Blanket Receivership

Introduction to Blanket Receivership

Blanket Receivership was first introduced to Florida in May 2009 as a legal method for Associations (Condominiums, Cooperatives and Homeowner’s Associations) to pursue rental income from both leased and vacant units that are delinquent in paying monthly Association dues.  The tenants of such units are required by Court Order to pay their rent directly to a Court Appointed Blanket Receiver.  The Blanket Receiver accounts for each unit’s delinquent balance, including late fees, interest, legal fees, and receivership costs, and makes monthly disbursements of the net collected rents to the Association.

Recent Blanket Receivership Court Orders have expanded the role of the Blanket Receiver by permitting him to take possession of delinquent units, complete renovations and lease them out.  As the Blanket Receiver, JKM will fund these renovations on the front end at no out of pocket cost to the Association.  JKM believes that the key to a successful Blanket Receivership program and therefore a financially healthy Association is the generation of income through the expedient lease up of all abandoned units.

JKM has worked with several attorneys to develop detailed Blanket Receivership Court Orders that specify the duties of the Blanket Receiver and clarify his authority.  Unit occupants who ignore and/or refuse to cooperate with the Blanket Receiver can be served to appear in Court.  In addition, the Blanket Receiver can obtain Writs of Possession from the Court for non-compliant occupants and/or complete evictions.

The Blanket Receiver is responsible for meticulous record keeping and is typically required to submit quarterly reports to the Court for review.  In addition, JKM believes in full transparency and takes these reporting requirements a step further by hiring a third-party accounting firm to complete a yearly audit for each Blanket Receivership property.

 

Blanket Receivership Approval Process

As a Blanket Receiver, JKM provides assistance to those parties who are directly responsible for the financial health of an Association, including the Board of Directors, Management Company and Association Counsel.  It is important to note that a Blanket Receiver does not function as a Receiver over the operations of the Association.  In addition, a Blanket Receiver is typically not an attorney.  To the contrary, JKM works in conjunction with the Board of Directors, Management Company and Association Counsel in order to generate income to compensate all parties with outstanding balances.

In order to initiate the appointment of a Blanket Receiver, the Association must first file a petition with the Circuit Court that requests such an appointment.  The Court then schedules a hearing date for the petition approximately 3 to 6 weeks after the date of the initial filing.  At the hearing, the presiding Judge will review the Blanket Receivership Court Order that is drafted by Association Counsel and hear evidence that substantiates the financial difficulties facing the Association.  The Judge may ask questions about the Order, suggest modifications to the language of the Order or simply approve it.  Once the Order is approved by the Judge and is certified by the Court, it becomes effective immediately.

Once an Order is in effect, JKM will proceed with administration of the Order in accordance with our proprietary Blanket Receivership Policies and Procedures Manual.  JKM has developed this procedures manual in order to assure consistency and fairness of administration to all receivership units.  This manual includes step-by-step procedures and standard forms for the notification of unit occupants and owners; record keeping; unit-specific accounting policies and procedures; Court reports; renovation and lease-up of units; and evictions.

 

Benefits of Blanket Receivership

Blanket Receivership offers those responsible for the financial health of an Association a means for significantly increasing monthly cash flow in the short term and reducing unresolved debt over the long term.  The most significant benefits of this program include the following:

 

Promenade Shores

Promenade Shores at Doral is a 240-unit condominium community located in Doral, Florida which entered Blanket Receivership with JKM in February 2010.  Of the 240 units, approximately 1/3 were 60 or more days past due in paying their monthly assessments.  The total estimated delinquency for the community as a whole stood at approximately $250,000.00.

Since February 2010, JKM pursued the collection of rents from leased units and initiated a renovation and lease-up program for abandoned units.  As of July 2013, approximately 30 units have been renovated and leased out by JKM.  JKM has remitted in excess of $555,000.00 to the Association for delinquent accounts.  JKM’s monthly distributions to the Association now account for between 25%-35% of total monthly collections.

With JKM’s distributions, the Association has had the funding available to re-build reserves and complete numerous capital improvement projects including repaving, landscaping, and signage repair.

 

Cedar Woods Homes

Cedar Woods Homes is a 165-unit condominium community located in Homestead, Florida which entered Blanket Receivership with JKM in November 2010.  Of the 165 units, approximately 70% were 60 or more days past due in making monthly Association payments.  The total estimated delinquency for the community as a whole stood at approximately $500,000.00.

Since November 2010, JKM has pursued the collection of rents from leased units and initiated a renovation and lease-up program for abandoned units.  As of July 2013, approximately 40 units have been renovated and leased out.  JKM has remitted in excess of $400,000.00 to the Association for delinquent accounts.  JKM’s monthly distributions currently account for 40% of total monthly collections with some months remitting up to 99% of monthly collections.

With JKM’s distributions, the Association has caught up on past-due bills, re-instated flood insurance coverages and completed deferred maintenance on landscaping, a fountain, security gates, and the clubhouse/pool area.