Under what conditions can a receivership be initiated?

A receivership can be initiated when the mortgagor is in default on their mortgage obligations. This legal remedy is often employed to protect the interests of lenders when a borrower fails to meet the terms of the mortgage, such as making regular payments. The primary purpose of appointing a receiver is to manage the property, maintain its condition, and ensure that any income generated from the property is used to pay off debts, including the mortgage.

In situations where the mortgagor is in default, there can be significant concerns regarding the maintenance and value of the property, which can prompt the lender to seek the appointment of a receiver to safeguard the investment and prevent further deterioration. This means that the lender can take proactive steps to manage the asset effectively during the foreclosure process or until the borrower can rectify the default.

Other conditions, such as the mortgagor having equity in the property, the condition of the property, or the marketability of the title, although potentially relevant to other aspects of property law or foreclosure processes, do not serve as prerequisites for initiating a receivership. The focus primarily remains on the default status of the mortgagor regarding the underlying mortgage agreement.