NY Pub Health L § 4617 (2021)
2021 New York Laws PBH - Public Health Article 46 - Continuing Care Retirement Communities 4617 - Receiverships.

§  4617.  Receiverships.  1.  The  council  may, if it determines that serious operational deficiencies exist  or  serious  financial  problems exist  and  such  action  is desirable, enter into an agreement with the operator or owners  of  a  continuing  care  retirement  community  with respect to the appointment of a receiver to take charge of the community 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  at  such  time as either party notifies the other in writing that it wishes to terminate such receivership.   2. Upon request of the council, the commissioner shall, at the time of revocation, suspension or  temporary  suspension  of  a  certificate  of authority,  apply  to  the supreme court where the community is situated for an order directing the owner of the land and/or structure on  or  in which  the community is located, to show cause why a receiver should not be appointed to take charge of the community.  In those cases where  the certificate  of  authority  has  been  revoked, suspended or temporarily suspended, the supreme  court  shall  appoint  a  receiver  that,  where reasonably possible, is a legal entity that holds a valid certificate of authority.  Such  application  shall contain proof by affidavit that the facility has had its certificate of  authority  revoked,  suspended,  or temporarily  suspended. Such order to show cause shall be returnable not less than five days after service is completed  and  shall  provide  for personal  service of a copy thereof and the papers on which it is based, on the owner or owners of the land and/or structures on or in which  the community  is  located.  If  any  such owner and manager 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  community  in  question,  and  by sending a copy thereof by registered mail, return receipt requested, to such  owner  at  the  last address  registered by him with the department or in the absence of such registration to the address set forth in the  last  recorded  deed  with respect  to  the  facility.  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.   3. On the return of said order to show cause, the  matter  shall  have precedence over every other business of the court unless the court shall find  that  some  other  pending  proceeding, having a 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 the application. If the court shall find that the facts warrant the granting thereof, then any such qualified and approved agency, person  or  corporation,  or  the  commissioner  or  any  person designated  by  the  commissioner,  shall  be appointed receiver to take charge and assume operation of the community. However, such receiver may make application to the appointing court for  decision,  reformation  or such other relief as may be appropriate to protect the best interests of the  residents  residing  within such community. No security interest in any real or personal property comprising the community 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 or she uses or causes to be used by reimbursing  the  costs  of  such goods,  except that no such compensation shall be made for any goods for which the owners  or  operators  of  the  community  have  already  been reimbursed.   4.  Any  receiver appointed pursuant to this section 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  may  correct  or eliminate those deficiencies in the facility that seriously endanger the life, health, safety or finances of such residents subject to such terms as  the  court  may  direct. The receiver shall operate the community in such a manner as intended to assure safety and adequate  care  for  such residents.  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 honor  all  existing  leases,  mortgages  and chattel mortgages that had previously been undertaken as obligations of the owners or operators  of the community.   5.  The  appointing  court, upon application of the receiver, may make such provision as justice may require for  reasonable  compensation  and reimbursement  of  the reasonable expenses of the receiver. The receiver shall be liable only in his or  her  official  capacity  for  injury  to person  and  property by reason of conditions of the community in a case where an owner would have been liable; provided that he or she  operates such  facility  in  compliance with the terms of his or her appointment, the receiver shall not  have  any  liability  in  his  or  her  personal capacity, except for gross negligence and intentional acts.   6.  a.  The  court  shall  terminate  the  receivership only under the following circumstances:  (i) when the community is issued a new certificate  of  authority  for the community; or  (ii)  at  such time as all of the residents in the community have been provided alternate residential and health care 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 discretion of the court.   7. 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 community,  or  services  rendered  by the community, 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 such payments  made to  him.    The receipt provided by the receiver for any sum paid to him shall, in all suits and proceedings and for every other purpose,  be  as effectual  in  favor of any person holding the receipt as actual payment of the amount thereof to the operator or other  person  or  persons  who would,  but  for  the  provisions of this section, have been entitled to receive the sum to be paid. No resident 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  operator, owner, contractor, or other person any sum so paid to the receiver.   8.  Any  other  provision of this article notwithstanding, the council may, if it deems  appropriate,  grant  to  any  community  operating  or scheduled  to  operate under a receivership authorized by this section a certificate of authority, the duration of which shall be limited to  the duration of the receivership.   9.  a.  No  provision  contained herein shall be deemed to relieve the operator, owner, or manager of any civil or criminal liability incurred, or any duty imposed by law, by  reason  of  acts  or  omissions  of  the  operator,  owner,  or  manager  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 for the payment of taxes  or  other operating and maintenance expenses of the community nor of the owner or any other person for the payment of mortgages or liens.   b. The receiver shall not be responsible for any obligations  incurred by the owner, manager, or prime lessor, if any, prior to the appointment of  the  receiver, other than those obligations to residents pursuant to the continuing care retirement contracts.   c. The receiver shall be entitled to use for operating and maintenance expenses and the basic needs of the residents of the community 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.