Sometimes owners clamor for a Receiver to be appointed because they don’t like what the board is doing with the money. Sometimes a board thinks putting the association into receivership is the answer when the association is broke. (It’s better than resigning and abandoning ship with no captain in sight but not necessarily the best remedy.) Since in California bankruptcy is not generally a good option (or even a viable one) some associtaions end up in receivership when there are serious money issues or a lack of board volunteers, but an association can fall down into a deep hole before that happens if no one actively files a petition for receivership until someone finds their property has lost its value. So it’s a catch-22 situation, get a receiver or get going and address the hard issues, mainly getting enough money to keep the HOA above water.
Before any HOA goes there (to receiver) get some advice as to alternatives because this is what happens: The receiver, often a person who has no HOA expereience whatsoever, is put in charge of managing the association. He or she can ask the court to impose assessments for just about anything he or she feels is necessary, including the Receiver fees, which can be quite staggering, often much more than it would cost to hire a management company to help a board or association crawl out of a rut. And guess who pays those assessments? Owners with money – that’s who. They pay for their share plus covering the share of owners who skip and cannot be found.
If you think your association is hurting now, dive in and help research options and talk about how to raise necessary funds instead of dragging the association down into receivership. It’s not pretty.