Questions attorneys ask about appointing a receiver

Who can serve as a receiver in a Texas divorce?

Under Tex. Civ. Prac. & Rem. Code §64.021, a receiver must be a citizen and qualified voter of Texas at the time of appointment and must not be a party, an attorney, or another person interested in the action.

Kasey Jorgenson meets each requirement and signs a Receiver's Affidavit of Qualifications that counsel can file with the proposed order.

What authority lets the Court appoint a receiver to sell the house?

While a divorce is pending, Tex. Fam. Code §6.502(a)(5) lets the court, after notice and hearing, appoint a receiver for the preservation and protection of the property of the parties. Receivers are also named in final decrees and in post-decree enforcement orders.

After the decree, Tex. Fam. Code §9.007 makes an order that amends, modifies, alters, or changes the property division unenforceable, so post-decree orders need care. Counsel decides which authority fits the case, and our intake form asks for the case stage.

Is a hearing required before a receiver takes the house?

Tex. R. Civ. P. 695 says that, except where a statute provides otherwise, a receiver of fixed and immovable property is not appointed without notice. The court sets the application for hearing, with notice to the adverse party at least three days before. Section 6.502(a) also calls for notice and hearing.

Does the party asking for a receiver have to post a bond?

Tex. R. Civ. P. 695a generally requires the applicant's bond, but in a divorce case the court may dispense with it. If a §6.502 appointment dispenses with the bond between the spouses, §6.502(c) requires the court's findings to explain why.

That is separate from the receiver's own bond under Tex. Civ. Prac. & Rem. Code §64.023, which the Court sets and approves. A modest receiver's bond keeps the premium, a cost of the receivership, low.

What has to happen in the first 30 days?

For a receiver appointed under §6.502(a)(5), the court issues written findings of fact and conclusions of law within 7 days (§6.502(c)), and the receiver gives notice of the appointment to each lienholder within 30 days (§6.502(b)). We send the lienholder notices.

We also take the oath, file it with the bond, and send a notice of qualification to both counsel.

What does the receiver cost, and who pays?

Receiver fee: 1.5% of the sales price, $3,500 minimum, $15,000 maximum, paid at closing. Extraordinary services, such as court appearances, testimony, or contested possession, are $300 per hour.

The only money the parties put up before closing is the cost deposit set in the order, and it is credited back at closing. The receiver fee is the same no matter which brokerage lists the property.

What if someone is still living in the house?

The property must be vacant at appointment, or the order must set a firm vacate date that delivers possession to the receiver that day.

We never remove occupants or pursue an eviction. Enforcing the vacate date stays with the parties and the Court.

Who lists the property?

The listing agent is a licensed Texas agent who knows the property's market. We prefer CDRE-designated agents when one is available. The order names the listing broker and discloses any affiliation with the receiver, and the commission, before the Court signs it.

Is a seller's disclosure notice required?

Tex. Prop. Code §5.008(e)(1) exempts a transfer pursuant to a court order from the seller's disclosure notice. We still disclose known defects to buyers in writing, provide the federal lead-based paint disclosure for homes built before 1978, and convey by receiver's deed.

Do you take direction from either side?

No. We communicate with both counsel jointly and in writing, never ex parte, and we clear a conflict check before accepting any appointment.

What happens at closing and after?

The title company pays liens, closing costs, commissions, and approved fees from the proceeds, then disburses the net proceeds as the order directs. We file a final report and accounting, and when the Court approves it, the receiver is discharged and the bond is released.

Is Vern Services a law firm?

Vern Services is not a law firm and does not provide legal advice. Counsel drafts all orders, and the Court decides their terms.