ENGROSSED ORIGINAL
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A BILL
25-485
IN THE COUNCIL OF THE DISTRICT OF COLUMBIA
__________________________
To enact the Uniform Commercial Real Estate Receivership Act to establish uniform standards 1
under which the Superior Court may appoint a receiver; to give any interested parties the 2
right to notice and an opportunity for a hearing before the Superior Court issues an order 3
under this act; to require a receiver to be independent; to give a receiver the status of a lien 4
creditor with respect to receivership property, subject to pre-existing perfected security 5
interests; to set forth the receiver’s presumptive powers and those the receiver may exercise 6
only with the Superior Court’s approval; to set forth the duties of both the receiver and the 7
owner of receivership property; to authorize receivers to use or sell receivership property 8
in the ordinary course of business, but require that they obtain get the Superior Court’s 9
approval for uses or transfers of property outside the ordinary course of business; and for 10
other purposes. 11
12
BE IT ENACTED BY THE COUNCIL OF THE DISTRICT OF COLUMBIA, That this 13
act may be cited as the “Uniform Commercial Real Estate Receivership Act of 2024”. 14
Sec. 2. Short title. 15
This act may be cited as the “Uniform Commercial Real Estate Receivership Act”. 16
Sec. 3. Definitions. 17
For the purposes of this act, the term: 18
(1) “Affiliate” means: 19
(A) With respect to an individual: 20
(i) A companion of the individual; 21 ENGROSSED ORIGINAL
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(ii) A lineal ancestor or descendant, whether by blood or adoption, 22
of: 23
(I) The individual; or 24
(II) A companion of the individual; 25
(iii) A companion of an ancestor or descendant described in sub-26
subparagraph (ii) of this subparagraph; 27
(iv) A sibling, aunt, uncle, great aunt, great uncle, first cousin, niece, 28
nephew, grandniece, or grandnephew of the individual, whether related by the whole or the half 29
blood or adoption, or a companion of any of them; or 30
(v) Any other individual occupying the residence of the individual; 31
and 32
(B) With respect to a person other than an individual: 33
(i) Another person that directly or indirectly controls, is controlled 34
by, or is under common control with the person; 35
(ii) An officer, director, manager, member, partner, employee, or 36
trustee or other fiduciary of the person; or 37
(iii) A companion of, or an individual occupying the residence of, 38
an individual described in sub- subparagraph (i) or (ii) of this subparagraph. 39
(2) “Companion” means: 40
(A) The spouse of an individual; 41 ENGROSSED ORIGINAL
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(B) The domestic partner of an individual; or 42
(C) Another individual in a civil union with an individual. 43
(3) “District” means the District of Columbia. 44
(4) “Executory contract” means a contract, including a lease, under which each 45
party has an unperformed obligation and the failure of a party to complete performance would 46
constitute a material breach. 47
(5) “Governmental unit” means an office, department, division, bureau, board, 48
commission, or other agency of the District or a subdivision of the District. 49
(6) “Lien” means an interest in property which secures payment or performance of 50
an obligation. 51
(7) “Mortgage” means a record, however denominated, that creates or provides for 52
a consensual lien on real property or rents, even if it also creates or provides for a lien on personal 53
property. 54
(8) “Mortgagee” means a person entitled to enforce an obligation secured by a 55
mortgage. 56
(9) “Mortgagor” means a person that grants a mortgage or a successor in ownership 57
of the real property described in the mortgage. 58
(10) “Owner” means the person for whose property a receiver is appointed. 59 ENGROSSED ORIGINAL
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(11) “Person” means an individual, estate, business or nonprofit entity, public 60
corporation, government or governmental subdivision, agency, or instrumentality, or other legal 61
entity. 62
(12) “Proceeds” means the following property: 63
(A) Whatever is acquired on the sale, lease, license, exchange, or other 64
disposition of receivership property; 65
(B) Whatever is collected on, or distributed on account of, receivership 66
property; 67
(C) Rights arising out of receivership property; 68
(D) To the extent of the value of receivership property, claims arising out 69
of the loss, nonconformity, or interference with the use of, defects or infringement of rights in, or 70
damage to the property; or 71
(E) To the extent of the value of receivership property and to the extent 72
payable to the owner or mortgagee, insurance payable by reason of the loss or nonconformity of, 73
defects or infringement of rights in, or damage to the property. 74
(13) “Property” means all of a person’s right, title, and interest, both legal and 75
equitable, in real and personal property, tangible and intangible, wherever located and however 76
acquired. The term “property” includes proceeds, products, offspring, rents, or profits of or from 77
the property. 78 ENGROSSED ORIGINAL
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(14) “Receiver” means a person appointed by the Superior Court as the Superior 79
Court’s agent, and subject to the Superior Court’s direction, to take possession of, manage, and, if 80
authorized by this act or Superior Court order, transfer, sell, lease, license, exchange, collect, or 81
otherwise dispose of receivership property. 82
(15) “Receivership” means a proceeding in which a receiver is appointed. 83
(16) “Receivership property” means the property of an owner which is described in 84
the order appointing a receiver or a subsequent order. The term “receivership property” includes 85
any proceeds, products, offspring, rents, or profits of or from the property. 86
(17) “Record”, used as a noun, means information that is inscribed on a tangible 87
medium or that is stored on an electronic or other medium and is retrievable in perceivable form. 88
(18) “Rents” means: 89
(A) Sums payable for the right to possess or occupy, or for the actual 90
possession or occupation of, real property of another person; 91
(B) Sums payable to a mortgagor under a policy of rental-interruption 92
insurance covering real property; 93
(C) Claims arising out of a default in the payment of sums payable for the 94
right to possess or occupy real property of another person; 95
(D) Sums payable to terminate an agreement to possess or occupy real 96
property of another person; 97 ENGROSSED ORIGINAL
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(E) Sums payable to a mortgagor for payment or reimbursement of expenses 98
incurred in owning, operating, and maintaining real property or constructing or installing 99
improvements on real property; or 100
(F) Other sums payable under an agreement relating to the real property of 101
another person which constitute rents under law of the District other than this act. 102
(19) “Secured obligation” means an obligation the payment or performance of 103
which is secured by a security agreement. 104
(20) “Security agreement” means an agreement that creates or provides for a lien. 105
(21) “Sign” means, with present intent to authenticate or adopt a record: 106
(A) To execute or adopt a tangible symbol; or 107
(B) To attach to or logically associate with the record an electronic sound, 108
symbol, or process. 109
(22) “State” means a state of the United States, the District of Columbia, Puerto 110
Rico, the United States Virgin Islands, or any territory or insular possession subject to the 111
jurisdiction of the United States. 112
(23) “Superior Court” means the Superior Court of the District of Columbia. 113
Sec. 4. Notice and opportunity for hearing. 114
(a) Except as otherwise provided in subsection (b) of this section, the Superior Court may 115
issue an order under this act only after notice and opportunity for a hearing appropriate in the 116
circumstances. 117 ENGROSSED ORIGINAL
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(b) The Superior Court may issue an order under this act: 118
(1) Without prior notice if the circumstances require issuance of an order before 119
notice is given; 120
(2) After notice and without a prior hearing if the circumstances require issuance 121
of an order before a hearing is held; or 122
(3) After notice and without a hearing if no interested party timely requests a 123
hearing. 124
Sec. 5. Scope; exclusions. 125
(a) Except as otherwise provided in subsection (b) or (c) of this section, this act applies to 126
a receivership for an interest in real property and any personal property related to or used in 127
operating the real property. 128
(b) This act does not apply to a receivership for an interest in real property improved by 129
one to 4 dwelling units unless: 130
(1) The interest is used for agricultural, commercial, industrial, or mineral-131
extraction purposes, other than incidental uses by an owner occupying the property as the owner’s 132
primary residence; 133
(2) The interest secures an obligation incurred at a time when the property was used 134
or planned for use for agricultural, commercial, industrial, or mineral-extraction purposes; 135
(3) The owner planned or is planning to develop the property into one or more 136
dwelling units to be sold or leased in the ordinary course of the owner’s business; or 137 ENGROSSED ORIGINAL
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(4) The owner is collecting or has the right to collect rents or other income from the 138
property from a person other than an affiliate of the owner. 139
(c) This act does not apply to a receivership authorized by law of the District other than 140
this act in which the receiver is a governmental unit or an individual acting in an official capacity 141
on behalf of the governmental unit except to the extent provided by the other law. 142
(d) This act does not limit the authority of the Superior Court to appoint a receiver under 143
law of the District other than this act. 144
(e) Unless displaced by a particular provision of this act, the principles of law and equity 145
supplement this act. 146
Sec. 6. Power of Superior Court. 147
The Superior Court has exclusive jurisdiction to direct the receiver and determine any 148
controversy related to the receivership or receivership property. 149
Sec. 7. Appointment of receiver. 150
(a) The Superior Court may appoint a receiver: 151
(1) Before judgment, to protect a party that demonstrates an apparent right, title, or 152
interest in real property that is the subject of the action, if the property or its revenue-producing 153
potential: 154
(A) Is being subjected to or is in danger of waste, loss, dissipation, or 155
impairment; or 156
(B) Has been or is about to be the subject of a voidable transaction; 157 ENGROSSED ORIGINAL
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(2) After judgment: 158
(A) To carry the judgment into effect; or 159
(B) To preserve nonexempt real property pending appeal or when an 160
execution has been returned unsatisfied and the owner refuses to apply the property in satisfaction 161
of the judgment; 162
(3) In an action in which a receiver for real property may be appointed on equitable 163
grounds; or 164
(4) During the time allowed for redemption, to preserve real property sold in an 165
execution or foreclosure sale and secure its rents to the person entitled to the rents. 166
(b) In connection with the foreclosure or other enforcement of a mortgage, the Superior 167
Court may appoint a receiver for the mortgaged property if: 168
(1) Appointment is necessary to protect the property from waste, loss, transfer, 169
dissipation, or impairment; 170
(2) The mortgagor agreed in a signed record to appointment of a receiver on default; 171
(3) The owner agreed, after default and in a signed record, to appointment of a 172
receiver; 173
(4) The property and any other collateral held by the mortgagee are not sufficient 174
to satisfy the secured obligation; 175
(5) The owner fails to turn over to the mortgagee proceeds or rents the mortgagee 176
was entitled to collect; or 177 ENGROSSED ORIGINAL
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(6) The holder of a subordinate lien obtains appointment of a receiver for the 178
property. 179
(c) The Superior Court may condition appointment of a receiver without prior notice under 180
section 3(b)(1) or without a prior hearing under section 3(b)(2) on the giving of security by the 181
person seeking the appointment for the payment of damages, reasonable attorney’s fees, and costs 182
incurred or suffered by any person if the Superior Court later concludes that the appointment was 183
not justified. If the Superior Court later concludes that the appointment was justified, the Superior 184
Court shall release the security. 185
Sec. 8. Disqualification from appointment as receiver; disclosure of interest. 186
(a) The Superior Court may not appoint a person as receiver unless the person submits to 187
the Superior Court a statement under penalty of perjury that the person is not disqualified. 188
(b) Except as otherwise provided in subsection (c) of this section, a person is disqualified 189
from appointment as receiver if the person: 190
(1) Is an affiliate of a party; 191
(2) Has an interest materially adverse to an interest of a party; 192
(3) Has a material financial interest in the outcome of the action, other than 193
compensation the Superior Court may allow the receiver; 194
(4) Has a debtor-creditor relationship with a party; or 195
(5) Holds an equity interest in a party, other than a noncontrolling interest in a 196
publicly- traded company. 197 ENGROSSED ORIGINAL
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(c) A person is not disqualified from appointment as receiver solely because the person: 198
(1) Was appointed receiver or is owed compensation in an unrelated matter 199
involving a party or was engaged by a party in a matter unrelated to the receivership; 200
(2) Is an individual obligated to a party on a debt that is not in default and was 201
incurred primarily for personal, family, or household purposes; or 202
(3) Maintains with a party a deposit account, as that term is defined in D.C. Official 203
Code § 28:9- 102(a)(29). 204
(d) A person seeking appointment of a receiver may nominate a person to serve as receiver, 205
but the Superior Court is not bound by the nomination. 206
Sec. 9. Receiver’s bond; alternative security. 207
(a) Except as otherwise provided in subsection (b) of this section, a receiver shall post with 208
the Superior Court a bond that: 209
(1) Is conditioned on the faithful discharge of the receiver’s duties; 210
(2) Has one or more sureties approved by the Superior Court ; 211
(3) Is in an amount the Superior Court specifies; and 212
(4) Is effective as of the date of the receiver’s appointment. 213
(b) The Superior Court may approve the posting by a receiver with the Superior Court of 214
alternative security, such as a letter of credit or deposit of funds. The receiver may not use 215
receivership property as alternative security. Interest that accrues on deposited funds must be paid 216
to the receiver on the receiver’s discharge. 217 ENGROSSED ORIGINAL
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(c) The Superior Court may authorize a receiver to act before the receiver posts the bond 218
or alternative security required by this section. 219
(d) A claim against a receiver’s bond or alternative security must be made not later than 220
one year after the date the receiver is discharged. 221
Sec. 10. Status of receiver as lien creditor. 222
On appointment of a receiver, the receiver has the status of a lien creditor under: 223
(1) Article 9 of Title 28 of the District of Columbia Official Code as to 224
receivership property that is personal property or fixtures; and 225
(2) Section 499 of An Act To establish a code of law for the District of 226
Columbia, approved March 3, 1901 (31 Stat. 1189; D.C. Official Code § 42–401), as to 227
receivership property that is real property. 228
Sec. 11. Security agreement covering after-acquired property. 229
Except as otherwise provided by law of the District other than this act, property that a 230
receiver or owner acquires after appointment of the receiver is subject to a security agreement 231
entered into before the appointment to the same extent as if the Superior Court had not appointed 232
the receiver. 233 ENGROSSED ORIGINAL
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Sec. 12. Collection and turnover of receivership property. 234
(a) Unless the Superior Court orders otherwise, on demand by a receiver: 235
(1) A person that owes a debt that is receivership property and is matured or 236
payable on demand or on order shall pay the debt to or on the order of the receiver, except to the 237
extent the debt is subject to setoff or recoupment; and 238
(2) Subject to subsection (c) of this section, a person that has possession, custody, 239
or control of receivership property shall turn the property over to the receiver. 240
(b) A person that has notice of the appointment of a receiver and owes a debt that is 241
receivership property may not satisfy the debt by payment to the owner. 242
(c) If a creditor has possession, custody, or control of receivership property and the 243
validity, perfection, or priority of the creditor’s lien on the property depends on the creditor’s 244
possession, custody, or control, the creditor may retain possession, custody, or control until the 245
Superior Court orders adequate protection of the creditor’s lien. 246
(d) Unless a bona fide dispute exists about a receiver’s right to possession, custody, or 247
control of receivership property, the Superior Court may sanction as civil contempt a person’s 248
failure to turn the property over when required by this section. 249
Sec. 13. Powers and duties of receiver. 250
(a) Except as limited by Superior Court order or law of the District other than this act, a 251
receiver may: 252
(1) Collect, control, manage, conserve, and protect receivership property; 253 ENGROSSED ORIGINAL
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(2) Operate a business constituting receivership property, including preservation, 254
use, sale, lease, license, exchange, collection, or disposition of the property in the ordinary 255
course of business; 256
(3) In the ordinary course of business, incur unsecured debt and pay expenses 257
incidental to the receiver’s preservation, use, sale, lease, license, exchange, collection, or 258
disposition of receivership property; 259
(4) Assert a right, claim, cause of action, or defense of the owner which relates to 260
receivership property; 261
(5) Seek and obtain instruction from the Superior Court concerning receivership 262
property, exercise of the receiver’s powers, and performance of the receiver’s duties; 263
(6) On subpoena, compel a person to submit to examination under oath, or to 264
produce and permit inspection and copying of designated records or tangible things, with respect 265
to receivership property or any other matter that may affect administration of the receivership; 266
(7) Engage a professional as provided in section 15; 267
(8) Apply to a court of another state for appointment as ancillary receiver with 268
respect to receivership property located in that state; and 269
(9) Exercise any power conferred by Superior C ourt order, this act, or law of the 270
District other than this act. 271
(b) With the Superior Court’s approval, a receiver may: 272 ENGROSSED ORIGINAL
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(1) Incur debt for the use or benefit of receivership property other than in the 273
ordinary course of business; 274
(2) Make improvements to receivership property; 275
(3) Use or transfer receivership property other than in the ordinary course of 276
business as provided in section 16; 277
(4) Adopt or reject an executory contract of the owner as provided in section 17; 278
(5) Pay compensation to the receiver as provided in section 21, and to each 279
professional engaged by the receiver as provided in section 15; 280
(6) Recommend allowance or disallowance of a claim of a creditor as provided in 281
section 20; and 282
(7) Make a distribution of receivership property as provided in section 20. 283
(c) A receiver shall: 284
(1) Prepare and retain appropriate business records, including a record of each 285
receipt, disbursement, and disposition of receivership property; 286
(2) Account for receivership property, including the proceeds of a sale, lease, 287
license, exchange, collection, or other disposition of the property; 288
(3) File with the Office of the Recorder of Deeds a copy of the order appointing 289
the receiver and, if a legal description of the real property is not included in the order, the legal 290
description; 291 ENGROSSED ORIGINAL
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(4) Disclose to the Superior Court any fact arising during the receivership which 292
would disqualify the receiver under section 7; and 293
(5) Perform any duty imposed by Superior Court order, this act, or law of the 294
District other than this act. 295
(d) The powers and duties of a receiver may be expanded, modified, or limited by the 296
Superior Court’s order. 297
Sec. 14. Duties of owner. 298
(a) An owner shall: 299
(1) Assist and cooperate with the receiver in the administration of the receivership 300
and the discharge of the receiver’s duties; 301
(2) Preserve and turn over to the receiver all receivership property in the owner’s 302
possession, custody, or control; 303
(3) Identify all records and other information relating to the receivership property, 304
including a password, authorization, or other information needed to obtain or maintain access to 305
or control of the receivership property, and make available to the receiver the records and 306
information in the owner’s possession, custody, or control; 307
(4) On subpoena, submit to examination under oath by the receiver concerning the 308
acts, conduct, property, liabilities, and financial condition of the owner or any matter relating to 309
the receivership property or the receivership; and 310 ENGROSSED ORIGINAL
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(5) Perform any duty imposed by Superior Court order, this act, or law of the 311
District other than this act. 312
(b) If an owner is a person other than an individual, this section applies to each officer, 313
director, manager, member, partner, trustee, or other person exercising or having the power to 314
exercise control over the affairs of the owner. 315
(c) If a person knowingly fails to perform a duty imposed by this section, the Superior 316
Court may: 317
(1) Award the receiver actual damages caused by the person’s failure, reasonable 318
attorney’s fees, and costs; and 319
(2) Sanction the failure as civil contempt. 320
Sec. 15. Stay; injunction. 321
(a) Except as otherwise provided in subsection (d) of this section or ordered by the 322
Superior Court, an order appointing a receiver operates as a stay, applicable to all persons, of an 323
act, action, or proceeding: 324
(1) To obtain possession of, exercise control over, or enforce a judgment against 325
receivership property; and 326
(2) To enforce a lien against receivership property to the extent the lien secures a 327
claim against the owner which arose before entry of the order. 328 ENGROSSED ORIGINAL
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(b) Except as otherwise provided in subsection (d) of this section, the Superior Court may 329
enjoin an act, action, or proceeding against or relating to receivership property if the injunction is 330
necessary to protect the property or facilitate administration of the receivership. 331
(c) A person whose act, action, or proceeding is stayed or enjoined under this section may 332
apply to the Superior Court for relief from the stay or injunction for cause. 333
(d) An order under subsection (a) or (b) of this section does not operate as a stay or 334
injunction of: 335
(1) An act, action, or proceeding to foreclose or otherwise enforce a mortgage by 336
the person seeking appointment of the receiver; 337
(2) An act, action, or proceeding to perfect, or maintain or continue the perfection 338
of, an interest in receivership property; 339
(3) Commencement or continuation of a criminal proceeding; 340
(4) Commencement or continuation of an action or proceeding, or enforcement of 341
a judgment other than a money judgment in an action or proceeding, by a governmental unit to 342
enforce its police or regulatory power; or 343
(5) Establishment by a governmental unit of a tax liability against the owner or 344
receivership property or an appeal of the liability. 345
(e) The Superior Court may void an act that violates a stay or injunction under this 346
section. 347 ENGROSSED ORIGINAL
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(f) If a person knowingly violates a stay or injunction under this section, the Superior 348
Court may: 349
(1) Award actual damages caused by the violation, reasonable attorney’s fees, and 350
costs; and 351
(2) Sanction the violation as civil contempt. 352
Sec. 16. Engagement and compensation of professional. 353
(a) With the Superior Court’s approval, a receiver may engage an attorney, accountant, 354
appraiser, auctioneer, broker, or other professional to assist the receiver in performing a duty or 355
exercising a power of the receiver. The receiver shall disclose to the Superior Court: 356
(1) The identity and qualifications of the professional; 357
(2) The scope and nature of the proposed engagement; 358
(3) Any potential conflict of interest; and 359
(4) The proposed compensation. 360
(b) A person is not disqualified from engagement under this section solely because of the 361
person’s engagement by, representation of, or other relationship with the receiver, a creditor, or a 362
party. This act does not prevent the receiver from serving in the receivership as an attorney, 363
accountant, auctioneer, or broker when authorized by law. 364
(c) A receiver or professional engaged under subsection (a) of this section shall file with 365
the Superior Court an itemized statement of the time spent, work performed, and billing rate of 366 ENGROSSED ORIGINAL
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each person that performed the work and an itemized list of expenses. The receiver shall pay the 367
amount approved by the Superior Court. 368
Sec. 17. Use or transfer of receivership property not in ordinary course of business. 369
(a) For the purposes of this section, the term “good faith” means honesty in fact and the 370
observance of reasonable commercial standards of fair dealing. 371
(b) With the Superior Court’s approval, a receiver may use receivership property other 372
than in the ordinary course of business. 373
(c) With the Superior Court’s approval, a receiver may transfer receivership property 374
other than in the ordinary course of business by sale, lease, license, exchange, or other 375
disposition. Unless the agreement of sale provides otherwise, a sale under this section is free and 376
clear of a lien of the person that obtained appointment of the receiver, any subordinate lien, and 377
any right of redemption but is subject to a senior lien. 378
(d) A lien on receivership property which is extinguished by a transfer under subsection 379
(c) of this section attaches to the proceeds of the transfer with the same validity, perfection, and 380
priority the lien had on the property immediately before the transfer, even if the proceeds are not 381
sufficient to satisfy all obligations secured by the lien. 382
(e) A transfer under subsection (c) of this section may occur by means other than a public 383
auction sale. A creditor holding a valid lien on the property to be transferred may purchase the 384
property and offset against the purchase price part or all of the allowed amount secured by the 385 ENGROSSED ORIGINAL
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lien, if the creditor tenders funds sufficient to satisfy in full the reasonable expenses of transfer 386
and the obligation secured by any senior lien extinguished by the transfer. 387
(f) A reversal or modification of an order approving a transfer under subsection (c) of 388
this section does not affect the validity of the transfer to a person that acquired the property in 389
good faith or revive against the person any lien extinguished by the transfer, whether the person 390
knew before the transfer of the request for reversal or modification, unless the Superior Court 391
stayed the order before the transfer. 392
Sec. 18. Executory contract. 393
(a) For the purposes of this section, the term “timeshare interest” means an interest 394
having a duration of more than 3 years which grants its holder the right to use and occupy an 395
accommodation, facility, or recreational site, whether improved or not, for a specific period less 396
than a full year during any given year. 397
(b) Except as otherwise provided in subsection (h) of this section, with the Superior 398
Court’s approval, a receiver may adopt or reject an executory contract of the owner relating to 399
receivership property. The Superior Court may condition the receiver’s adoption and continued 400
performance of the contract on terms appropriate under the circumstances. If the receiver does 401
not request Superior Court approval to adopt or reject the contract within a reasonable time after 402
the receiver’s appointment, the receiver is deemed to have rejected the contract. 403 ENGROSSED ORIGINAL
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(c) A receiver’s performance of an executory contract before the Superior Court’s 404
approval under subsection (b) of this section of its adoption or rejection is not an adoption of the 405
contract and does not preclude the receiver from seeking approval to reject the contract. 406
(d) A provision in an executory contract which requires or permits a forfeiture, 407
modification, or termination of the contract because of the appointment of a receiver or the 408
financial condition of the owner does not affect a receiver’s power under subsection (b) of this 409
section to adopt the contract. 410
(e) A receiver’s right to possess or use receivership property pursuant to an executory 411
contract terminates on rejection of the contract under subsection (b) of this section. Rejection is a 412
breach of the contract effective immediately before appointment of the receiver. A claim for 413
damages for rejection of the contract must be submitted by the later of: 414
(1) The time set for submitting a claim in the receivership; or 415
(2) Thirty days after the Superior Court approves the rejection. 416
(f) If at the time a receiver is appointed, the owner has the right to assign an executory 417
contract relating to receivership property under law of the District other than this act, the receiver 418
may assign the contract with the Superior Court’s approval. 419
(g) If a receiver rejects under subsection (b) of this section an executory contract for the 420
sale of receivership property that is real property in possession of the purchaser or a real-property 421
timeshare interest, the purchaser may: 422 ENGROSSED ORIGINAL
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(1) Treat the rejection as a termination of the contract, and in that case the 423
purchaser has a lien on the property for the recovery of any part of the purchase price the 424
purchaser paid; or 425
(2) Retain the purchaser’s right to possession under the contract, and in that case 426
the purchaser shall continue to perform all obligations arising under the contract and may offset 427
any damages caused by nonperformance of an obligation of the owner after the date of the 428
rejection, but the purchaser has no right or claim against other receivership property or the 429
receiver on account of the damages. 430
(h) A receiver may not reject an unexpired lease of real property under which the owner 431
is the landlord if: 432
(1) The tenant occupies the leased premises as the tenant’s primary residence; 433
(2) The receiver was appointed at the request of a person other than a mortgagee; 434
or 435
(3) The receiver was appointed at the request of a mortgagee and: 436
(A) The lease is superior to the lien of the mortgage; 437
(B) The tenant has an enforceable agreement with the mortgagee or the 438
holder of a senior lien under which the tenant’s occupancy will not be disturbed as long as the 439
tenant performs its obligations under the lease; 440
(C) The mortgagee has consented to the lease, either in a signed record or 441
by its failure timely to object that the lease violated the mortgage; or 442 ENGROSSED ORIGINAL
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(D) The terms of the lease were commercially reasonable at the time the 443
lease was agreed to and the tenant did not know or have reason to know that the lease violated 444
the mortgage. 445
Sec. 19. Defenses and immunities of receiver. 446
(a) A receiver is entitled to all defenses and immunities provided by law of the District 447
other than this act for an act or omission within the scope of the receiver’s appointment. 448
(b) A receiver may be sued personally for an act or omission in administering 449
receivership property only with approval of the Superior Court that appointed the receiver. 450
Sec. 20. Interim report of receiver. 451
A receiver may file or, if ordered by the Superior Court , shall file an interim report that 452
includes: 453
(1) The activities of the receiver since appointment or a previous report; 454
(2)Receipts and disbursements, including a payment made or proposed to be made 455
to a professional engaged by the receiver; 456
(3) Receipts and dispositions of receivership property; 457
(4) Fees and expenses of the receiver and, if not filed separately, a request for 458
approval of payment of the fees and expenses; and 459
(5) Any other information required by the Superior Court . 460
Sec. 21. Notice of appointment; claim against receivership; distribution to creditors. 461 ENGROSSED ORIGINAL
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(a) Except as otherwise provided in subsection (f) of this section, a receiver shall give 462
notice of appointment of the receiver to creditors of the owner by: 463
(1) Deposit for delivery through first-class mail or other commercially reasonable 464
delivery method to the last-known address of each creditor; and 465
(2) Publication as directed by the Superior Court. 466
(b) Except as otherwise provided in subsection (f) of this section, the notice required by 467
subsection (a) of this section must specify the date by which each creditor holding a claim 468
against the owner which arose before appointment of the receiver must submit the claim to the 469
receiver. The date specified must be at least 90 days after the later of notice under subsection 470
(a)(1) of this section or last publication under subsection (a)(2) of this section. The Superior 471
Court may extend the period for submitting the claim. Unless the Superior Court orders 472
otherwise, a claim that is not submitted timely is not entitled to a distribution from the 473
receivership. 474
(c) A claim submitted by a creditor under this section must: 475
(1) State the name and address of the creditor; 476
(2) State the amount and basis of the claim; 477
(3) Identify any property securing the claim; 478
(4) Be signed by the creditor under penalty of perjury; and 479
(5) Include a copy of any record on which the claim is based. 480 ENGROSSED ORIGINAL
26
(d) An assignment by a creditor of a claim against the owner is effective against the 481
receiver only if the assignee gives timely notice of the assignment to the receiver in a signed 482
record. 483
(e) At any time before entry of an order approving a receiver’s final report, the receiver 484
may file with the Superior Court an objection to a claim of a creditor, stating the basis for the 485
objection. The Superior Court shall allow or disallow the claim according to law of the District 486
other than this act. 487
(f) If the Superior Court concludes that receivership property is likely to be insufficient to 488
satisfy claims of each creditor holding a perfected lien on the property, the Superior Court may 489
order that: 490
(1) The receiver need not give notice under subsection (a) of this section of the 491
appointment to all creditors of the owner, but only such creditors as the Superior Court directs; 492
and 493
(2) Unsecured creditors need not submit claims under this section. 494
(g) Subject to section 21: 495
(1) A distribution of receivership property to a creditor holding a perfected lien on 496
the property must be made in accordance with the creditor’s priority under law of the District 497
other than this act; and 498 ENGROSSED ORIGINAL
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(2) A distribution of receivership property to a creditor with an allowed unsecured 499
claim must be made as the Superior Court directs according to law of the District other than this 500
act. 501
Sec. 22. Fees and expenses. 502
(a) The Superior Court may award a receiver from receivership property the reasonable 503
and necessary fees and expenses of performing the duties of the receiver and exercising the 504
powers of the receiver. 505
(b) The Superior Court may order one or more of the following to pay the reasonable and 506
necessary fees and expenses of the receivership, including reasonable attorney’s fees and costs: 507
(1) A person that requested the appointment of the receiver, if the receivership 508
does not produce sufficient funds to pay the fees and expenses; or 509
(2) A person whose conduct justified or would have justified the appointment of 510
the receiver under section 6(a)(1). 511
Sec. 23. Removal of receiver; replacement; termination of receivership. 512
(a) The Superior Court may remove a receiver for cause. 513
(b) The Superior Court shall replace a receiver that dies, resigns, or is removed. 514
(c) If the Superior Court finds that a receiver that resigns or is removed, or the 515
representative of a receiver that is deceased, has accounted fully for and turned over to the 516
successor receiver all receivership property and has filed a report of all receipts and 517
disbursements during the service of the replaced receiver, the replaced receiver is discharged. 518 ENGROSSED ORIGINAL
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(d) The Superior Court may discharge a receiver and terminate the Superior Court’s 519
administration of the receivership property if the Superior Court finds that appointment of the 520
receiver was improvident or that the circumstances no longer warrant continuation of the 521
receivership. If the Superior Court finds that the appointment was sought wrongfully or in bad 522
faith, the Superior Court may assess against the person that sought the appointment: 523
(1) The fees and expenses of the receivership, including reasonable attorney’s fees 524
and costs; and 525
(2) Actual damages caused by the appointment, including reasonable attorney’s 526
fees and costs. 527
Sec. 24. Final report of receiver; discharge. 528
(a) On completion of a receiver’s duties, the receiver shall file a final report including: 529
(1) A description of the activities of the receiver in the conduct of the 530
receivership; 531
(2) A list of receivership property at the commencement of the receivership and 532
any receivership property received during the receivership; 533
(3) A list of disbursements, including payments to professionals engaged by the 534
receiver; 535
(4) A list of dispositions of receivership property; 536
(5) A list of distributions made or proposed to be made from the receivership for 537
creditor claims; 538 ENGROSSED ORIGINAL
29
(6) If not filed separately, a request for approval of the payment of fees and 539
expenses of the receiver; and 540
(7) Any other information required by the Superior Court . 541
(b) If the Superior Court approves a final report filed under subsection (a) of this section 542
and the receiver distributes all receivership property, the receiver is discharged. 543
Sec. 25. Receivership in another state; ancillary proceeding. 544
(a) The Superior Court may appoint a receiver appointed in another state, or that person’s 545
nominee, as an ancillary receiver with respect to property located in the District or subject to the 546
jurisdiction of the Superior Court for which a receiver could be appointed under this act, if: 547
(1) The person or nominee would be eligible to serve as receiver under section 7; 548
and 549
(2) The appointment furthers the person’s possession, custody, control, or 550
disposition of property subject to the receivership in the other state. 551
(b) The Superior Court may issue an order that gives effect to an order entered in another 552
state appointing or directing a receiver. 553
(c) Unless the Superior Court orders otherwise, an ancillary receiver appointed under 554
subsection (a) of this section has the rights, powers, and duties of a receiver appointed under this 555
act. 556
Sec. 26. Effect of enforcement by mortgagee. 557 ENGROSSED ORIGINAL
30
(a) A request by a mortgagee for appointment of a receiver, the appointment of a 558
receiver, or application by a mortgagee of receivership property or proceeds to the secured 559
obligation does not: 560
(1) Make the mortgagee a mortgagee in possession of the real property; 561
(2) Make the mortgagee an agent of the owner; 562
(3) Constitute an election of remedies that precludes a later action to enforce the 563
secured obligation; 564
(4) Make the secured obligation unenforceable; 565
(5) Limit any right available to the mortgagee with respect to the secured 566
obligation; or 567
(6) Except as otherwise provided in subsection (b) of this section, bar a deficiency 568
judgment pursuant to law of the District other than this act governing or relating to a deficiency 569
judgment. 570
(b) If a receiver sells receivership property that pursuant to section 16(c) is free and clear 571
of a lien, the ability of a creditor to enforce an obligation that had been secured by the lien is 572
subject to law of the District other than this act relating to a deficiency judgment. 573
Sec. 27. Uniformity of application and construction. 574
In applying and construing this act, consideration must be given to the need to promote 575
uniformity of the law with respect to its subject matter among states that enact it. 576
Sec. 28. Relation to Electronic Signatures in Global and National Commerce Act. 577 ENGROSSED ORIGINAL
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This act modifies, limits, or supersedes the Electronic Signatures in Global and National 578
Commerce Act, approved June 30, 2000 (114 Stat. 464; 15 U.S.C. § 7001 et seq. ), but does not 579
modify, limit, or supersede section 101(c) of that act (15 U.S.C. § 7001(c)), or authorize 580
electronic delivery of any of the notices described in section 103(b) of that act (15 U.S.C. § 581
7003(b)). 582
Sec. 29. Transition. 583
This act does not apply to a receivership for which the receiver was appointed before the 584
effective date of this act. 585
Sec. 30. Fiscal impact statement. 586
The Council adopts the fiscal impact statement in the committee report as the fiscal 587
impact statement required by section 4a of the General Legislative Procedures Act of 1975, 588
approved October 16, 2006 (120 Stat. 2038; D.C. Official Code § 1-301.47a). 589
Sec. 31. Effective date. 590
This act shall take effect following approval by the Mayor (or in the event of veto by the 591
Mayor, action by the Council to override the veto), a 30-day period of congressional review as 592
provided in section 602(c)(1) of the District of Columbia Home Rule Act, approved December 593
24, 1973 (87 Stat. 813; D.C. Official Code § 1-206.02(c)(1)). 594