From Ad Hoc Tools to Procedural Rules
The Nevada legislature recently made Nevada the third state to adopt the Uniform Commercial Real Estate Receivership Act (the “Act” or “UCRERA”).Time will tell whether a comprehensive statutory scheme for receivership will change prior practice under what was an ad hoc, case-by-case development of commercial real estate receivership practices in Nevada.
Historically, receivership has been an equitable tool of Nevada courts for decades. Before UCRERA, receivership was a remedy with limited authoritative procedural guidance – with few statutes and hardly any rules. Receivership is barely mentioned in the Nevada Rules of Civil Procedure. Receivership was provided by statute, such as Nevada Revised Statutes (NRS) Chapter 32. The statutes generally described circumstances for appointment of receivers such as avoiding fraudulent transfers, in aid of foreclosure (NRS 107.100), to enforce an assignment of rents (NRS 107A.26) and enforcement of judgments. Corporate law has a receivership remedy for insolvent and dissolving corporations.
Although a regularly used tool, the absence of procedural rules, and the lack of authority for use of remedies such as a receivership sale, created uncertainty, delay and expense. The arbiter of what was possible in a case was each judge, informed at times by the parties in court filings and argument at hearings. The ultimate arbiter of the receiver’s power to sell real estate was the underwriter for title insurance.
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