Commercial Real Estate Litigation in Washington, DC

Name: Waxman Litigation — Chevy Chase office
Address: 5425 Wisconsin Ave Ste 600, Chevy Chase, MD, 20815, US

The District has a receivership statute written specifically for commercial real property, and it is a different statute from the one that governs receiverships over companies. The Uniform Commercial Real Estate Receivership Act, at D.C. Code §§ 42–1641 to 42–1662, applies by its own terms to “a receivership for an interest in real property and any personal property related to or used in operating the real property” (§ 42–1643(a)). Getting that boundary right is the first question in any distressed-property dispute.

Which receivership statute applies to property?

This distinction catches people out, and it matters because the two Acts do different things:

Situation	Statute	What it provides
Receivership over an interest in real property	D.C. Code §§ 42–1641 to 42–1662 (UCRERA)	Powers and duties of receiver, stay, use or transfer of receivership property, claims and distribution, fees, termination
Receivership over a company	D.C. Code § 29–312.22	Receiver to wind up and liquidate, or custodian to manage the corporation
Receiver over a transferred asset	D.C. Code § 28–3107(a)(3)(B)	Receiver takes charge of the asset transferred or other property of the transferee

Sources: D.C. Code §§ 42–1643, 29–312.22, 28–3107. Read § 42–1643’s scope and exclusions before relying on UCRERA.

§ 42–1643 also carries exclusions, including for real property improved by one to four dwelling units, subject to conditions. Scope is the first thing to check, not the last. For company receiverships see court-appointed receiverships.

What commercial property disputes arise?

Lease defaults and terminations, purchase and sale disputes, construction and defect claims, and disputes between co-owners of a property-holding entity. Where the dispute is really between the owners of the entity rather than about the property, the ownership route applies. See ownership disputes. Where construction is involved see construction litigation.

What limitation periods apply?

Limitation periods in D.C. real property disputes vary widely by claim, 15 years to recover land, 12 years on an instrument under seal, and 3 years for a simple contract or damage to property.

Claim	Period	Section
Recovery of lands, tenements or hereditaments	15 years	§ 12–301(1)
Damages for injury to real or personal property	3 years	§ 12–301(3)
Simple contract (leases, agreements)	3 years	§ 12–301(7)
Instrument under seal	12 years	§ 12–301(6)

Source: D.C. Code § 12–301. Accrual is fact-specific.

Frequently asked questions

Is UCRERA the same as the company receivership statute?

No, they are different statutes for different assets. UCRERA applies to a receivership for an interest in real property under § 42–1643(a); receiverships over a corporation are governed by § 29–312.22.

Does UCRERA cover residential property?

It excludes real property improved by one to four dwelling units unless certain conditions are met. Read the section itself before relying on it. See § 42–1643.

How long do we have to bring a property claim?

The period varies widely with the kind of claim. Recovery of land is fifteen years under § 12–301(1), damage to property is three years under § 12–301(3), and a simple contract is three.

Our dispute is with a co-owner, not about the property. Which route?

Then it is likely an ownership dispute under Title 29 rather than a property claim.

Who can ask the court to appoint a receiver over commercial property?

A party with an apparent right, title or interest in the real property, and a mortgagee enforcing a mortgage. D.C. Code § 42–1645(a)(1) — part of the District’s receivership Act for real property, whose scope § 42–1643(a) sets — allows appointment before judgment where the property or its revenue-producing potential is being subjected to, or is in danger of, waste, loss, dissipation or impairment.

Why appoint a receiver instead of seeking an injunction?

Because an injunction tells someone to stop, while a receiver takes over. Under D.C. Code § 42–1650, in a real property receivership under that Act, a person owing a debt that is receivership property must pay the receiver rather than the owner, and anyone holding receivership property must turn it over — with failure to do so sanctionable as civil contempt.

Where is property in the District handled when the receivership was opened in another state?

Here, through an ancillary appointment. D.C. Code § 42–1663 lets the Superior Court appoint a receiver appointed in another state, or that person’s nominee, as an ancillary receiver over real property located in the District, where the appointment furthers their control of property in the other receivership.

How can property be sold out of a receivership?

With the court’s approval, and usually free of junior interests. For a receivership over real property, D.C. Code § 42–1655(c) permits a transfer other than in the ordinary course by sale, lease, license, exchange or other disposition, free and clear of the lien of the person that obtained the appointment, any subordinate lien and any right of redemption — but subject to a senior lien.

Who pays the receiver’s fees?

The receivership property pays first. In a real property receivership the Superior Court may award the receiver reasonable and necessary fees and expenses out of that property, and where it is not sufficient, order payment by the person who requested the appointment or by the person whose conduct justified it. See D.C. Code § 42-1660.

Sources and legal authorities

General information about D.C. law, not legal advice. Which rule applies depends on the entity, the agreement and the facts.