TITLE 25
Property
PART III
RESIDENTIAL LANDLORD-TENANT CODE
CHAPTER 59. TENANT'S RECEIVERSHIP
Petition for receivership; grounds, notice and
jurisdiction.
Any tenant or group of tenants may petition for the
establishment of a receivership in a Justice of the Peace Court upon
the grounds that there has existed for 5 days
or more after notice to the landlord:
(1) If the rental agreement, or any state or local statute,
code, regulation or ordinance, places a duty upon the landlord to so
provide, a lack of heat, or of running water, or of light, or of
electricity, or of adequate sewage facilities;
(2) Any other conditions imminently dangerous to the life,
health or safety of the tenant. Title 25, Chap. 59, § 5901
Necessary parties defendant.
(a) Petitioners shall join as defendants:
(1) All parties duly disclosed to any of them in accordance with
§ 5106; and
(2) All parties whose interest in the property is:
(b) Petitioner shall not be prejudiced by a failure to
join any other interested parties. Title 25, Chap. 59, § 5902
Defenses.
It shall be sufficient defense to this proceeding, if any
defendant of record establishes that:
(1) The condition or conditions described in the petition do not
exist at the time of trial; or
(2) The condition or conditions alleged in the petition have
been caused by the wilful or grossly negligent acts of 1 or more of
the petitioning tenants or members of his or their families or by
other persons on the premises with his or their consent; or
(3) Such condition or conditions would have been corrected,
were it not for the refusal by any petitioner to allow reasonable
access. Title 25, Chap. 59, § 5903
Stay of judgment by defendant.
(a) If, after a trial, the Court shall determine that the
petition should be granted, the Court shall immediately enter
judgment thereon and appoint a receiver as authorized herein;
provided, however, prior to the entry to judgment and appointment of
a receiver, the owner or any mortgagee or lienor of record or other
person having an interest in the property may apply to the Court to
be permitted to remove or remedy the conditions specified in the
petition. If such person demonstrates the ability to perform
promptly the necessary work and posts security for the performance
thereof within the time, and in the amount and manner, deemed
necessary by the Court, then the Court may stay judgment and issue
an order permitting such person to perform the work within a time
fixed by the Court and requiring such person to report to the Court
periodically on the progress of the work. The Court shall retain
jurisdiction over the matter until the work is completed.
(b) If, after the issuance of an order under the
foregoing provision but before the time fixed in such order for the
completion of the work prescribed therein, there is reason to
believe that the work will not be completed pursuant to the court's
order or that the person permitted to do the same is not proceeding
with due diligence, the Court or the petitioners, upon notice to all
parties to the proceeding, may move that a hearing be held to
determine whether judgment should be rendered immediately as
provided in the following subsection.
(c)
(1) If, upon a hearing authorized in the preceding
subsection, the Court shall determine that such party is not
proceeding with due diligence, or upon the actual failure of such
person to complete the work in accordance with the provisions of the
order, the Court shall appoint a receiver as authorized herein.
(2) Such judgment shall direct the receiver to apply the
security posted to executing the powers and duties as described
herein.
(3) In the event that the amount of such security should be
insufficient to accomplish the above objectives, such judgment shall
direct the receiver to collect the rents, profits and issues to the
extent of the deficiency. In the event that the security should
exceed the amount necessary to accomplish the above objectives, such
judgment shall direct the receiver to return the excess to the
person posting the security. Title 25, Chap. 59, § 5904
Receivership procedures.
The receiver shall be the Division of Consumer Protection of the
State or its successor agency.
(1) Upon its appointment, the receiver must make within 15 days
an independent finding whether there is proper cause shown for the
need for rent to be paid to it and for the employment of a private
contractor to correct the condition complained of in § 5901 of this
title and found by the Court to exist.
(2) If the receiver shall make such a finding, it shall file
a copy of the finding with the recorder of deeds of the county where
the property lies and it shall be a lien on that property where the
violation complained of exists.
(3) Upon completion of the aforesaid contractual work and
full payment of the contractor, the receiver shall file a
certification of such with the recorder of deeds of the appropriate
county, and this filing shall release the aforesaid lien.
(4) The receiver shall forthwith give notice to all
lienholders of record.
(5) If the receiver shall make a finding at such time or any
other time that for any reason the appointment of a receiver is not
appropriate, it shall be discharged upon notification of the Court
and all interested parties and shall make legal distribution
of any funds in its possession. Title 25, Chap. 59, § 5905
Powers and duties of the receiver.
The receiver shall have all the powers and duties accorded a
receiver foreclosing a mortgage on real property and all other
powers and duties deemed necessary by the Court. Such powers and
duties shall include, but are not necessarily limited to, collecting
and using all rents and profits of the property, prior to and
despite any assignment of rent, for the purposes of:
(1) Correcting the condition or conditions alleged in the
petition;
(2) Materially complying with all applicable provisions of
any state or local statute, code, regulation or ordinance governing
the maintenance, construction, use or appearance of the building and
surrounding grounds;
(3) Paying all expenses reasonably necessary to the proper
operation and management of the property including insurance,
mortgage payments, taxes and assessments and fees for the services
of the receiver and any agent he should hire;
(4) Compensating the tenants for whatever deprivation of
their rental agreement rights resulted from the condition or
conditions alleged in the petition; and
(5) Paying the costs of the receivership proceeding. Title
25, Chap. 59, § 5906
Discharge of the receiver.
(a) In addition to those situations described in § 5905,
the receiver may also be discharged when:
(1) The condition or conditions alleged in the petition have
been remedied;
(2) The property materially complies with all applicable
provisions of any state or local statute, code, regulation or
ordinance governing the maintenance, construction, use or appearance
of the building and the surrounding grounds;
(3) The costs of the above work and any other costs as
authorized herein have been paid or reimbursed from the rents and
profits of the property; and
(4) The surplus money, if any, has been paid over to the
owner.
(b) Upon subsections (a)(1) and (2) of this section being
satisfied, the owner, mortgagee or any lienor may apply for the
discharge of the receiver after paying to the latter all moneys
expended by him and all other costs which have not been paid or
reimbursed from the rent and profits of the property.
(c) If the Court determines that future profits of the
property will not cover the costs of satisfying subsections (a)(1)
and (2) of this section, the Court may discharge the receiver and
order such action as would be appropriate in the situation,
including but not limited to terminating the rental agreement and
ordering the vacation of the building within a specified time. In no
case shall the Court permit repairs which cannot be paid out of the
future profits of the property. Title 25, Chap. 59, § 5907
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