Tenant’s Receivership

Del. Code tit. 25, ch. 59

in effect

Del. Code tit. 25, § 5901 Petition for receivership; grounds, notice and jurisdiction.

Any tenant or group of tenants may petition for the establishment of a receivership in a Justice of the Peace Court upon the grounds that there has existed for 5 days or more after notice to the landlord: (1) If the rental agreement, or any state or local statute, code, regulation or ordinance, places a duty upon the landlord to so provide, a lack of heat, or of running water, or of light, or of electricity, or of adequate sewage facilities; (2) Any other conditions imminently dangerous to the life, health or safety of the tenant.

Del. Code tit. 25, § 5902 Necessary parties defendant.

(a) Petitioners shall join as defendants: (1) All parties duly disclosed to any of them in accordance with § 5105 of this title; and (2) All parties whose interest in the property is: a. A matter of public record; and b. Capable of being protected in this proceeding. (b) Petitioner shall not be prejudiced by a failure to join any other interested parties.

Del. Code tit. 25, § 5903 Defenses.

It shall be sufficient defense to this proceeding, if any defendant of record establishes that: (1) The condition or conditions described in the petition do not exist at the time of trial; or (2) The condition or conditions alleged in the petition have been caused by the wilful or grossly negligent acts of 1 or more of the petitioning tenants or members of the tenant’s or tenants’ families or by other persons on the premises with the tenant’s or tenants’ consent; or (3) Such condition or conditions would have been corrected, were it not for the refusal by any petitioner to allow reasonable access.

Del. Code tit. 25, § 5904 Stay of judgment by defendant.

(a) If, after a trial, the Court shall determine that the petition should be granted, the Court shall immediately enter judgment thereon and appoint a receiver as authorized herein; provided, however, prior to the entry to judgment and appointment of a receiver, the owner or any mortgagee or lienor of record or other person having an interest in the property may apply to the Court to be permitted to remove or remedy the conditions specified in the petition. If such person demonstrates the ability to perform promptly the necessary work and posts security for the performance thereof within the time, and in the amount and manner, deemed necessary by the Court, then the Court may stay judgment and issue an order permitting such person to perform the work within a time fixed by the Court and requiring such person to report to the Court periodically on the progress of the work. The Court shall retain jurisdiction over the matter until the work is completed. (b) If, after the issuance of an order under the foregoing provision but before the time fixed in such order for the completion of the work prescribed therein, there is reason to believe that the work will not be completed pursuant to the court’s order or that the person permitted to do the same is not proceeding with due diligence, the Court or the petitioners, upon notice to all parties to the proceeding, may move that a hearing be held to determine whether judgment should be rendered immediately as provided in the following subsection. (c) (1) If, upon a hearing authorized in the preceding subsection, the Court shall determine that such party is not proceeding with due diligence, or upon the actual failure of such person to complete the work in accordance with the provisions of the order, the Court shall appoint a receiver as authorized herein. (2) Such judgment shall direct the receiver to apply the security posted to executing the powers and duties as described herein. (3) In the event that the amount of such security should be insufficient to accomplish the above objectives, such judgment shall direct the receiver to collect the rents, profits and issues to the extent of the deficiency. In the event that the security should exceed the amount necessary to accomplish the above objectives, such judgment shall direct the receiver to return the excess to the person posting the security.

Del. Code tit. 25, § 5905 Receivership procedures.

The receiver shall be the Division of Consumer Protection of the State or its successor agency. (1) Upon its appointment, the receiver must make within 15 days an independent finding whether there is proper cause shown for the need for rent to be paid to it and for the employment of a private contractor to correct the condition complained of in § 5901 of this title and found by the Court to exist. (2) If the receiver shall make such a finding, it shall file a copy of the finding with the recorder of deeds of the county where the property lies and it shall be a lien on that property where the violation complained of exists. (3) Upon completion of the aforesaid contractual work and full payment of the contractor, the receiver shall file a certification of such with the recorder of deeds of the appropriate county, and this filing shall release the aforesaid lien. (4) The receiver shall forthwith give notice to all lienholders of record. (5) If the receiver shall make a finding at such time or any other time that for any reason the appointment of a receiver is not appropriate, it shall be discharged upon notification of the Court and all interested parties and shall make legal distribution of any funds in its possession.

Del. Code tit. 25, § 5906 Powers and duties of the receiver.

The receiver shall have all the powers and duties accorded a receiver foreclosing a mortgage on real property and all other powers and duties deemed necessary by the Court. Such powers and duties shall include, but are not necessarily limited to, collecting and using all rents and profits of the property, prior to and despite any assignment of rent, for the purposes of: (1) Correcting the condition or conditions alleged in the petition; (2) Materially complying with all applicable provisions of any state or local statute, code, regulation or ordinance governing the maintenance, construction, use or appearance of the building and surrounding grounds; (3) Paying all expenses reasonably necessary to the proper operation and management of the property including insurance, mortgage payments, taxes and assessments and fees for the services of the receiver and any agent the receiver should hire; (4) Compensating the tenants for whatever deprivation of their rental agreement rights resulted from the condition or conditions alleged in the petition; and (5) Paying the costs of the receivership proceeding.

Del. Code tit. 25, § 5907 Discharge of the receiver.

(a) In addition to those situations described in § 5905 of this title, the receiver may also be discharged when: (1) The condition or conditions alleged in the petition have been remedied; (2) The property materially complies with all applicable provisions of any state or local statute, code, regulation or ordinance governing the maintenance, construction, use or appearance of the building and the surrounding grounds; (3) The costs of the above work and any other costs as authorized herein have been paid or reimbursed from the rents and profits of the property; and (4) The surplus money, if any, has been paid over to the owner. (b) Upon paragraphs (a)(1) and (2) of this section being satisfied, the owner, mortgagee or any lienor may apply for the discharge of the receiver after paying to the latter all moneys expended by the receiver and all other costs which have not been paid or reimbursed from the rent and profits of the property. (c) If the Court determines that future profits of the property will not cover the costs of satisfying paragraphs (a)(1) and (2) of this section, the Court may discharge the receiver and order such action as would be appropriate in the situation, including but not limited to terminating the rental agreement and ordering the vacation of the building within a specified time. In no case shall the Court permit repairs which cannot be paid out of the future profits of the property.

Source: DE Code (Official Site)URL: https://delcode.delaware.gov/title25/c059/index.htmlFetched: 10/4/2026