By Kenneth Dante Murena and Zachary Hyman

As more businesses struggle to continue operations and meet financial obligations, mortgage defaults are likely to surge resulting in a significant increase in lenders’ efforts to exercise their rights to recover amounts owed, including through foreclosure proceedings. While Governor DeSantis has extended the moratorium on residential foreclosures, Executive Order Number 20-94 does not prohibit lenders from seeking to foreclose on commercial real property. As a result, as Courts reopen, they are likely to be inundated with commercial real estate foreclosures causing a backlog of cases that may further impair the value of commercial real estate already in decline as a result of the global health and economic crisis. Fortunately, the Uniform Commercial Real Estate Receivership Act (“UCRERA”), which will become effective on July 1, 2020 if Governor DeSantis signs the legislation unanimously passed by Florida Legislature, will offer lenders and other interested parties efficient and effective remedies and procedures to protect their interests in commercial real property in Florida, and personal property that is used to operate and maintain such commercial real estate.

UCRERA, if enacted, will provide certainty and uniformity among Florida’s Circuit Courts as to the law governing the circumstances under which a receiver can be appointed over commercial real property, the powers and duties of such a receiver, and the procedures a court should follow in a receivership proceeding. In particular, the Act will offer significant guidance to courts and litigants concerning when a receiver can be appointed to take possession of commercial real property serving as collateral for a loan in default, and in the context of other disputes involving commercial real estate. The Act will permit a Court, in deciding whether to appoint a receiver, to consider whether the appointment is necessary to protect the property from waste, loss, substantial diminution in value, or impairment, and whether the owner of the real property agreed to the appointment of a receiver upon default, among other factors. It will also allow...

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