N.Y. PBH Law § 2810 — New York Code / Act PBH / Article 28 / Section 2810
Residential health care facilities; receivership
Status: in_force

§ 2810. Residential health care facilities; receivership. 1.  The\nowner or owners of any residential health care facility may at any time\nrequest the department to take over the operation of such facility by\nthe appointment of a receiver. Upon receiving such a request, the\ndepartment may, if it deems such action desirable, enter into an\nagreement with any such owners on the appointment of a receiver to take\ncharge of the facility under whatever conditions as shall be found\nacceptable by both parties. Receivership commenced in accordance with\nthe provisions of this subdivision shall terminate at such time as is\nagreed upon by the parties, or at such time as either party notifies the\nother in writing that he wishes to terminate such receivership.\n  2. a. As a means of protecting the health, safety and welfare of the\npatients in a residential health care facility, whenever the\ncommissioner revokes the operating certificate of such a facility he\nshall apply to the supreme court in the county where the facility is\nsituated for an order directing the owner of the land and/or structure\non or in which the facility is located to show cause why the\ncommissioner, or his designee, should not be appointed receiver to take\ncharge of the facility. In those cases where operating certificates have\nbeen revoked pursuant to paragraph (a) of subdivision five of section\ntwenty-eight hundred six of this chapter the supreme court shall appoint\na receiver who may be the commissioner or his designee. Such application\nshall contain proof by affidavit that the facility has had its operating\ncertificate revoked. Such order to show cause shall be returnable not\nless than five days after service is completed and shall provide for\npersonal service of a copy thereof and the papers on which it is based\non the owner or owners of the land and/or structure on or in which the\nfacility is located.  If any such owner cannot with due diligence be\nserved personally within the county where the property is located and\nwithin the time fixed in such order, then service may be made on such\nperson by posting a copy thereof in a conspicuous place within the\nfacility in question, and by sending a copy thereof by registered mail,\nreturn receipt requested, to such owner at the last address registered\nby him with the department, or in the absence of such registration, to\nthe address set forth in the last recorded deed with respect to such\nfacility.  Service shall be deemed complete on filing proof of service\nthereof in the office of the county clerk, or the clerk of the city of\nNew York, as the case may be.\n  b. On the return of said order to show cause, determination shall have\nprecedence over every other business of the court unless the court shall\nfind that some other pending proceeding, having similar statutory\nprecedence, shall have priority.  The court may conduct a hearing at\nwhich all interested parties shall have the opportunity to present\nevidence pertaining to the application. If the court shall find that the\nfacts warrant the granting thereof, then the commissioner, or any person\ndesignated by the commissioner, shall be appointed receiver to take\ncharge of the facility, and the court shall determine a fair monthly\nrental for the facility, and for the furniture, fixtures and movable\nequipment therein, taking into account all relevant factors, including\nthe condition of such facility, and the condition of such furniture,\nfixtures and movable equipment, which amount shall, except in the case\nwhere the receiver is assuming an existing bona fide arm's length lease,\nnot exceed the amount which would be reimbursable to the facility under\nthe medical assistance program for real property costs and for the costs\nof furniture, fixtures and movable equipment if each patient in the\nfacility were a recipient of medical assistance. Such rental shall be\npaid by the receiver to the owner or owners of the facility and to the\nowner or owners of the furniture, fixtures and movable equipment therein\nfor each month that the receivership remains in effect.\n  c. Any receiver appointed pursuant to this subdivision shall have all\nof the powers and duties of a receiver appointed in an action to\nforeclose a mortgage on real property, together with such additional\npowers and duties as are herein granted and imposed. The receiver shall\nwith all reasonable speed but, in any case, within eighteen months after\nthe date on which the receivership was ordered provide for the orderly\ntransfer of all patients in the facility to other facilities or make\nother provisions for their continued safety and health care.  During the\ninterim period when such patients must remain in the facility, the\nreceiver may correct or eliminate those deficiencies in the facility\nthat seriously endanger the life, health or safety of such patients\nprovided that such correction or elimination of deficiencies does not\ninclude major alterations of the physical structure of the facility. He\nshall, during this period, operate the facility in such a manner as to\nguarantee safety and adequate health care for such patients.  He shall\nhave the power to let contracts therefor or incur expenses provided that\nwhere individual items of repairs, improvements or supplies exceed three\nthousand dollars, the receiver shall obtain price quotations from at\nleast three reputable sources. The receiver shall not be required to\nfile any bond. He shall collect incoming payments from all sources and\napply them to the costs incurred in the performance of his functions as\nreceiver.  The receiver shall honor all existing leases, mortgages and\nchattel mortgages that had previously been undertaken as obligations of\nthe owners or operators of the facility.  No security interest in any\nreal or personal property comprising the facility or contained within\nthe facility, or in any fixture of the facility, shall be impaired or\ndiminished in priority by the receiver. The receiver shall compensate\nthe owner or owners of any goods held in inventory for those goods which\nhe uses or causes to be used by reimbursing the costs of such goods,\nexcept that no such compensation shall be made for any such goods for\nwhich the owners or operators of the facility have already been\nreimbursed. Neither the receiver nor the department shall engage in any\nactivity that constitutes a confiscation of property without the payment\nof fair compensation.\n  d. The receiver shall be entitled to the same fees, commissions and\nnecessary expenses as receivers in actions to foreclose mortgages. The\nreceiver shall be liable only in his official capacity for injury to\nperson and property by reason of conditions of the facility in a case\nwhere an owner would have been liable; he shall not have any liability\nin his personal capacity, except for gross negligence and intentional\nacts. The personnel and facilities of the department shall be available\nto the receiver for the purposes of carrying out his duties as receiver\nand the cost of such services shall be deemed a necessary expense of the\nreceiver.\n  e. (i) The court shall terminate the receivership only under any of\nthe following circumstances:\n  (a) eighteen months after the date on which it was ordered;\n  (b) when the department grants the facility a new operating\ncertificate, whether the structure of the facility or the land on which\nit is located shall be under the same or different ownership; or\n  (c) at such time as all of the patients in the facility have been\nprovided alternative modes of health care, either in another facility or\notherwise.\n  (ii) At the time of termination, the receiver shall render a full and\ncomplete accounting to the court and shall make disposition of surplus\nmoney at the direction of the court.\n  f. (i) Any person who is served a copy of an order of the court\nappointing the receiver shall, upon being notified of the name and\naddress of the receiver, make all payments for goods supplied by the\nfacility, or services rendered by the facility, to the receiver. A\nreceipt shall be given for each such payment, and copies of all such\nreceipts shall be kept on file by the receiver.  The amount so received\nshall be deposited by the receiver in a special account which shall also\nbe used for all disbursements made by the receiver.\n  (ii) Any person refusing or omitting to make such a payment after such\nservice and notice may be sued therefor by the receiver. Such person\nshall not in such suit dispute the authority of the receiver to incur or\norder such expenses, or the right of the receiver to have such payments\nmade to him. The receipt of the receiver for any sum paid to him shall,\nin all suits and proceedings and for every purpose, be as effectual in\nfavor of any person holding the same as actual payment of the amount\nthereof to the owner or other person or persons who would, but for the\nprovisions of this subdivision, have been entitled to receive the sum so\npaid. No patient shall be discharged, nor shall any contract or rights\nbe forfeited or impaired, nor any forfeiture or liability be incurred,\nby reason of any omission to pay any owner, contractor or other person\nany sum so paid to the receiver.\n  g. Any other provision of this chapter notwithstanding, the department\nmay, if it deems appropriate, grant to any facility operating or\nscheduled to operate under a receivership authorized by this subdivision\nan operating certificate the duration of which shall be limited to the\nduration of the receivership.\n  h. No provision contained herein shall be deemed to relieve the owner\nor any other person of any civil or criminal liability incurred, or any\nduty imposed by law, by reason of acts or omissions of the owner or any\nother person prior to the appointment of any receiver hereunder, nor\nshall anything contained herein be construed to suspend during the\nreceivership any obligation of the owner or any other person for the\npayment of taxes or other operating and maintenance expenses of the\nfacility nor of the owner or any other person for the payment of\nmortgages or liens.\n  * 3. The commissioner is authorized to make non-interest bearing\npayments to receivers appointed pursuant to this section within the\namounts made available therefor by the legislature. No such payment\nshall be made unless the commissioner reasonably anticipates that\nrepayment shall be made prior to or upon termination of the\nreceivership. Any such payment to a receiver shall be made pursuant to a\nrepayment agreement entered into by the receiver with the commissioner\nwhich shall specify a time within which full repayment must be made.\nRepayments by receivers shall be applied to reimburse any first instance\nappropriation made for the purposes of this subdivision.\n  * NB (Effective pending Federal Law)\n