Florida Senate - 2020 CS for SB 660 By the Committee on Commerce and Tourism; and Senator Berman 577-03081-20 2020660c1 1 A bill to be entitled 2 An act relating to the Uniform Commercial Real Estate 3 Receivership Act; creating chapter 714, F.S., relating 4 to the Uniform Commercial Real Estate Receivership 5 Act; providing a short title; defining terms; 6 prohibiting a court from issuing certain orders unless 7 certain requirements are met; providing requirements 8 for certain court orders; providing construction and 9 applicability; specifying that a court has exclusive 10 jurisdiction to direct receivers and determine 11 controversies under certain circumstances; providing 12 requirements and authorizations relating to the 13 appointment of a receiver; authorizing certain parties 14 to move to dissolve or modify certain orders; 15 requiring that such motions be heard within a 16 specified timeframe; specifying when a person is or is 17 not disqualified from appointment as a receiver; 18 authorizing certain persons to nominate someone to 19 serve as a receiver; specifying that the court is not 20 bound by such nomination; requiring a receiver to post 21 a bond with the court which meets certain 22 requirements; providing an exception; prohibiting a 23 claim against a receiver’s bond or alternative 24 security from being made after a certain time; 25 providing that an appointed receiver has certain 26 statuses of a lien creditor; providing that certain 27 property is subject to specified security agreements; 28 providing requirements relating to the collection and 29 turnover of receivership property; providing for 30 powers and duties of a receiver; authorizing the court 31 to expand, modify, or limit such powers and duties; 32 providing for duties of an owner; authorizing a court 33 to take certain actions if a person knowingly fails to 34 perform a duty; authorizing a court to take certain 35 actions relating to stays and injunctions; authorizing 36 certain persons to apply for relief from a stay or 37 injunction; requiring that certain motions be heard 38 within a specified timeframe; specifying when an order 39 does not operate as a stay or injunction; authorizing 40 receivers to engage and compensate certain 41 professionals under certain circumstances; requiring 42 certain persons to file an itemized statement with the 43 court; requiring a receiver to pay an amount approved 44 by the court; defining the term “good faith”; 45 authorizing a receiver to use or transfer receivership 46 property other than in the ordinary course of business 47 under certain circumstances; providing for the service 48 of notice to lienholders who are not parties to the 49 action; defining the term “timeshare interest”; 50 authorizing a receiver to adopt or reject an executory 51 contract of the owner relating to receivership 52 property under certain circumstances; requiring that a 53 claim of damages for rejection of a contract be 54 submitted within a specified timeframe; authorizing a 55 purchaser to take certain actions if a receiver 56 rejects an executory contract under certain 57 circumstances; prohibiting a receiver from rejecting 58 unexpired leases of certain property under certain 59 circumstances; providing for defenses and immunities 60 of a receiver; providing requirements for interim 61 reports filed by a receiver; providing requirements 62 relating to notices of appointment; authorizing the 63 court to enter certain orders if the court concludes 64 that receivership property is likely to be 65 insufficient to satisfy certain claims; providing 66 requirements for certain distributions of receivership 67 property; authorizing a court to award fees and 68 expenses; authorizing a court to order certain persons 69 to pay fees and expenses; providing for the removal 70 and replacement of a receiver and the termination of a 71 court’s administration of the receivership property 72 under certain circumstances; requiring a receiver to 73 file a final report containing certain information 74 upon completion of the receiver’s duties; specifying 75 that a receiver is discharged if certain requirements 76 are met; authorizing a court to appoint ancillary 77 receivers under certain circumstances; providing for 78 rights, powers, and duties of an ancillary receiver; 79 specifying that certain requests, appointments, and 80 applications by a mortgagee do not have certain 81 effects; providing construction and applicability; 82 providing an effective date. 83 84 Be It Enacted by the Legislature of the State of Florida: 85 86 Section 1. Chapter 714, Florida Statutes, consisting of 87 sections 714.01-714.28, is created to read: 88 CHAPTER 714 89 UNIFORM COMMERCIAL REAL ESTATE RECEIVERSHIP ACT 90 714.01 Short title.—This chapter may be cited as the 91 Uniform Commercial Real Estate Receivership Act. 92 714.02 Definitions.—For the purposes of this chapter, the 93 term: 94 (1)“Affiliate” means: 95 (a) With respect to an individual: 96 1. A companion of the individual; 97 2. A lineal ancestor or descendent, whether by blood or 98 adoption, of: 99 a. The individual; or 100 b. A companion of the individual; 101 3. A companion of an ancestor or descendent as described in 102 subparagraph 2.; 103 4. A sibling, aunt, uncle, great aunt, great uncle, first 104 cousin, niece, nephew, grandniece, or grandnephew of the 105 individual, whether related by the whole or the half blood or 106 adoption, or a companion of any of them; or 107 5. Any other person occupying the residence of the 108 individual; and 109 (b) With respect to a person other than an individual: 110 1. Another person who directly or indirectly controls, is 111 controlled by, or is under common control with the person; 112 2. An officer, director, manager, member, partner, 113 employee, or trustee or other fiduciary of the person; or 114 3. A companion of an individual or an individual occupying 115 the residence of an individual. 116 (2) “Companion” means: 117 (a) The spouse of an individual; 118 (b) The registered domestic partner of an individual; or 119 (c) Another individual in a civil union with an individual. 120 (3) “Court” means the court of general equity jurisdiction 121 in this state. 122 (4) “Executory contract” means a contract, including a 123 lease, under which each party has an unperformed obligation and 124 the failure of a party to complete performance would constitute 125 a material breach. 126 (5) “Governmental unit” means an office, department, 127 division, bureau, board, commission, or other agency of this 128 state or a subdivision of this state. 129 (6) “Lien” means an interest in property which secures 130 payment or performance of an obligation. 131 (7) “Mortgage” means a record, however denominated, that 132 creates or provides for a consensual lien on real property or 133 rents, even if the record also creates or provides for a lien on 134 personal property. 135 (8) “Mortgagee” means a person entitled to enforce an 136 obligation secured by a mortgage. 137 (9) “Mortgagor” means a person who grants a mortgage or a 138 successor in ownership of the real property described in the 139 mortgage. 140 (10) “Owner” means the person for whose property a receiver 141 is appointed. 142 (11) “Person” means an individual, estate, business or 143 nonprofit entity, public corporation, government or governmental 144 subdivision, agency, or instrumentality or other legal entity. 145 (12) “Proceeds” means any of the following property: 146 (a) Whatever is acquired on the sale, lease, license, 147 exchange, or other disposition of receivership property. 148 (b) Whatever is collected on, or distributed on account of, 149 receivership property. 150 (c) Rights arising out of receivership property. 151 (d) To the extent of the value of receivership property, 152 claims arising out of the loss, nonconformity, or interference 153 with the use of, defects or infringement of rights in, or damage 154 to the property. 155 (e) To the extent of the value of receivership property and 156 to the extent payable to the owner or mortgagee, insurance 157 payable by reason of the loss or nonconformity of, defects or 158 infringement of rights in, or damage to the property. 159 (13) “Property” means all of a person’s right, title, and 160 interest, both legal and equitable, in real and personal 161 property, tangible and intangible, wherever located and however 162 acquired. The term includes proceeds, products, offspring, 163 rents, or profits of or from the property. 164 (14) “Receiver” means a person appointed by the court as 165 the court’s agent, and subject to the court’s direction, to take 166 possession of, manage, and, if authorized by this chapter or 167 court order, transfer, sell, lease, license, exchange, collect, 168 or otherwise dispose of receivership property. 169 (15) “Receivership” means a proceeding in which a receiver 170 is appointed. 171 (16) “Receivership property” means the property of an owner 172 which is described in the order appointing a receiver or a 173 subsequent order. The term includes any proceeds, products, 174 offspring, rents, or profits of or from the property. 175 (17) “Record,” if used as a noun, means information that is 176 inscribed on a tangible medium or that is stored on an 177 electronic or other medium and is retrievable in perceivable 178 form. 179 (18) “Rents” means: 180 (a) Sums payable for the right to possess or occupy, or for 181 the actual possession or occupation of, real property of another 182 person; 183 (b) Sums payable to a mortgagor under a policy of rental 184 interruption insurance covering real property; 185 (c) Claims arising out of a default in the payment of sums 186 payable for the right to possess or occupy real property of 187 another person; 188 (d) Sums payable to terminate an agreement to possess or 189 occupy real property of another person; 190 (e) Sums payable to a mortgagor for payment or 191 reimbursement of expenses incurred in owning, operating, and 192 maintaining real property or constructing or installing 193 improvements on real property; or 194 (f) Other sums payable under an agreement relating to the 195 real property of another person which constitute rents under the 196 laws of this state other than this act. 197 (19) “Secured obligation” means an obligation the payment 198 or performance of which is secured by a security agreement. 199 (20) “Security agreement” means an agreement that creates 200 or provides for a lien. 201 (21) “Sign” means, with present intent to authenticate or 202 adopt a record: 203 (a) To execute or adopt a tangible symbol; or 204 (b) To attach to or logically associate with the record an 205 electronic sound, symbol, or process. 206 (22) “State” means a state of the United States, the 207 District of Columbia, Puerto Rico, the United States Virgin 208 Islands, or any territory or insular possession subject to the 209 jurisdiction of the United States. 210 714.03 Notice and opportunity for hearing.— 211 (1) Except as otherwise provided in subsection (2), the 212 court may issue an order under this chapter only after notice 213 and opportunity for a hearing appropriate under the 214 circumstances. 215 (2) The court may issue an order under this chapter without 216 written or oral notice to the adverse party only if: 217 (a) It appears from the specific facts shown by affidavit 218 or verified pleading or motion that immediate and irreparable 219 injury, loss, or damage will result to the movant or that waste, 220 dissipation, impairment, or substantial diminution in value will 221 result to the subject real estate before any adverse party can 222 be heard in opposition; and 223 (b) The movant’s attorney certifies in writing all efforts 224 that have been made to give notice to all known adverse parties, 225 or the reasons why such notice should not be required. 226 (3) Only an affidavit, a declaration or a verified 227 pleading, or a motion may be used to support the application for 228 the appointment of a receiver, unless the adverse party appears 229 at the hearing or has received reasonable prior notice of the 230 hearing. Every order appointing a receiver without notice must 231 be endorsed with the date and hour of entry, must be filed 232 forthwith in the clerk’s office, must define the injury, must 233 state findings by the court as to why the injury may be 234 irreparable, and must give the reasons why the order was granted 235 without notice if notice was not given. The order appointing a 236 receiver shall remain in effect until the further order of the 237 court. 238 (4) This chapter does not displace any existing rule of 239 procedural or judicial administration of this state governing 240 service or notice, including, without limitation, Rule 1.070, 241 Florida Rules of Civil Procedure, and Rule 2.525, Florida Rules 242 of Judicial Administration, which shall remain in full force and 243 effect. 244 714.04 Scope; exclusions.— 245 (1) This chapter applies to a receivership initiated in a 246 court of this state for an interest in real property and any 247 incidental personal property related to or used in operating the 248 real property. 249 (2) This chapter does not apply to: 250 (a) Actions in which a state agency or officer is expressly 251 authorized by statute to seek or obtain the appointment of a 252 receiver; 253 (b) Actions authorized by or commenced under federal law; 254 (c) Real property improved by one or two dwelling units 255 which includes the homestead of an individual owner or an 256 affiliate of an individual owner; 257 (d) Property of an individual exempt from forced sale, 258 execution, or seizure under the laws of this state; or 259 (e) Personal property of an individual which is used 260 primarily for personal, family, or household purposes. 261 (3) This chapter does not limit the authority of a court to 262 appoint a receiver under the laws of this state other than this 263 chapter. 264 (4) This chapter does not limit an individual’s homestead 265 rights under the laws of this state or federal law. 266 (5) Unless displaced by a particular provision of this 267 chapter, the principles of law and equity, including the law 268 relative to capacity to contract, principal and agent, estoppel, 269 laches, fraud, misrepresentation, duress, coercion, mistake, 270 bankruptcy, or other validating or invalidating cause, 271 supplement this chapter. 272 714.05 Power of the court.—The court that appoints a 273 receiver under this chapter has exclusive jurisdiction to direct 274 the receiver and determine any controversy related to the 275 receivership or receivership property. 276 714.06 Appointment of receiver.— 277 (1) The court may appoint a receiver: 278 (a) Before judgment, to protect a party that demonstrates 279 an apparent right, title, or interest in real property that is 280 the subject of the action, if the property or its revenue 281 producing potential: 282 1. Is being subjected to or is in danger of waste, loss, 283 substantial diminution in value, dissipation, or impairment; or 284 2. Has been or is about to be the subject of a voidable 285 transaction; 286 (b) After judgment: 287 1. To carry the judgment into effect; or 288 2. To preserve nonexempt real property pending appeal or 289 when an execution has been returned unsatisfied and the owner 290 refuses to apply the property in satisfaction of the judgment; 291 (c) In an action in which a receiver for real property may 292 be appointed on equitable grounds, subject to the requirements 293 of paragraphs (a) and (b); or 294 (d) During the time allowed for redemption, to preserve 295 real property sold in an execution or foreclosure sale and 296 secure its rents to the person entitled to the rents. 297 (2) In connection with the foreclosure or other enforcement 298 of a mortgage, the court shall consider the following facts and 299 circumstances, together with any other relevant facts, in 300 deciding whether to appoint a receiver for the mortgaged 301 property: 302 (a) Appointment is necessary to protect the property from 303 waste, loss, substantial diminution in value, transfer, 304 dissipation, or impairment; 305 (b) The mortgagor agreed in a signed record to the 306 appointment of a receiver on default; 307 (c) The owner agreed, after default and in a signed record, 308 to appointment of a receiver; 309 (d) The property and any other collateral held by the 310 mortgagee are not sufficient to satisfy the secured obligation; 311 (e) The owner fails to turn over to the mortgagee proceeds 312 or rents the mortgagee was entitled to collect; or 313 (f) The holder of a subordinate lien obtains appointment of 314 a receiver for the property. 315 (3) The court may condition the appointment of a receiver 316 without prior notice or hearing under s. 714.03 on the giving of 317 security by the person seeking the appointment for the payment 318 of damages, reasonable attorney fees, and costs incurred or 319 suffered by any person if the court later concludes that the 320 appointment was not justified. If the court later concludes that 321 the appointment was justified and the order of appointment of 322 the receiver becomes final and no longer subject to appeal, the 323 court shall release the bond or other security. When any order 324 appointing a receiver or providing for injunctive relief is 325 issued on the pleading of a municipality or the state, or any 326 officer, agency, or political subdivision thereof, the court may 327 require or dispense with a bond, with or without surety, and 328 conditioned in the same manner, having due regard for public 329 interest. 330 (4) A party adversely affected by an order appointing a 331 receiver may move to dissolve or modify the order at any time. 332 If a party moves to dissolve or modify the order, the motion 333 must be heard within 5 days after the movant applies for a 334 hearing on the motion or at such time as the court determines is 335 reasonable and appropriate under the circumstances after the 336 movant applies for a hearing on the motion. After notice and a 337 hearing, the court may grant relief for cause shown. 338 714.07 Disqualification from appointment as receiver; 339 disclosure of interest.— 340 (1) The court may not appoint a person as receiver unless 341 the person submits to the court a statement under penalty of 342 perjury that the person is not disqualified. 343 (2) Except as otherwise provided in subsection (3), a 344 person is disqualified from appointment as receiver if the 345 person: 346 (a) Is an affiliate of a party; 347 (b) Has an interest materially adverse to an interest of a 348 party; 349 (c) Has a material financial interest in the outcome of the 350 action, other than compensation the court may allow the 351 receiver; 352 (d) Has a debtor-creditor relationship with a party; or 353 (e) Holds an equity interest in a party, other than a 354 noncontrolling interest in a publicly traded company. 355 (3) A person is not disqualified from appointment as 356 receiver solely because the person: 357 (a) Was appointed receiver or is owed compensation in an 358 unrelated matter involving a party or was engaged by a party in 359 a matter unrelated to the receivership; 360 (b) Is an individual obligated to a party on a debt that is 361 not in default and was incurred primarily for personal, family, 362 or household purposes; or 363 (c) Maintains with a party a deposit account, as defined in 364 s. 679.1021. 365 (4) A person seeking appointment of a receiver may nominate 366 a person to serve as receiver, but the court is not bound by the 367 nomination. 368 714.08 Receiver’s bond; alternative security.— 369 (1) Except as otherwise provided in subsection (2), a 370 receiver shall post with the court a bond that: 371 (a) Is conditioned on the faithful discharge of the 372 receiver’s duties; 373 (b) Has one or more sureties approved by the court; 374 (c) Is in an amount the court specifies; and 375 (d) Is effective as of the date of the receiver’s 376 appointment. 377 (2) The court may approve the receiver posting an 378 alternative security with the court, such as a letter of credit 379 or deposit of funds. The receiver may not use receivership 380 property as alternative security. Interest that accrues on 381 deposited funds must be paid to the receiver upon the receiver’s 382 discharge. 383 (3) The court may authorize a receiver to act before the 384 receiver posts the bond or alternative security required by this 385 section if the action is necessary to prevent or mitigate 386 immediate injury, loss, or damage to the party who sought the 387 appointment of the receiver, or immediate waste, dissipation, 388 impairment, or substantial diminution in value to the 389 receivership property. 390 (4) A claim against a receiver’s bond or alternative 391 security must be made not later than 1 year after the date the 392 receiver is discharged. 393 714.09 Status of receiver as lien creditor.—Upon 394 appointment of a receiver, the receiver has the status of a lien 395 creditor under: 396 (1) Chapter 679 as to receivership property or fixtures; 397 and 398 (2) Chapter 695 as to receivership property that is real 399 property. 400 714.10 Security agreement covering after-acquired 401 property.—Except as otherwise provided by law other than this 402 chapter, property that a receiver or an owner acquires after 403 appointment of the receiver is subject to a security agreement 404 entered into before the appointment to the same extent as if the 405 court had not appointed the receiver. 406 714.11 Collection and turnover of receivership property.— 407 (1) Unless the court orders otherwise, on demand by a 408 receiver: 409 (a) A person that owes a debt that is receivership property 410 and is matured or payable on demand or on order shall pay the 411 debt to or on the order of the receiver, except to the extent 412 the debt is subject to setoff or recoupment; and 413 (b) Subject to subsection (3), a person that has 414 possession, custody, or control of receivership property shall 415 turn the property over to the receiver. 416 (2) A person that has notice of the appointment of a 417 receiver and owes a debt that is receivership property may not 418 satisfy the debt by payment to the owner. 419 (3) If a creditor has possession, custody, or control of 420 receivership property and the validity, perfection, or priority 421 of the creditor’s lien on the property depends on the creditor’s 422 possession, custody, or control, the creditor may retain 423 possession, custody, or control until the court orders adequate 424 protection of the creditor’s lien. 425 (4) Unless a bona fide dispute exists about a receiver’s 426 right to possession, custody, or control of receivership 427 property, the court may sanction as civil contempt a person’s 428 failure to turn the property over when required by this section. 429 714.12 Powers and duties of receiver.— 430 (1) Except as limited by court order or the laws of this 431 state other than this chapter, a receiver may: 432 (a) Collect, control, manage, conserve, and protect 433 receivership property; 434 (b) Operate a business constituting receivership property, 435 including preservation, use, sale, lease, license, exchange, 436 collection, or disposition of the property in the ordinary 437 course of business; 438 (c) In the ordinary course of business, incur unsecured 439 debt and pay expenses incidental to the receiver’s preservation, 440 use, sale, lease, license, exchange, collection, or disposition 441 of receivership property; 442 (d) Assert a right, claim, cause of action, or defense of 443 the owner which relates to receivership property; 444 (e) Seek and obtain instruction from the court concerning 445 receivership property, exercise of the receiver’s powers, and 446 performance of the receiver’s duties; 447 (f) Upon subpoena, compel a person to submit to examination 448 under oath, or to produce and permit inspection and copying of 449 designated records or tangible things, with respect to 450 receivership property or any other matter that may affect 451 administration of the receivership; 452 (g) Engage a professional pursuant to s. 714.15; 453 (h) Apply to a court of another state for appointment as 454 ancillary receiver with respect to receivership property located 455 in that state; and 456 (i) Exercise any power conferred by court order, this 457 chapter, or the laws of this state other than this chapter. 458 (2) With court approval, a receiver may: 459 (a) Incur debt for the use or benefit of receivership 460 property other than in the ordinary course of business; 461 (b) Make improvements to receivership property; 462 (c) Use or transfer receivership property other than in the 463 ordinary course of business pursuant to s. 714.16; 464 (d) Adopt or reject an executory contract of the owner 465 pursuant to s. 714.17; 466 (e) Pay compensation to the receiver pursuant to s. 714.21, 467 and to each professional engaged by the receiver under s. 468 714.15; 469 (f) Recommend allowance or disallowance of a claim of a 470 creditor pursuant to s. 714.20; and 471 (g) Make a distribution of receivership property pursuant 472 to s. 714.20. 473 (3) A receiver shall: 474 (a) Prepare and retain appropriate business records, 475 including a record of each receipt, disbursement, and 476 disposition of receivership property; 477 (b) Account for receivership property, including the 478 proceeds of a sale, lease, license, exchange, collection, or 479 other disposition of the property; 480 (c) File with the recording office of the county in which 481 the real property is located a copy of the order appointing the 482 receiver and, if a legal description of the real property is not 483 included in the order, the legal description; 484 (d) Disclose to the court any fact arising during the 485 receivership which would disqualify the receiver under s. 486 714.07; and 487 (e) Perform any duty imposed by court order, this chapter, 488 or the laws of this state other than this chapter. 489 (4) The powers and duties of a receiver may be expanded, 490 modified, or limited by court order. 491 714.13 Duties of owner.— 492 (1) An owner shall: 493 (a) Assist and cooperate with the receiver in the 494 administration of the receivership and the discharge of the 495 receiver’s duties; 496 (b) Preserve and turn over to the receiver all receivership 497 property in the owner’s possession, custody, or control; 498 (c) Identify all records and other information relating to 499 the receivership property, including a password, authorization, 500 or other information needed to obtain or maintain access to or 501 control of the receivership property, and make available to the 502 receiver the records and information in the owner’s possession, 503 custody, or control; 504 (d) Upon subpoena, submit to examination under oath by the 505 receiver concerning the acts, conduct, property, liabilities, 506 and financial condition of the owner or any matter relating to 507 the receivership property or the receivership; and 508 (e) Perform any duty imposed by court order, this chapter, 509 or the laws of this state other than this chapter. 510 (2) If an owner is a person other than an individual, this 511 section applies to each officer, director, manager, member, 512 partner, trustee, or other person exercising or having the power 513 to exercise control over the affairs of the owner. 514 (3) If a person knowingly fails to perform a duty imposed 515 by this section, the court may: 516 (a) Award the receiver actual damages caused by the 517 person’s failure, reasonable attorney fees, and costs; and 518 (b) Sanction the failure as civil contempt. 519 714.14 Stay; injunction.— 520 (1) Except as otherwise provided in subsection (5), after 521 notice and opportunity for a hearing, the court may enter an 522 order providing for a stay, applicable to all persons, of any 523 act, action, or proceeding: 524 (a) To obtain possession of, exercise control over, or 525 enforce a judgment against all or a portion of the receivership 526 property as defined in the order creating the stay; and 527 (b) To enforce a lien against all or a portion of the 528 receivership property to the extent the lien secures a claim 529 against the owner which arose before entry of the order. 530 531 The court shall include in its order a specific description of 532 the receivership property subject to the stay, and shall include 533 the following language in the title of the order: “Order Staying 534 Certain Actions to Enforce Claims against Receivership 535 Property.” 536 (2) Except as otherwise provided in subsection (5), the 537 court may enjoin an act, action, or proceeding against or 538 relating to receivership property if the injunction is necessary 539 to protect against misappropriation of, or waste relating 540 directly to, the receivership property. 541 (3) If the court grants injunctive relief, the injunction 542 must specify the reasons for entry and must describe in 543 reasonable detail the act or acts restrained without reference 544 to a pleading or other document. The injunction is binding on 545 the parties to the action; on the parties’ officers, agents, 546 servants, employees, and attorneys; and on any person who 547 receives actual notice of the injunction and is in active 548 concert or participation with the parties. 549 (4) A person whose act, action, or proceeding is stayed or 550 enjoined under this section, or who is otherwise adversely 551 affected by such stay or injunction, may apply to the court for 552 relief from the stay or injunction. If a person moves for such 553 relief, the motion must be heard within 5 days after the movant 554 applies for a hearing on the motion or at such time as the court 555 determines is reasonable and appropriate under the circumstances 556 after the movant applies for a hearing on the motion. After 557 notice and a hearing, the court may grant relief for cause 558 shown. 559 (5) An order under subsection (1) or subsection (2) does 560 not operate as a stay or injunction of: 561 (a) Any act, action, or proceeding to foreclose or 562 otherwise enforce a mortgage by the person seeking appointment 563 of the receiver; 564 (b) Any act, action, or proceeding to perfect, or maintain 565 or continue the perfection of, an interest in receivership 566 property; 567 (c) Commencement or continuation of a criminal proceeding; 568 (d) Commencement or continuation of an action or 569 proceeding, or enforcement of a judgment other than a money 570 judgment, in an action or proceeding by a governmental unit to 571 enforce its police or regulatory power; or 572 (e) Establishment by a governmental unit of a tax liability 573 against the receivership property or the owner of such 574 receivership property, or an appeal of any such liability. 575 (6) The court may void an act that violates a stay or 576 injunction under this section. 577 (7) The scope of the receivership property subject to the 578 stay under subsection (1) may be modified upon request of the 579 receiver or other person, after notice and an opportunity for a 580 hearing. 581 (8) In connection with the entry of an order under 582 subsection (1) or subsection (2), the court shall determine 583 whether an additional bond or alternative security will be 584 required as a condition to entry of the stay or injunction and, 585 if required, direct the party requesting the stay or injunction 586 to post a bond or alternative security as a condition for the 587 stay or injunction to become effective. 588 714.15 Engagement and compensation of professional.— 589 (1) With court approval, a receiver may engage an attorney, 590 an accountant, an appraiser, an auctioneer, a broker, or another 591 professional to assist the receiver in performing a duty or 592 exercising a power of the receiver. The receiver shall disclose 593 to the court: 594 (a) The identity and qualifications of the professional; 595 (b) The scope and nature of the proposed engagement; 596 (c) Any potential conflict of interest; and 597 (d) The proposed compensation. 598 (2) A person is not disqualified from engagement under this 599 section solely because of the person’s engagement by, 600 representation of, or other relationship with the receiver, a 601 creditor, or a party. This chapter does not prevent the receiver 602 from serving in the receivership as an attorney, an accountant, 603 an auctioneer, or a broker when authorized by law. 604 (3) A receiver or professional engaged under subsection (1) 605 shall file with the court an itemized statement of the time 606 spent, work performed, and billing rate of each person that 607 performed the work and an itemized list of expenses. The 608 receiver shall pay the amount approved by the court. 609 714.16 Use or transfer of receivership property not in 610 ordinary course of business.— 611 (1) For the purposes of this section, the term “good faith” 612 means honesty in fact and the observance of reasonable 613 commercial standards of fair dealing. 614 (2) Before judgment is entered with respect to the 615 receivership property in the action in which the receiver is 616 appointed, with court approval after notice to all parties with 617 an interest in the property, including all lienholders, and a 618 hearing, a receiver may use or transfer by sale, lease, license, 619 exchange, or other disposition receivership property other than 620 in the ordinary course of business only if the owner of the 621 property: 622 (a) After the commencement of the action in which the 623 receiver is appointed, expressly consents in writing to the 624 receiver’s proposed use or transfer of the receivership 625 property, and the receiver notes the property owner’s express 626 consent in the motion to approve the proposed use or transfer; 627 or 628 (b) Before or at the hearing on the receiver’s motion to 629 approve the use or transfer of the receivership property, fails 630 to object thereto after the receiver in good faith has provided 631 reasonable advance written notice to the property owner of the 632 proposed use or transfer, and the receiver demonstrates in the 633 motion that the proposed use or transfer is necessary to prevent 634 waste, loss, substantial diminution in value, dissipation, or 635 impairment of the property or its revenue-producing potential or 636 to prevent a voidable transaction involving the property. 637 638 Service of notice to lienholders who are not parties to the 639 action must be made as provided in chapter 48 for service of 640 original process or, in the case of a financial institution 641 lienholder, as provided in s. 655.0201. If service cannot be 642 effectuated in such manner, upon authorization by court order, 643 the receiver may effect service of notice on the nonparty 644 lienholder pursuant to chapter 49 or as otherwise ordered by the 645 court. 646 (3) After judgment is entered against the property owner 647 and with court approval in the action in which the receiver is 648 appointed, a receiver may use or transfer receivership property 649 other than in the ordinary course of business to carry the 650 judgment into effect or to preserve nonexempt real property 651 pending appeal or when an execution has been returned 652 unsatisfied and the owner refuses to apply the property in 653 satisfaction of the judgment. 654 (4) The court may order that a transfer of receivership 655 property under this section is free and clear of any liens on 656 the property at the time of the transfer. In such case, any 657 liens on the property, which were valid at the time of the 658 transfer but extinguished by the transfer, attach to the 659 proceeds of the transfer with the same validity, perfection, and 660 priority the liens had on the property immediately before the 661 transfer, even if the proceeds are not sufficient to satisfy all 662 obligations secured by the liens. 663 (5) A transfer under subsection (3) may occur by means 664 other than a public auction sale. A creditor holding a valid 665 lien on the property to be transferred may purchase the property 666 and offset against the purchase price part or all of the allowed 667 amount secured by the lien if the creditor tenders funds 668 sufficient to satisfy in full the reasonable expenses of 669 transfer and the obligation secured by any senior lien 670 extinguished by the transfer. 671 (6) A reversal or modification of an order approving a 672 transfer under subsection (3) does not affect the validity of 673 the transfer to a person that acquired the property in good 674 faith or revive against the person any lien extinguished by the 675 transfer, whether the person knew before the transfer of the 676 request for reversal or modification, unless the court stayed 677 the order before the transfer. 678 714.17 Executory contract.— 679 (1) For the purposes of this section, the term “timeshare 680 interest” has the same meaning as in s. 721.05(36). 681 (2) Except as otherwise provided in subsection (8), with 682 court approval, a receiver may adopt or reject an executory 683 contract of the owner relating to receivership property. The 684 court may condition the receiver’s adoption and continued 685 performance of the contract on terms appropriate under the 686 circumstances. If the receiver does not request court approval 687 to adopt or reject the contract within a reasonable time after 688 the receiver’s appointment, the receiver is deemed to have 689 rejected the contract. 690 (3) A receiver’s performance of an executory contract 691 before court approval under subsection (2) of its adoption or 692 rejection is not an adoption of the contract and does not 693 preclude the receiver from seeking approval to reject the 694 contract. 695 (4) A provision in an executory contract which requires or 696 permits a forfeiture, modification, or termination of the 697 contract because of the appointment of a receiver or the 698 financial condition of the owner does not affect a receiver’s 699 power under subsection (2) to adopt the contract. 700 (5) A receiver’s right to possess or use receivership 701 property pursuant to an executory contract terminates on 702 rejection of the contract under subsection (2). Rejection is a 703 breach of the contract effective immediately before appointment 704 of the receiver. A claim for damages for rejection of the 705 contract must be submitted by the later of: 706 (a) The time set for submitting a claim in the 707 receivership; or 708 (b) Thirty days after the court approves the rejection. 709 (6) If at the time a receiver is appointed, the owner has 710 the right to assign an executory contract relating to 711 receivership property under the laws of this state other than 712 this chapter, the receiver may assign the contract with court 713 approval. 714 (7) If a receiver rejects an executory contract for the 715 sale of receivership property that is real property in 716 possession of the purchaser or a real-property timeshare 717 interest pursuant to subsection (2), the purchaser may: 718 (a) Treat the rejection as a termination of the contract, 719 and in that case the purchaser has a lien on the property for 720 the recovery of any part of the purchase price the purchaser 721 paid; or 722 (b) Retain the purchaser’s right to possession under the 723 contract. If the purchaser retains his or her right to 724 possession pursuant to this paragraph, the purchaser must 725 continue to perform all obligations arising under the contract 726 and may offset any damages caused by nonperformance of an 727 obligation of the owner after the date of the rejection, but the 728 purchaser does not have a right or claim against other 729 receivership property or the receiver on account of the damages. 730 (8) A receiver may not reject an unexpired lease of real 731 property under which the owner is the landlord if: 732 (a) The tenant occupies the leased premises as the tenant’s 733 primary residence; 734 (b) The receiver was appointed at the request of a person 735 other than a mortgagee; or 736 (c) The receiver was appointed at the request of a 737 mortgagee and: 738 1. The lease is superior to the lien of the mortgage; 739 2. The tenant has an enforceable agreement with the 740 mortgagee or the holder of a senior lien under which the 741 tenant’s occupancy will not be disturbed as long as the tenant 742 performs its obligations under the lease; 743 3. The mortgagee has consented to the lease, either in a 744 signed record or by its failure to timely object that the lease 745 violated the mortgage; or 746 4. The terms of the lease were commercially reasonable at 747 the time the lease was agreed to and the tenant did not know or 748 have reason to know that the lease violated the mortgage. 749 714.18 Defenses and immunities of receiver.— 750 (1) A receiver is entitled to all defenses and immunities 751 provided by the laws of this state other than this chapter for 752 an act or omission within the scope of the receiver’s 753 appointment. 754 (2) A receiver may be sued personally for an act or 755 omission in administering receivership property only with 756 approval of the court that appointed the receiver. 757 714.19 Interim report of receiver.—A receiver may file or, 758 if ordered by the court, shall file an interim report that 759 includes: 760 (1) The activities of the receiver since appointment or a 761 previous report; 762 (2) Receipts and disbursements, including a payment made or 763 proposed to be made to a professional engaged by the receiver; 764 (3) Receipts and dispositions of receivership property; 765 (4) Fees and expenses of the receiver and, if not filed 766 separately, a request for approval of payment of the fees and 767 expenses; and 768 (5) Any other information required by the court. 769 714.20 Notice of appointment; claim against receivership; 770 distribution to creditors.— 771 (1) Except as otherwise provided in subsection (6), a 772 receiver shall give notice of appointment of the receiver to 773 creditors of the owner by: 774 (a) Deposit for delivery through first-class mail or other 775 commercially reasonable delivery method to the last known 776 address of each creditor; and 777 (b) Publication as directed by the court. 778 (2) Except as otherwise provided in subsection (6), the 779 notice required under subsection (1) must specify the date by 780 which each creditor holding a claim against the owner which 781 arose before appointment of the receiver must submit the claim 782 to the receiver. The date specified must be at least 90 days 783 after the later of notice under paragraph (1)(a) or last 784 publication under paragraph (1)(b). The court may extend the 785 period for submitting the claim. Unless the court orders 786 otherwise, a claim that is not timely submitted is not entitled 787 to a distribution from the receivership. 788 (3) A claim submitted by a creditor under this section 789 must: 790 (a) State the name and address of the creditor; 791 (b) State the amount and basis of the claim; 792 (c) Identify any property securing the claim; 793 (d) Be signed by the creditor under penalty of perjury; and 794 (e) Include a copy of any record on which the claim is 795 based. 796 (4) An assignment by a creditor of a claim against the 797 owner is effective against the receiver only if the assignee 798 gives timely notice of the assignment to the receiver in a 799 signed record. 800 (5) At any time before entry of an order approving a 801 receiver’s final report, the receiver may file with the court an 802 objection to a claim of a creditor, stating the basis for the 803 objection. The court shall allow or disallow the claim according 804 to the laws of this state other than this chapter. 805 (6) If the court concludes that receivership property is 806 likely to be insufficient to satisfy claims of each creditor 807 holding a perfected lien on the property, the court may order 808 that: 809 (a) The receiver need not give notice under subsection (1) 810 of the appointment to all creditors of the owner, but only such 811 creditors as the court directs; and 812 (b) Unsecured creditors need not submit claims under this 813 section. 814 (7) Subject to s. 714.21: 815 (a) A distribution of receivership property to a creditor 816 holding a perfected lien on the property must be made in 817 accordance with the creditor’s priority under the laws of this 818 state other than this chapter; and 819 (b) A distribution of receivership property to a creditor 820 with an allowed unsecured claim must be made as the court 821 directs according to the laws of this state other than this 822 chapter. 823 714.21 Fees and expenses.— 824 (1) The court may award a receiver from receivership 825 property the reasonable and necessary fees and expenses of 826 performing the duties of the receiver and exercising the powers 827 of the receiver. 828 (2) The court may order one or more of the following to pay 829 the reasonable and necessary fees and expenses of the 830 receivership, including reasonable attorney fees and costs: 831 (a) A person that requested the appointment of the 832 receiver, if the receivership does not produce sufficient funds 833 to pay the fees and expenses; or 834 (b) A person whose conduct justified or would have 835 justified the appointment of the receiver under s. 714.06(1)(a). 836 714.22 Removal of receiver; replacement; termination of 837 receivership.— 838 (1) The court may remove a receiver for cause. 839 (2) The court shall replace a receiver that dies, resigns, 840 or is removed. 841 (3) If the court finds that a receiver that resigns or is 842 removed, or the representative of a receiver that is deceased, 843 has accounted fully for and turned over to the successor 844 receiver all receivership property and has filed a report of all 845 receipts and disbursements during the service of the replaced 846 receiver, the replaced receiver is discharged. 847 (4) The court may discharge a receiver and terminate the 848 court’s administration of the receivership property if the court 849 finds that appointment of the receiver was improvident or that 850 the circumstances no longer warrant continuation of the 851 receivership. If the court finds that the appointment was sought 852 wrongfully or in bad faith, the court may assess against the 853 person that sought the appointment: 854 (a) The fees and expenses of the receivership, including 855 reasonable attorney fees and costs; and 856 (b) Actual damages caused by the appointment, including 857 reasonable attorney fees and costs. 858 714.23 Final report of receiver; discharge.— 859 (1) Upon completion of a receiver’s duties, the receiver 860 shall file a final report including: 861 (a) A description of the activities of the receiver in the 862 conduct of the receivership; 863 (b) A list of receivership property at the commencement of 864 the receivership and any receivership property received during 865 the receivership; 866 (c) A list of disbursements, including payments to 867 professionals engaged by the receiver; 868 (d) A list of dispositions of receivership property; 869 (e) A list of distributions made or proposed to be made 870 from the receivership for creditor claims; 871 (f) If not filed separately, a request for approval of the 872 payment of fees and expenses of the receiver; and 873 (g) Any other information required by the court. 874 (2) If the court approves a final report filed under 875 subsection (1) and the receiver distributes all receivership 876 property, the receiver is discharged. 877 714.24 Receivership in another state; ancillary 878 proceeding.— 879 (1) The court may appoint a receiver appointed in another 880 state, or that person’s nominee, as an ancillary receiver with 881 respect to property located in this state or subject to the 882 jurisdiction of the court for which a receiver could be 883 appointed under this chapter, if: 884 (a) The person or nominee would be eligible to serve as 885 receiver under s. 714.07; and 886 (b) The appointment furthers the person’s possession, 887 custody, control, or disposition of property subject to the 888 receivership in the other state. 889 (2) The court may issue an order that gives effect to an 890 order entered in another state appointing or directing a 891 receiver. 892 (3) Unless the court orders otherwise, an ancillary 893 receiver appointed under subsection (1) has the rights, powers, 894 and duties of a receiver appointed under this chapter. 895 714.25 Effect of enforcement by mortgagee.—A request by a 896 mortgagee for the appointment of a receiver, the appointment of 897 a receiver, or the application by a mortgagee of receivership 898 property or proceeds to the secured obligation does not: 899 (1) Make the mortgagee a mortgagee in possession of the 900 real property; 901 (2) Make the mortgagee an agent of the owner; 902 (3) Constitute an election of remedies which precludes a 903 later action to enforce the secured obligation; 904 (4) Make the secured obligation unenforceable; 905 (5) Limit any right available to the mortgagee with respect 906 to the secured obligation; or 907 (6) Constitute an action under chapter 702. 908 714.26 Uniformity of application and construction.—In 909 applying and construing this chapter, consideration must be 910 given to the need to promote uniformity of the law with respect 911 to its subject matter among states that have enacted a similar 912 law. 913 714.27 Relation to electronic signatures in global and 914 national commerce act.—This act modifies, limits, or supersedes 915 the Electronic Signatures in Global and National Commerce Act, 916 15 U.S.C. ss. 7001 et seq., but does not modify, limit, or 917 supersede s. 101(c) of that act, 15 U.S.C. s. 7001(c), or 918 authorize electronic delivery of any of the notices described in 919 s. 103(b) of that act, 15 U.S.C. s. 7003(b). 920 714.28 Transition.—This chapter does not apply to a 921 receivership for which the receiver was appointed before July 1, 922 2020. 923 Section 2. This act shall take effect July 1, 2020.