2023 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certificate  of  authority  has  been  revoked, suspended or temporarily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.