in accordance with subsection (b) of this section, to the rental housing accommodation’s tenants and employees, all public utility providers whom the owner was responsible for paying before the appointment of the receiver, any mortgage company holding a lien against the property, and any other person whom the Court orders should receive notice;

(3) Have the power to collect all rents and payments for use and occupancy;

(4)(A) Provide the Court, within 30 days following the issuance of the order of appointment, with a plan for the rehabilitation of the rental housing accommodation, including the projected dates when all causes giving rise to the appointment will be abated and a financial forecast indicating how the rehabilitation will be paid for;

(B) Serve a copy of the plan upon the owner of record, the Attorney General for the District of Columbia, and the tenants of the rental housing accommodation, or their representative;

(5)(A) Report to the Court every 6 months after the filing of the report required under paragraph (4) of this subsection, describing the progress made in abating the conditions giving rise to the appointment, updating the financial forecast for the rehabilitation, and describing any changes in the condition of the rental housing accommodation that may change the proposed completion dates submitted under paragraph (4) of this subsection;

(B) Serve a copy of the report upon the owner of record, the Attorney General for the District of Columbia, and the tenants of the rental housing accommodation, or their representative;

(6) Preserve all property and records with which the receiver has been entrusted;

(7) Assume all rights of the owner to enforce or avoid terms of a lease, mortgage, secured transactions, and other contracts related to the rental housing accommodation and its operation; and

(8) Carry out any other duties established by the Court.

(b) The notice required by subsection (a)(2) of this section shall include, at a minimum, the following information in not less than 12-point type in both English and Spanish:

(1) The reasons for the receivership;

(2) The identity of the receiver, his or her address and telephone number;

(3) The receiver’s responsibilities and duties;

(4) The anticipated duration of the receivership; and

(5) That no tenant is required to move as a result of the receivership.

(c) The receiver shall, under the plan described in subsection (a)(4) of this section, make payments in accordance with the following priorities:

(1) As a first priority, using monthly rental income, to abate housing code violations if abatement is required within 7 days of service of notice, and, after abatement of the conditions, to abate housing code violations if abatement is required within 30 days of service of notice; and

(2) As a second priority, for other purposes reasonably necessary in the ordinary course of business of the property, including maintenance and upkeep of the rental housing accommodation, payment of utility bills, mortgages and other debts, and payment of the receiver’s fee.

(d) The receiver shall not make capital improvements to the property except those necessary to abate housing code violations.

(e) The receiver shall not enter into contracts which affect the ownership of the property.

(f) The receiver shall be personally liable only for his or her acts of gross negligence or intentional wrongdoing in carrying out the receivership.

(g) A receiver shall be entitled to a reasonable fee established by the Court and payable from the revenues of the rental housing accommodation.

(h) The receiver may apply for grants and subsidies for the relief of distressed properties to the same extent as the owner of the rental housing accommodation.

(i) The owner, agent, manager, or lessor shall be enjoined from collecting rents and payments for use and occupancy for the duration of the receivership.

(j)(1) In a case in which the court has appointed a receiver in response to a petition made pursuant to § 42-3651.03, if the court finds, after notice and hearing, that the owner of the rental property currently lacks sufficient funds to pay for rehabilitation of the rental housing accommodation and that such funds cannot be feasibly and timely obtained through grants or subsidies:

(A) The court may issue an order authorizing the Attorney General to supply funding to the receiver, for initial and emergency repairs, from any funds available in the Tenant Receivership Act Abatement Fund [Tenant Receivership Abatement Fund], established by § 1-301.86e; or

(B) The Court may extend the receivership in place under this chapter based on a showing of demonstrated need and authorize the receiver to do either of the following:

(i) Sell the property for a fair-market price to an owner capable of maintaining the property; or

(ii) If the owner is a District of Columbia corporation or other entity, file a petition in the appropriate federal bankruptcy court to place the corporate owner into bankruptcy proceedings pursuant to, and in a manner consistent with, the federal Bankruptcy Code.

(2)(A) If a court issues an order pursuant to paragraph (1)(A) of this subsection, the owner shall be required to repay the funding supplied by the Attorney General no later than 30 days after the receiver receives those funds. Any funds unpaid as of that 30-day deadline shall incur interest at the rate of 6% per annum until repaid. The Attorney General may petition the court to convert the order into a final judgment, and once the order is so converted, the Attorney General may take actions to collect any unpaid balance, using all available collection methods authorized under District or other applicable law.

(B) An owner's obligation to repay funding pursuant to subparagraph (A) of this paragraph shall automatically become a lien on the owner's real property as of the date the Attorney General supplies funds to the receiver pursuant to paragraph (1)(A) of this section.

(C) A lien established pursuant to subparagraph (B) of this paragraph shall be a prior and preferred lien over all other liens or encumbrances on the real property.