Spring 2012 • Issue 43, page 16
Can a Broker Receiver Sell the Property in his or her Receivership Estate and Earn a Commission
By Davidson, Peter*
Q: I am a real estate broker and just secured
my first receivership appointment. Instead of listing the property in
receivership with another broker for sale, can I sell the property myself
and get the commission?
A: Probably not. The compensation that is paid to a receiver is
left to the court’s discretion. People v. Riverside University, 35
Cal.App. 3d 572 (1973). Compensation is usually measured by the reasonable
value and necessity of the services rendered. In California, courts
generally set an hourly rate for the receiver’s services or, in certain
cases, a fixed percentage of the receiver’s receipts or disbursements.
Some states have statutes that set statutory commissions. While there is
no statutory prohibition in California on your listing and selling the
property, you would not be entitled to a real estate commission unless the
court authorized it in your order of appointment, by a subsequent order
prior to your listing the property, or by stipulation of all parties to
the action and the court’s approval of the stipulation. Receivers
generally are not entitled to additional compensation for acts that are
nothing more than performing the duties he or she was appointed to
perform. That is not to say that in extraordinary cases additional
compensation cannot be awarded by the court, but listing and selling
property probably does not fall into that category. If you want to be paid
real estate commissions, you should not expect to get them from acting as
a receiver and you should stick to pursing your career as a broker. You
should also be aware of California Rule of Court 3.1179 (b), which
prohibits parties seeking a receiver’s appointment and receivers from
entering into any contract or arrangement concerning how the receiver will
administer the receivership, how much the receiver will charge, or the
role of the receiver with respect to the property after a trustee’s sale
or the termination of the receivership. In other words, you cannot make a
deal with the plaintiff that you will be the broker to sell the property
when the receivership ends. *Peter A.
Davidson is a Partner of Ervin Cohen & Jessup LLP a Beverly Hills Law
Firm. His practice includes representing Receivers and acting as a
Receiver in State and Federal Court.
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