A receiver is a person or organization appointed by a court to temporarily manage a property in order to enforce the state Sanitary Code and respond to an irresponsible or absentee landlord. Tenants can use receivership as a strategy to accomplish needed repairs and prevent a building from deteriorating.

Tenants get a receiver by asking a court to appoint one. If a court appoints a receiver, the receiver usually is empowered by a court to:

• Make repairs and improve the conditions.
• Manage the building.
• Collect the rents.
• Pay expenses, including taxes and insurance.

Additional duties of a receiver vary depending upon what tenants request and what a judge eventually puts in a written receivership order.

a. Filing a Tenant Petition or Civil Complaint

If you decide that you want a receiver, you need to go to court. If there is a housing court in your area, go there. Housing courts have more experience in dealing with receiverships than other courts do. If there is no housing court, you must go to the local district or superior court. For more about different courts see the Chapter 14: Using the Court System - Massachusetts Court System.

When you go to court, it is best to bring as many other tenants from your building as possible. You can complete the Tenant Petition for Enforcement of the State Sanitary Code (Form 14) or your attorney can draft a complaint for you which could include claims for money damages due to bad conditions.

In the petition or complaint you must specifically request the court to appoint a receiver. You must also describe the bad conditions. Attach copies of the Board of Health reports or, if an inspection has not been made yet, the date you requested an inspection. It is best to get an inspection before you file a petition or complaint.

b. Getting an Order of Notice

When you file the tenant petition or complaint with the court and request a receiver, the clerk's office must issue a document called an "Order of Notice." This document requires the landlord to:

• Appear in court for a hearing at a designated date and time within 14 days of when the court issues the Order of Notice; and
• File an answer to the petition and include the names and addresses of any mortgagees or lienors of record.

c. Serving the Petition or Complaint and Order of Notice

You must then take a copy of your tenant petition or complaint and the original Order of Notice to a sheriff or a constable. The sheriff or constable must deliver (serve) these documents on your landlord at least 7 days before the hearing date in the Order of Notice. The sheriff or constable then fills out on the original Order of Notice how they delivered the Order of Notice and either you or the sheriff or constable file this original with the court.

If your tenant petition asks for the appointment of a receiver, then the landlord must (within 3 days) provide you with a written list of all the mortgagees and lienors of record. You must then send a copy of your tenant petition and notice of the hearing date, time, and place to each of the mortgagees and lienors by certified mail at least 14 days before the hearing (or less than 14 days if the court so orders).

d. Payment or Waiver of Fees

There is a court fee to pay for filing a tenant petition or complaint and a fee for serving the petition or complaint on your landlord. If you are a low-income person, you can file a form asking the court to waive or eliminate the filing fee and to pay for the cost of service on your landlord. This form is called an Affidavit of Indigency. To see a copy, go to Affidavit of Indigency (Booklet 9).

e. Preparing for the Hearing

As soon as you file a tenant petition, you should begin researching who might be a good receiver, so that when you go back to court, you are prepared to give the judge your recommendation. (See How to Get a Good Receiver in this chapter.) It is also important to take to court any evidence showing the conditions of the building and any evidence that shows tenants' efforts to get the landlord to make repairs in order to show to the court that a receiver is necessary.

f. The Hearing

When you go to court for the hearing, be prepared to tell a judge how bad the conditions are and why you need a receiver. Read Chapter 14: Using the Court System for information about how to prepare for court. On the day that you go to court, bring any information or pictures that will help the judge understand how your landlord has not properly managed the building. Make sure the pictures have a date on the back of them so that the court will know when the pictures were taken.

Since receivership is a remedy of last resort, you may want to first ask the judge to order you to pay your rent (or a percentage of your rent) to the court and give the landlord another chance to make the repairs herself according to a written repair schedule approved by the court. If your rent is subsidized by a housing authority or other entity, you could also ask the court to order the subsidy provider to pay the subsidy into court until the landlords has made the repairs. 

If the court decides to appoint a receiver, a judge must prepare a receivership order. This order says: 1) who the receiver is, and 2) what powers and duties the receiver will have.

It is important for tenants to work together, and if possible with a lawyer, to develop a proposed order to give to the court. Your proposed order should outline what specific powers and duties you want a judge to include in a receivership order. For example, a receivership order can:

• Require that all funds received by a receiver first be used to make emergency repairs.
• Require the receiver to install a security system for vacant units.
• Order the receiver to make reasonable efforts to keep rents affordable.
• Lower tenants' rents by 50% until repairs are made and the court orders tenants to pay more rent.
• Require the receiver to submit monthly project reports to the tenants and the court, showing what money has been received and how money is being spent.
• Authorize the receiver to seek and obtain rental subsidies for some of the apartments.
   

a. Possible Receivers

When you go to court to request a receiver, you will have the most control over who the receiver is—and you may have a quicker result—if you suggest to the court possible people, organizations, or companies that are available to be a receiver. But remember— while you may suggest or recommend possible receivers, it is the court that ultimately has the power to appoint a receiver.

It is a good idea to find out before you go to court about a judge's track record in appointing receivers. Who has the judge appointed as receivers? Did the judge take the tenant's recommendations? What kind of job did that person do? Network with other groups to find out who would be qualified. The following sections suggest a few places to look for possible receivers.

b. Local Nonprofit Organization

A local community development corporation (CDC), local nonprofit housing organization, or housing authority may be a good place to start. Nonprofit housing organizations have experience operating and developing housing and keeping rents low. Because an organization is nonprofit, it may be less likely to charge a fee above its own expenses for its services as receiver. Also, if your goal is to keep your housing affordable for the long term, this goal may best be realized through a nonprofit's involvement. A nonprofit might in the future purchase the property or help you and a group of tenants buy it. A list of nonprofit housing organizations is in the Directory.

c. Private Management Company

If a nonprofit organization is not available, you may also consider a private management company. The drawback of a private company is that its decision to become receiver will be driven in part by its desire to make money. For this reason, it is more likely that a for profit company will charge a higher fee for its services than a nonprofit organization. In order to maximize profits, a for profit management company may not be as aggressive in making necessary repairs. It may also be more aggressive in collecting rents and evicting tenants. On the plus side, a management company is in the business of managing properties. It has expertise in operating and running residential property.

d. Experienced Individuals

Individuals can also be receivers. For example, experienced contractors have acted as receivers. Attorneys who have experience in nonprofit housing development have also acted as receivers. The Boston and Western Housing Courts have a list of receivers which you may want to review (if you live in or near the area served by these courts).

As a practical matter, in many cases, even if every tenant paid the full rent, a receiver may not have enough money to make the necessary repairs. Here are some ways to get more money for the receivership.

• Get banks or organizations that lend groups money, such as local revolving loan funds, to lend money to the receiver by offering them what's called a "priority lien" or "super lien." This means that when the building is sold, the bank or organization that gave the loan can get back the money they lent before any other bank or person recovers what they are owed. They have first priority. In some cases, tenant groups and local nonprofit development groups have used specific projects as the motivation to actually create local revolving loan pools.
• Negotiate with the bank that holds the mortgage on the property to give the receiver money for repairs. Since the bank has an interest in preserving the value of the property, it has a reason to pay for repairs. Because banks do not want to be held legally responsible for the condition of the property, if you propose that a bank take steps that make it look like it is legally responsible, such as paying for repairs, it may not cooperate. You may relieve a bank of these fears by having a judge indicate in an order that the bank's money for repairs will not make it legally responsible for the property.
• Investigate other possible sources of funds, such as local Community Development Block Grant (CDBG) funds; funds from a local affordable housing trust fund; local rehabilitation, energy conservation, and deleading funds; or state funds.
• Ask the court to order the landlord to provide funds from other property that she owns.
   

A receivership, while it may be needed to repair bad conditions, can be one of those bad things that can turn into something good. When a landlord abandons a building or files for bankruptcy, tenants can organize, grab onto all the uncertainty in their situation, and make their homes better places to live.

As a tenant, you may be able to work with your receiver to help motivate a bank to sell to a nonprofit organization at a below market price. Under both federal and state laws called the Community Reinvestment Act (CRA), the government requires banks to meet the credit and banking needs of low- and moderate-income people in the bank's "designated lending area." Tenants have used CRA to negotiate below market loans in order to buy their buildings

A tenant group can also become a nonprofit organization and try to purchase the building itself. There are resources to provide tenants with legal help and groups that help tenants develop strong, democratic, and effective organizations. For information about where to get legal services and tenant-organizing assistance, see the Directory.

You can also seek out local city officials from the Board of Health or the community development department to get their help in moving the banks to act responsibly in terms of providing financing on good terms. Local governments may have Community Development Block Grant funds which tenants can use to hire organizers, staff, and experts to help them purchase their building.