NY Pub Health L § 2810 (2021)
2021 New York Laws PBH - Public Health Article 28 - Hospitals 2810 - Residential Health Care Facilities; Receivership.

§  2810.  Residential  health  care facilities; receivership. 1.   The owner or owners of any residential health care facility may at any  time request  the  department  to take over the operation of such facility by the appointment of a  receiver.  Upon  receiving  such  a  request,  the department  may,  if  it  deems  such  action  desirable,  enter into an agreement with any such owners on the appointment of a receiver to  take charge  of  the  facility  under  whatever  conditions as shall be found acceptable by both parties. Receivership commenced  in  accordance  with the  provisions  of  this subdivision shall terminate at such time as is agreed upon by the parties, or at such time as either party notifies the other in writing that he wishes to terminate such receivership.   2. a. As a means of protecting the health, safety and welfare  of  the patients   in   a   residential   health  care  facility,  whenever  the commissioner revokes the operating certificate of  such  a  facility  he shall  apply  to  the  supreme court in the county where the facility is situated for an order directing the owner of the land  and/or  structure on  or  in  which  the  facility  is  located  to  show  cause  why  the commissioner, or his designee, should not be appointed receiver to  take charge of the facility. In those cases where operating certificates have been  revoked  pursuant  to paragraph (a) of subdivision five of section twenty-eight hundred six of this chapter the supreme court shall appoint a receiver who may be the commissioner or his designee. Such application shall contain proof by affidavit that the facility has had its operating certificate revoked. 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 structure on or in which the facility is located.  If any such owner 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 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 such 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.   b. 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 the application. If the court shall find that the facts warrant the granting thereof, then the commissioner, or any person designated  by  the  commissioner,  shall  be appointed receiver to take charge of the facility, and the court shall  determine  a  fair  monthly rental  for  the  facility,  and for the furniture, fixtures and movable equipment therein, taking into account all relevant  factors,  including the  condition  of  such  facility, and the condition of such furniture, fixtures and movable equipment, 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 and for the costs of furniture, fixtures and movable equipment  if  each  patient  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 and  to  the  owner or owners of the furniture, fixtures and movable equipment therein for each month that the receivership remains in effect.   c.  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 provide for the orderly transfer of all patients in the facility to  other  facilities  or  make other provisions for their continued safety and health care.  During the interim  period  when  such  patients  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 patients provided that such correction or elimination of  deficiencies  does  not include  major alterations of the physical structure of the facility. He shall, during this period, operate the facility in such a manner  as  to guarantee  safety  and adequate health care for such patients.  He shall have the power to let contracts therefor or incur expenses provided that where individual items of repairs, improvements or supplies exceed three thousand dollars, the receiver shall obtain  price  quotations  from  at least  three  reputable  sources.  The receiver shall not be required to file any bond. He shall collect incoming payments from all  sources  and apply  them to the costs incurred in the performance of his functions as receiver.  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.   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 department shall engage in any activity that constitutes a confiscation of property without the payment of fair compensation.   d. The receiver shall be entitled to the same  fees,  commissions  and necessary  expenses  as receivers in actions to foreclose mortgages. The receiver shall be liable only in his 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; he shall not have  any  liability in  his  personal  capacity, except for gross negligence and intentional acts. The personnel and facilities of the department shall be  available to  the receiver for the purposes of carrying out his duties as receiver and the cost of such services shall be deemed a necessary expense of the receiver.   e. (i) The court shall terminate the receivership only  under  any  of the following circumstances:  (a) eighteen months after the date on which it was ordered;  (b)   when   the  department  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  (c)  at  such  time  as  all of the patients in the facility have been provided alternative modes of health care, either in another facility or otherwise.  (ii) 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.    f. (i) 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.  (ii) 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 so paid.  No  patient 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.   g. Any other provision of this chapter notwithstanding, the department 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.   h. No provision contained herein shall be deemed to relieve the  owner or  any other person of any civil or criminal liability incurred, or any duty imposed by law, by reason of acts or omissions of the owner or  any other  person  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 any other person 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.   * 3. The commissioner  is  authorized  to  make  non-interest  bearing payments  to  receivers  appointed  pursuant  to this section within the amounts made available therefor by  the  legislature.  No  such  payment shall  be  made  unless  the  commissioner  reasonably  anticipates that repayment  shall  be  made  prior  to  or  upon   termination   of   the receivership. Any such payment to a receiver shall be made pursuant to a repayment  agreement  entered into by the receiver with the commissioner which shall specify a time within which full  repayment  must  be  made. Repayments by receivers shall be applied to reimburse any first instance appropriation made for the purposes of this subdivision.   * NB (Effective pending Federal Law)