CHAPTER 2
HOUSING MAINTENANCE CODE
[table of contents]

SUBCHAPTER 5
LEGAL REMEDIES AND ENFORCEMENT

ARTICLE 6
Receivership

Section
27-2130 Grounds for Appointment of Receiver
27-2131 Notice to Owner, Mortgagees and Lienors
27-2132 Order to Show Cause
27-2133 Temporary Appointment of Receiver
27-2134 Proceedings on Return of Order to Show Cause
27-2135 Powers and Duties of Receiver
27-2136 Discharge of Receiver
27-2137 Recovery of Expenses of Receivership; Lien of Receiver
27-2138 Obligations of Owner Not Affected

Sec. 27-2130 Grounds for appointment of receiver

Whenever the department certifies that any condition in violation of this chapter or other applicable law in any multiple dwelling or any part of its premises constitutes a serious fire hazard or is a serious threat to life, health or safety, it may, upon failure of the owner to comply with an order to correct such conditions issued pursuant to section 27-2125 of article five of this subchapter, apply for the appointment of a receiver to repair and correct the violations.

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Sec. 27-2131 Notice to owner, mortgagees and lienors

1. If the department intends to seek the appointment of a receiver to remove or remedy a condition described in the preceding section, it shall serve upon the owner, along with the order pursuant to section 27-2125 of article five of this subchapter, a notice stating that in the event the violations covered by the order are not removed or remedied in the manner and within the time specified therein, the department may apply for the appointment of a receiver of the rents, issues and profits of the property with rights superior to those of the owner and any mortgagee or lienor.
   
   
2. Within five days after service of the order and notice upon the owner, the department shall serve a copy of the order and notice upon every mortgagee and lienor of record, personally or by registered or certified mail, at the address set forth in the recorded mortgage or lien. If no address appears therein, a copy shall be sent by registered mail to the person at whose request the instrument was recorded.
   
   
3. The department shall file a copy of the notice and order in the office of the county clerk in which mechanics liens affecting the property would be filed.

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Sec. 27-2132 Order to show cause

1. The department, upon failure of the owner to comply with an order 27-2131 of this article within the time provided therein, may thereafter apply to a court of competent jurisdiction in the county where the property is situated for an order directing the owner and any mortgagees or lienors of record to show cause why the commissioner of housing preservation and development should not be appointed receiver of the rents, issues and profits of the property and why the receiver should not remove or remedy such condition and obtain a lien in favor of the department of housing preservation and development against the property having the priority provided in article eight of this subchapter to secure repayment of the costs incurred by the receiver in removing such conditions. Such application shall contain (a) proof by affidavit that an order of the department has been issued, served on the owner, mortgagees and lienors, and filed, in accordance with section 27-2131 of this article; (b) a statement that a serious fire hazard or a serious threat to life, health, or safety continued to exist in said dwelling after the time fixed in the department order for correction of the condition, and a description of the dwelling and conditions involved; (c) a brief description of the nature of the work required to remove or remedy the condition and an estimate as to the cost thereof.
   
   
2. The order to show cause shall be returnable not less than five days after service is completed.
   
   
3. A copy of the order to show cause, and the papers on which it is based, shall be served on the owner, mortgagees of record, and lienors. If any such persons cannot with due diligence be served personally within the city within the time fixed in the order, then service may be made by posting a copy of the order in a conspicuous place on the premises, and by sending a copy thereof by registered mail to the owner at the last address, if any, registered by such owner with the department, or to his or her last address, if any, known to the department, or, in the case of a mortgagee or lienor, to the address set forth in the recorded mortgage or lien, and by publication in a newspaper of general circulation in the county where such premises are located. Service shall be deemed complete on filing proof thereof in the office of the clerk of the court in which application for such order is made.

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Sec. 27-2133 Temporary appointment of receiver

1. If the condition of the premises is such that unless immediately cured irreparable damage may be caused to the building or it constitutes an imminent danger to its occupants or the occupants of adjoining properties, then the order to show cause may be returnable in the discretion of the court in less than five days, and in such case, service may be made by posting a copy of the order in a conspicuous place on the premises and by mailing a copy to the owner at the address registered with the department and to the mortgagees and lienors at their respective addresses. But any appointment of a receiver without service pursuant to subdivision c of section 27-2132 of this article shall be temporary only and expire not more than thirty days thereafter unless, prior to the expiration of the thirty days, the department shall serve notice on the owner, mortgagee and lienors in the manner provided for in subdivision c of section 27-2132 of this article of intention to apply to the court at a date fixed in such notice and not less than five days after the service of such notice, for an extension of the receivership. Upon such service the period of the appointment of the temporary receiver shall be automatically extended for a further period of fifteen days. The notice shall also contain, in addition to the order to show cause and the papers on which it is based, a statement of any expenditures made or obligations incurred by the receiver during the period of his or her temporary appointment. On the date fixed in the notice, the court shall determine whether or not to extend the period of receivership. Such determination shall be made as if the application were an original one for the appointment of a receiver.
   
   
2. A temporary receiver shall have the powers and duties provided in section 27-2135 of this article, except that he or she shall not, without express order of the court, make any repairs or improvements to the property or incur any expenses in the operation thereof during the period of his or her temporary appointment except such as may be necessary (1) to remedy or remove the immediate condition or conditions which called for his or her appointment, and (2) to the ordinary operation and maintenance of the property. For such specific purpose the receiver shall be entitled to let such contracts and undertake such expenses as may be necesssary to accomplish the specific results without advertisements and without procuring competitive bids.

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Sec. 27-2134 Proceedings on return of order to show cause

1. On the return of the order to show cause, determination thereof shall have precedence over every other business of the court unless the court shall find that some other pending proceeding, having a similar statutory preference, has priority.
   
   
2. If the court finds that the facts stated in the application warrant the granting thereof, then it shall appoint the commissioner of housing preservation and development receiver of the rents, issues and profits of the property.
   
   
3. Notwithstanding subdivision b of this section, if, after determination of the issue, the owner, or any mortgagee or lienor or other person having an interest in the property, shall apply to the court to be permitted to remove or remedy the conditions set forth in the department's application and shall (1) demonstrate the ability promptly to undertake the work required; and (2) post security for the performance thereof within the time, and in the amount and manner, deemed necessary by the court, then the court may in lieu of appointing a receiver issue an order permitting such person to perform the work within a time fixed by the court. If at the time fixed in the order the work has not been satisfactorily done, the court shall appoint such receiver. If after the granting of an order permitting a person to perform the work but before the time fixed by the court for the completion thereof it shall appear to the department that the person permitted to do the same is not proceeding with due diligence, then the department may apply to the court, on notice to those persons who have appeared in the proceeding, for a hearing to determine whether a receiver shall be appointed immediately. On the failure of any person to complete the work in accordance with the provisions of an order under this subdivision, the department, or any receiver thereafter appointed shall be reimbursed for costs incurred by him or her in removing or remedying the condition and other charges herein provided for out of the security posted by such person.

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Sec. 27-2135 Powers and duties of receiver

1. A receiver appointed pursuant to this article shall have all of the powers and duties of a receiver appointed in an action to foreclose a mortgage on real property, together with such additional powers and duties as herein granted and imposed. Such receiver shall not be required to file any bond.
   
   
2. The receiver shall with all reasonable speed remove violations in the dwelling and its premises, including those constituting a fire hazard or a threat to life, health or safety. He or she may also, in addition to ordinary repairs, maintenance and replacement, make other improvements to effect a rehabilitation of the property, in such fashion as is consistent with maintaining safe and habitable conditions over the remaining useful life of the dwelling. He or she shall have the power to let contracts or incur expenses therefor in accordance with the provisions of law applicable to contracts for public works except that advertisement shall not be required for each such contract. Notwithstanding any provision of law, the receiver may let contracts or incur expenses for individual items of repairs, improvements or supplies without the procurement of competitive bids where the total amount of any such individual item does not exceed twenty-five hundred dollars.
   
   
3. The receiver shall collect the accrued and accruing rents, issues and profits of the dwelling and apply the same to the cost of the repairs and improvements authorized in subdivision (b) of this section, to the payment of expenses reasonably necessary to the proper operation and management of the property, including insurance and the fees of the managing agent, and the necessary expenses of his or her office as receiver, the repayment of all moneys advanced to the receiver by the department of housing preservation and development to cover the costs incurred by the receiver and interest thereon; and then, if there be a surplus, to unpaid taxes, assessments, water rents, sewer rents and penalties and interest thereon, and then to sums due to mortgagees or lienors. If the income of the property shall be insufficient to cover the cost of the repairs and improvements or the expenses reasonably necessary to the proper operation and management of the property and other necessary expenses of the receiver, the department of housing preservation and development shall advance to the receiver any sums required to cover such cost and expense and thereupon shall have a lien against the property having the priority provided in article eight of this subchapter for any such sums so advanced with interest thereon.
   
   
4. The receiver shall be entitled to the same fees, commissions and necessary expenses as receivers in actions to foreclose mortgages. Such fees and commissions shall be paid into the fund created pursuant to section 27-2111 of article one of this subchapter. The receiver shall be liable only in his or her official capacity for injury to person and property by reason of conditions of the premises in a case where an owner would have been liable; such receiver shall not have any liability in his or her personal capacity. The personnel and facilities of the department of housing preservation and development and the corporation counsel shall be availed of by the receiver for the purpose of carrying out his or her duties as receiver, and the costs of such services shall be deemed a necessary expense of the receiver.

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Sec. 27-2136 Discharge of receiver

The receiver shall be discharged upon rendering a full and complete accounting to the court when the repairs and improvements herein authorized are completed and the cost thereof and all other costs authorized herein have been paid or reimbursed from the rents and income of the dwelling and the surplus money, if any, has been paid over to the owner or the mortgagee or lienor as the court may direct. However, at any time, the receiver may be discharged upon filing his or her account as receiver without affecting the right of the department of housing preservation and development to its lien. Upon the completion of the repairs and improvements, the owner, the mortgagee or any lienor may apply for the discharge of the receiver upon payment to the receiver of all moneys expended by him or her therefor and all other costs authorized by section 27-2135 of this article which have not been paid or reimbursed from the rents and income of the dwelling.

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Sec. 27-2137 Recovery of expenses of receivership; lien of receiver

1. The expenditures made by the receiver pursuant to section 27-2135 of this article shall, to the extent that they are not recovered from the rents and income of the property collected by the receiver, constitute a debt of the owner and a lien upon the building and lot, and upon the rents and income thereof. Except as otherwise provided in this section, the provisions of article eight of this subchapter shall govern the effect and enforcement of such debt and lien; references therein to the department shall, for purposes of this article be deemed to refer to the receiver and, after such receiver's discharge, the department of housing preservation and development.
   
   
2. Failure to serve a copy of the order and notice required in the manner specified by section 27-2131 of this article, or failure to serve any mortgagee or lienor with a copy of the order to show cause as required by subdivision c of section 27-2132 of this article, shall not affect the validity of the proceeding or the appointment of a receiver, but the rights of the department of housing preservation and development or of the receiver shall not in such event be superior to the rights of any mortgagee or lienor who has not been served as provided therein.
   
   
3. Any mortgagee or lienor who at his or her expense remedies or removes the conditions to the satisfaction of the court pursuant to the provisions of subdivision c of section 27-2134 of this article shall have and be entitled to enforce a lien equivalent to the lien granted to the receiver in favor of the department of housing preservation and development hereunder. Any mortgagee or lienor who, following the appointment of a receiver by the court, shall reimburse the receiver and the department of housing preservation and development for all costs and charges as hereinabove provided shall be entitled to an assignment of the lien granted to the receiver in favor of the department of housing preservation and development.

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Sec. 27-2138 Obligations of owner not affected

Nothing herein contained shall be deemed to relieve the owner of any civil or criminal liability incurred or any duty imposed by law by reason of acts or omissions of the owner prior to the appointment of a receiver, nor shall anything contained herein be construed to suspend during the receivership any obligation of the owner for the payment of taxes or other operating and maintenance expenses of the dwelling nor of the owner or any other person for the payment of mortgages or liens.

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