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Receivership

Understand receivership in Canadian real estate: when it’s used, how it works, and what it means for borrowers, lenders, and distressed assets.

Receivership

June 16, 2025


What is Receivership?

Receivership is a legal process where a court or secured creditor appoints a receiver to take control of a borrower’s assets, such as property or businesses, when the borrower defaults on their obligations.

Why Receivership Matters in Real Estate

In Canadian real estate and finance, receivership is commonly used when lenders seek to recover debt by managing or selling assets, especially during insolvency or foreclosure scenarios.



A receiver may:
  • Operate, lease, or sell the property
  • Collect rental income and pay operating expenses
  • Protect asset value while enforcing creditor rights
  • Report to the court or creditor on asset disposition



Receivers are usually court-appointed professionals (often accountants or legal trustees).



Understanding receivership helps investors and creditors navigate distressed property scenarios and asset recovery.

Example of Receivership in Action

After the borrower defaulted on their commercial mortgage, the lender obtained a court order to place the property into receivership for sale.

Key Takeaways

  • Occurs when an asset is controlled by a receiver
  • Used to recover debt during default or insolvency
  • May involve court oversight
  • Receiver manages or sells the property
  • Protects lender interests and asset value

Related Terms

Additional Terms

Budgeting

Budgeting in real estate refers to the process of forecasting and managing income and expenses associated with owning, operating, or developing a property.. more

Tenant Improvements

Tenant improvements refer to custom modifications or build-outs made to a leased space to suit the tenant’s operational needs, often negotiated as. more

Highest and Best Use

Highest and best use refers to the reasonably probable use of a property that results in the highest value, provided it is legally permissible,. more

Gross Lease

A gross lease is a commercial lease where the tenant pays a fixed rent, and the landlord covers most or all operating expenses such as property. more

Brownfield

A brownfield is a property that was previously used for industrial or commercial purposes and is now vacant or underused, often requiring. more

Record of Site Condition (RSC)

A Record of Site Condition (RSC) is a formal document filed with a provincial environmental authority certifying that a property meets required. more

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