Panel backs Uniform Commercial Real Estate Receivership Act with study amendment

The House Industry, Business and Labor Committee recommended a do-pass on Senate Bill 2,122, the Uniform Commercial Real Estate Receivership Act, and adopted an amendment directing a study of whether broader changes to North Dakota’s receivership law are warranted.

Peril Grossman, representing the North Dakota Commission on Uniform Laws, introduced the uniform-act proposal and walked the committee through the act’s chapters and key provisions. The bill would create a new chapter (proposed chapter 30‑2‑10.1), define receivership property, spell out appointment standards, require receiver bonding, delineate receiver powers (including turnover, collection, use and transfer of receivership property, and the ability to assume executory contracts), and establish reporting, notice, and fee provisions. The measure limits application to commercial property (excluding 1–4 dwelling units unless used commercially) and preserves notice and hearing protections, Grossman said.

Rick Clayberg, president and CEO of the North Dakota Bankers Association, said banks and other creditors support the measure because it provides clarity and predictable procedures in commercial real-estate receiverships that the current 80‑year-old statutory framework does not. “Real estate receiverships play a crucial role in resolving distressed property situations, protecting the asset, and ensuring equitability among all outcomes for all stakeholders,” Clayberg testified.

Lisa Cruz, commissioner of the Department of Financial Institutions, said her agency supports the bill and that a uniform statutory framework helps banks and customers operating across states.

Committee members discussed an informal, late-filed set of proposed changes (referred to in testimony as a hip-pocket amendment) that would have expanded the act to general commercial receiverships and repealed a portion of the existing receivership statute. The committee adopted an amendment, sponsored by Representative Clameen (filed by Representative Shower during the session), to study broader receivership issues during the interim rather than adopt a wide-ranging change now. The Uniform Law Commission and stakeholders agreed the study was appropriate; the bill was then advanced as amended.

Representative Shower moved to adopt the study amendment and to recommend a do-pass on the bill as amended; Representative Greenberg seconded. The committee adopted the amendment by voice vote and approved the do-pass on roll call. Representative Schauer agreed to carry the bill.

If enacted, the new chapter would provide a single statutory reference for courts, practitioners, and stakeholders handling commercial real estate receiverships in North Dakota and would make many powers and duties of receivers explicit in statute rather than dependent solely on individual court orders.