Receiverships & Distressed Real Estate Explained | Kristine Pizzuti, First American Title [5/1/26]

Kristine Pizzuti, VP and Underwriting Counsel at First American Title, joins HFO partner Greg Frick to demystify Oregon receiverships and the rise of distressed commercial assets since 2018. They cover how receiverships work, why lenders are increasingly choosing them over foreclosure, the role of title insurance when a court-appointed receiver sells a property, and why downtown Portland office properties—not multifamily — is where the action is right now.

KEY TAKEAWAYS FOR MULTIFAMILY OWNERS, INVESTORS & DEVELOPERS:

• Oregon’s 2018 Uniform Receivership Statute codified what had been case-law-dependent, giving lenders far more certainty
• Receiverships are increasingly run in tandem with foreclosure, not as an either/or
• Lenders prefer receivership in many cases because the asset never enters the lender’s title
• Practitioners call it the “rocket “docket”—faster relief than traditional foreclosure
• A court orders the sale free and clear of liens; proceeds are divided equitably by priority
• Receivership remedies aren’t limited to lenders; aggrieved LLC members, and estate beneficiaries can use them too
• Most Oregon receivership activity is in office, and some hospitality. Multifamily has largely been spared so far
• Four to five buildings in downtown Portland alone are in active receivership
• Title insurance is critical at closing. Receivers don’t make seller reps and warranties

Interview summary:

Receiverships Are Rising in Oregon. Here’s What Multifamily Owners Should Know

By HFO Market Research (Aaron Kirk Douglas)

Receiverships have moved from a rarely used legal tool to one Oregon creditors now reach for with growing frequency. The shift began with a 2018 statute and accelerated after the pandemic stressed commercial real estate. Most of the activity sits in offices and some hospitality assets, but the trend is worth watching for multifamily owners and operators who deal with lenders, partners, and complex ownership structures.

In a recent episode of Multifamily Marketwatch, HFO partner Greg Frick spoke with Christine Pizzuti, VP and underwriting counsel for First American Title Company, about what is driving the increase and how the process works.

A statute that changed the game

Receiverships are not new, but for years they were unpredictable. Outcomes depended on a patchwork of case law that varied by state. That changed when Oregon adopted the Uniform Commercial Real Estate Receivership Act, which took effect in 2018.

“A receivership is a legal process where an aggrieved party goes to a court and petitions to have a receiver appointed to take control of assets,” Pizzuti said. “We are seeing a lot more of them in Oregon in general since 2018, and definitely a lot more of them since COVID and the distressed assets that have come out as a result of that, mostly in office and some in hospitality.”

Pizzuti said the statute gave judges clearer guidance and gave creditors more certainty about what to expect. Some practitioners now refer to it as a “rocket docket” because relief can come faster than through a traditional foreclosure.

Why lenders are using it

The Great Recession left many banks holding properties they never wanted to own. A receivership lets a lender push an independent third party into control of an asset without taking title.

“They won’t go into title if they do the receivership,” Pizzuti said. “It’s efficient to have a third party selling the property. And it’s faster, and there’s more flexibility than following the foreclosure statutes.”

Frick noted that lenders sometimes pair the two tools. “Are they able to bring a receivership in not in lieu of doing a foreclosure?” he asked. Pizzuti confirmed that lenders often run them in tandem to maximize remedies.

A receivership is still considered an equitable, and somewhat harsh, remedy. Courts weigh the interests of every party with a stake in the property before appointing anyone, and the receiver must be a neutral third party. The petitioner does not always get the receiver they ask for, and sometimes the court declines to appoint one at all.

How the sale process works

Once appointed, a receiver typically seeks court orders for major actions, including the sale of the property. Sales are made free and clear of existing liens, with proceeds distributed based on the priority of each claim.

“Instead of doing a foreclosure where they’re looking at the priority of position, the court will order the sale of the property free and clear of the liens, but the proceeds of the sale are going to be divided equitably based on the priority of the parties,” Pizzuti said. “Basically, it’s just switching out the security being the real property, because there’s not enough to go around.”

That structure makes title insurance especially important. The receiver carries no liability after closing, and the prior owner is not making the usual representations and warranties. The title policy becomes the buyer’s main protection.

Limited multifamily exposure, for now

So far, the surge has not reached Oregon multifamily in any meaningful way. “We just don’t have a lot of that here,” Frick said, comparing Portland with markets where servicers are taking back dozens of properties at once. Pizzuti agreed: “Mostly we’re seeing it in office. Haven’t seen anything in industrial, not super common in multifamily, at least here.”

She added that she can think of four or five buildings in downtown Portland currently in receivership.

Beyond the lender context

Receiverships are not limited to lender disputes. A member of an LLC, a family member in an estate matter or another aggrieved party can petition for one if the operating agreement or underlying facts support it.

“You can have people who are a member of an LLC that feel aggrieved, and they have the same remedies,” Pizzuti said.

For multifamily owners, the takeaway is twofold. Distress in the sector remains limited, but receiverships are now a more accessible tool in Oregon than they were a decade ago. Owners with complex partnerships, mechanics liens or stretched capital stacks should understand the process before it touches their portfolio.