NY Ment Hygiene L § 16.27 (2021)
2021 New York Laws MHY - Mental Hygiene Title C - Developmental Disabilties Act Article 16 - Regulation and Quality of Services 16.27 - Residential Facilities; Receivership.

§ 16.27 Residential facilities; receivership.  (a) The operator of any facility may at any time request the office to take  over  the  operation  of  such  facility  by  the appointment of a receiver. Upon receiving such a request, the office  may,  if  it  deems such  action  desirable, enter into an agreement with any such operators with respect to the appointment of a receiver  to  take  charge  of  the facility   under   conditions  as  found  acceptable  by  both  parties. Receivership  commenced  in  accordance  with  the  provisions  of  this subdivision  shall  terminate  at  such  time  as may be provided in the receivership agreement, or one hundred twenty days after the receipt  by either  party of written notice that the other party wishes to terminate such receivership.  (b) (1) a. If the commissioner  has  reason  to  believe  that  it  is necessary  to protect the health, safety and welfare of the persons with developmental disabilities in a residential facility,  at  the  time  of temporary  suspension of the operating certificate of such a facility or upon issuance of  a  notice  of  intention  to  revoke  or  suspend  the operating  certificate  of  such a facility pursuant to section 16.17 of this article, or at  the  time  of  any  notice  of  disapproval  of  an application  for  issuance  or  renewal  of such certificate pursuant to section 16.05 of this article, the commissioner may apply to the supreme court in the county where the facility is situated for an order to  show cause  why  a  receiver  should  not  be appointed to take charge of the facility. The supreme court shall, upon the request of the commissioner, and upon determining that the notice was properly issued  and  that  the health,   safety   and   welfare   of  the  persons  with  developmental disabilities would be served by the appointment of a receiver to operate the facility, appoint a receiver to commence operating the facility upon the effective date of the revocation, suspension, temporary  suspension, denial or nonrenewal of the operating certificate of such facility.   b.  The  receiver  should,  where  reasonably possible, be a voluntary association or  not-for-profit  corporation  which  holds  a  valid  and current  operating  certificate  for  a residential facility pursuant to section 16.05 of this article (or which shall satisfactorily demonstrate its lawful qualifications  for  such  operating  certificate)  with  the approval  of  the  commissioner,  an  employee  of  the  office or other designee.   c. Such application for an order to show cause, shall contain proof by affidavit that the commissioner has temporarily suspended the facility's operating certificate or has issued a notice  of  intention  to  revoke, suspend, or deny issuance or renewal of its operating certificate.   d.  In the case of a temporary suspension of an operating certificate, a temporary receiver may be appointed and a temporary restraining  order may  be  granted.  If  the  commissioner  demonstrates  that,  unless  a temporary receiver is appointed and a  temporary  restraining  order  is granted before a hearing can be held, the health or safety of any person with  developmental  disabilities  will  be  in  imminent danger or that property necessary to the operation of the facility will be in  imminent danger  of  removal  or  destruction,  a  temporary  receivership  and a temporary restraining order may be granted without notice. The temporary receivership and temporary restraining order shall be in effect  pending a determination of the order to show cause.   e.  The  order  to  show  cause why a receiver should not be appointed shall be returnable not less than five days after service is  completed; provided,  however,  that  in  the case of an appointment of a temporary receiver  without  notice  to  the  owner  or   operator   pursuant   to subparagraph  d  of  this  paragraph,  the  order to show cause shall be  returnable no  more  than  fourteen  days  from  the  appointment  of  a temporary receiver.   f.  The  order  to  show cause shall provide for personal service of a copy thereof and the papers on which it is based on the owner or  owners of  the  real property on or in which the facility is located and on the facility operator. In the case of an appointment of a temporary receiver without notice to the owner or operator pursuant to  subparagraph  d  of this  paragraph,  such  order  to  show cause shall provide for personal service upon such owner and operator within thirty-six hours  after  the appointment  of  the temporary receiver. If any owner or operator cannot with due diligence be served personally  within  the  county  where  the property  is  located  and  within  the  time  fixed in such order, then service may be made on such person  by  posting  a  copy  thereof  in  a conspicuous place within the facility in question, and by sending a copy thereof by certified mail, return receipt requested, to such operator at the last address registered by him with the department and such owner to the  address  set  forth  in the last recorded deed with respect to such real property on or in which the facility is located.  Service shall  be deemed  complete on filing proof of service thereof in the office of the county clerk, or the clerk of the city of New York, as the case may be.  (2) On the return of said order to  show  cause,  determination  shall have  precedence over every other business of the court unless the court shall find that some other pending proceeding, having similar  statutory precedence,  shall  have  priority.  The  court may conduct a hearing at which all interested parties  shall  have  the  opportunity  to  present evidence  pertaining  to  whether  the health, safety and welfare of the residents  with  developmental  disabilities  will  be  served  by   the appointment  of  a  receiver to operate the facility. If the court shall find that  the  facts  warrant  the  granting  thereof,  then  any  such qualified  and approved agency, person or corporation, the commissioner, or any  person  designated  by  the  commissioner,  shall  be  appointed receiver  to  take  charge and assume operation of the facility, and the court shall determine a fair monthly rental for the facility  consistent with  its  usage  as  such  facility,  taking  into account all relevant factors, including the condition of such facility, which  amount  shall, except  in the case where the receiver is assuming an existing bona fide arm's length lease, not exceed the amount which would be reimbursable to the facility under the medical  assistance  program  for  real  property costs  if  each  resident  in  the  facility were a recipient of medical assistance.  Such rental shall be paid by the receiver to the  owner  or owners  of  the facility for each month that the receivership remains in effect, provided,  however,  that  nothing  contained  herein  shall  be construed  to  alter and diminish any rental obligation the operator may have under any currently valid lease.  (3) Any receiver appointed pursuant to this subdivision shall have all of the powers and duties  of  a  receiver  appointed  in  an  action  to foreclose  a  mortgage  on  real property, together with such additional powers and duties as are herein granted and imposed. The receiver  shall with all reasonable speed, but in any case, within eighteen months after the  date  on  which  the  receivership  was  ordered to provide for the orderly transfer of all persons with developmental disabilities  in  the facility  to  other  facilities  or  make  other  provisions  for  their continued safety and care. During the interim period when  such  persons with  developmental  disabilities  must  remain  in  the  facility,  the receiver may correct or eliminate those  deficiencies  in  the  facility that  seriously endanger the life, health or safety of such persons with developmental disabilities provided that such correction or  elimination of  deficiencies  does  not  include  major  alterations of the physical  structure of the facility.   The  receiver  shall,  during  this  period operate  the  facility  in  such  a  manner  as  to guarantee safety and adequate care for such  persons  with  developmental  disabilities.  The receiver  shall  have  the  power  to  let  contracts  therefor or incur expenses in accordance with the provisions of  local  laws,  ordinances, rules  and  regulations  applicable to contracts for public works except that advertisement  shall  not  be  required  for  each  such  contract. Notwithstanding  any  such  laws,  ordinances, rules or regulations, the receiver may let contracts or incur expenses  for  individual  items  of repairs, improvements or supplies without the procurement of competitive bids  where the total amount of any such individual item does not exceed five thousand dollars. Any receiver who is an official  or  employee  of the  state  of  New  York  shall  not  be required to file any bond. The receiver shall collect incoming payments from all sources and apply them to the costs incurred in the performance of  the  receiver's  functions. The  receiver  shall  honor  all  existing leases, mortgages and chattel mortgages that had previously been  undertaken  as  obligations  of  the owners  or  operators  of  the facility. However, such receiver may make application to the appointing court for recission, reformation  or  such other  relief  as  may  be  appropriate  with  respect  to the executory covenants or provisions of any contractual obligations of such owners or operators as may  be  necessary  or  appropriate  to  protect  the  best interests of the persons with developmental disabilities residing within such  facility.  No  security  interest in any real or personal property comprising the facility or contained within  the  facility,  or  in  any fixture  of the facility, shall be impaired or diminished in priority by the receiver. The receiver shall compensate the owner or owners  of  any goods  held  in  inventory for those goods which he uses or causes to be used by reimbursing the  costs  of  such  goods,  except  that  no  such compensation  shall  be  made for any such goods for which the owners or operators of the facility have  already  been  reimbursed.  Neither  the receiver  nor the office shall engage in any activity that constitutes a confiscation of property without the payment of fair compensation.  (4) The appointing court, upon application of the receiver,  may  make such  provision as justice may require for a reasonable compensation and reimbursement of the reasonable expenses of such receiver. The  receiver shall  be  liable only in the receiver's official capacity for injury to person and property by reason of conditions of the facility  in  a  case where  an  owner  would  have  been  liable;  provided that the receiver operates such facility in compliance with the terms of  the  appointment the receiver shall not have any liability in a personal capacity, except for gross negligence and intentional acts.  (5)  a.  The  court shall terminate the receivership only under any of the following circumstances:  (i) eighteen months after the date on which it was ordered;  (ii) when the office grants the facility a new operating  certificate, whether the structure of the facility or the land on which it is located shall be under the same or different ownership; or  (iii)   at  such  time  as  all  of  the  persons  with  developmental disabilities in the facility have been provided alternative  residential services.   b.  At  the  time of termination, the receiver shall render a full and complete accounting to the court and shall make disposition  of  surplus money at the direction of the court.  (6)  a.  Any  person  who  is  served  a copy of an order of the court appointing the receiver shall, upon  being  notified  of  the  name  and address  of  the  receiver,  make all payments for goods supplied by the facility, or services rendered by  the  facility,  to  the  receiver.  A  receipt  shall  be  given  for each such payment, and copies of all such receipts shall be kept on file by the receiver. The amount  so  received shall be deposited by the receiver in a special account which shall also be used for all disbursements made by the receiver.   b.  Any  person refusing or omitting to make such a payment after such service and notice may be sued therefor by  the  receiver.  Such  person shall not in such suit dispute the authority of the receiver to incur or order  such expenses, or the right of the receiver to have such payments made to him. The receipt of the receiver for any sum paid to him  shall, in  all  suits and proceedings and for every purpose, be as effectual in favor of any person holding the same as actual  payment  of  the  amount thereof  to  the owner or other person or persons who would, but for the provisions of this subdivision, have been entitled to receive the sum to be paid. No person with developmental disabilities shall be  discharged, nor  shall  any  contract  or  rights  be forfeited or impaired, nor any forfeiture or liability be incurred, by reason of any  omission  to  pay any owner, contractor or other person any sum so paid to the receiver.  (7)  Any  other  provision of this chapter notwithstanding, the office may, if it  deems  appropriate,  grant  to  any  facility  operating  or scheduled to operate under a receivership authorized by this subdivision an  operating  certificate the duration of which shall be limited to the duration of the receivership.  (8) (i) No provision contained herein shall be deemed to  relieve  the owner  or  operator  of any civil or criminal liability incurred, or any duty imposed by law, by reason of acts or  omissions  of  the  owner  or operator  prior  to the appointment of any receiver hereunder, nor shall anything  contained  herein  be  construed   to   suspend   during   the receivership  any obligation of the owner or operator for the payment of taxes or other operating and maintenance expenses of the facility nor of the owner or any other person for the payment of mortgages or liens.  (ii) The  receiver  shall  not  be  responsible  for  any  obligations incurred  by  the  owner, operator or prime lessor, if any, prior to the appointment of the receiver.  (iii) The  receiver  shall  be  entitled  to  use  for  operating  and maintenance  expenses  and  the  basic  needs  of  the  residents of the facility a portion of the revenues due the operator during the month  in which  the  receiver  is appointed which portion shall be established on the basis of  the  amounts  of  the  unpaid  operating  and  maintenance expenses for such month.  (iv)  Any  sums  determined to be due and owing by the receiver to the owner, operator  or  prime  lessor  shall  be  off-set  by  any  charges determined to be the obligations of the owner, operator or prime lessor.  (c)  (1)  Subject to paragraph two of this subdivision, and subject to the approval  of  the  director  of  the  budget,  the  commissioner  is authorized  to  make  payments  to  receivers  appointed pursuant to the provisions of subdivision (b) of this  section,  only  if  the  receiver demonstrates to the satisfaction of the commissioner that the facility's funds  which  are  available  are  insufficient  to  meet  operating and maintenance expenses  of  the  facility  and  the  basic  needs  of  the residents of the facility.  (2)  Notwithstanding any inconsistent provisions of law, payments made pursuant to this section shall be made from funds appropriated  therefor and  such payments shall be made only if a certificate of allocation and a schedule of amounts to be available therefor shall have been issued by the director of the budget and a copy of such certificate filed with the comptroller, the chairman  of  the  senate  finance  committee  and  the chairman  of the assembly ways and means committee. Such certificate may be amended from time to time by the director of the budget and a copy of  each such amendment shall be filed with the comptroller, the chairman of the senate finance committee and the chairman of the assembly  ways  and means committee.  (d)  This  section  shall  apply  only  to  the  facilities  under the jurisdiction of the office for people with  developmental  disabilities. Reference   to   the   commissioner  in  this  section  shall  mean  the commissioner of developmental disabilities.