New York Codes, Rules and Regulations › Title 18 - DEPARTMENT OF SOCIAL SERVICES › Chapter II - Regulations of the Department of Social Services › Subchapter D - Adult-Care Facilities › Part 491 - Shelters For Adults › Section 491.27 - Receivership

Current through Register Vol. 46, No. 28, July 10, 2024
(a)
Receiver appointed upon application of the office.
(1) When the office revokes or temporarily
		    suspends the operating certificate of a shelter for adults, a small-capacity
		    shelter or a shelter for adult families and determines that appointment of a
		    receiver is necessary to protect the health, safety and welfare of the
		    residents of a facility, the office may seek the appointment of a receiver by
		    applying to the Supreme Court in the county where the facility is situated for
		    an order directing the operators, owners and prime lessors, if any, of the
		    premises to show cause why the office or the office's designee should not be
		    appointed receiver to take charge of the facility.
(2) The office shall not be required to seek
		    the appointment of a receiver or to assume the responsibilities of a receiver
		    directly or indirectly through its designee; nor shall any court be authorized
		    to compel the office to assume the responsibilities of a receiver or to appoint
		    a designee to assume such responsibilities.
(3) The office may, if it deems appropriate,
		    grant an operating certificate to any facility operating or scheduled to
		    operate under a receiver. The duration of the operating certificate shall not
		    exceed the duration of the receivership.
(4) Any receiver appointed upon application
		    of the office shall have all of the powers and duties of a receiver appointed
		    in an action to foreclose a mortgage on real property, together with the
		    following additional powers and duties:
(i)
		    The receiver shall, with all reasonable speed but, in any case, within six
		    months after the date on which the receivership was ordered, unless otherwise
		    extended by the court, provide for the orderly transfer of all residents in the
		    facility to other facilities or make other provisions for their continued
		    safety and care.
(ii) The receiver
		    shall operate the facility in compliance with regulations of the
		    office.
(iii) The receiver, with
		    the approval of the office, shall incur expenses as may be necessary to operate
		    the facility. The receiver shall collect incoming payments from all sources and
		    apply them to the costs incurred in the performance of their functions as
		    receiver. The receiver shall honor all existing leases, mortgages and chattel
		    mortgages that have 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 by the receiver. The
		    receiver shall compensate the owners of any goods held in inventory for those
		    goods which they use or cause to be used by reimbursing the costs of such
		    goods, except that no such compensation shall be made for any such goods for
		    which owners have already been reimbursed.
(iv) The receiver shall not be required to
		    file any bond.
(5)
		    Notwithstanding paragraph (4) of this subdivision and, except in the case where
		    the receiver is assuming an existing bona fide arm's-length lease, the office
		    shall determine a reasonable monthly rental for the facility, based on
		    consideration of all appropriate factors, including the condition of such
		    facility. The rent, as determined by the office, shall be paid by the receiver
		    to the owners or prime lessors as may be directed by the court for each month
		    that the receivership remains in effect. In the event that the amount
		    established by the office is less than the currently valid lease, the
		    obligation of the operator shall not be altered or diminished.
(6) The receiver:
(i) shall be entitled to a fee and
		    reimbursement for expenses as determined by the office, based upon
		    consideration of all appropriate factors relating to the operation of the
		    facility, to be paid as a charge against the operator, not to exceed the fees,
		    commissions and necessary expenses authorized to be paid to receivers in an
		    action to foreclose a mortgage;
(ii) shall be liable only in an official
		    capacity for injury to person and property by reason of conditions of the
		    facility in a case where an owner or operator would have been liable; the
		    receiver shall not have any liability in a personal capacity, except for gross
		    negligence and intentional acts;
(iii) may, subject to approval by the office,
		    ratify any collective bargaining agreement in effect between the operator and
		    the employees of a facility, or suspend such collective bargaining agreement;
		    provided, however, that the receiver, in an official capacity, remains liable
		    for payment of wages and salaries at the rates and levels in effect at the time
		    of their appointment; and
(iv)
		    shall notify the office of any lien or conveyance made in contemplation of
		    receivership with an intent to remove an asset of the facility from the
		    jurisdiction and use of the receiver, or to hinder or delay the receiver in the
		    execution of their duties and responsibilities as receiver.
(7)
(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 who refuses or omits to make such 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 for any such payments made to him or her. The receipt of
		    the receiver for any sum paid to them shall, in all suits and proceedings and
		    for every purpose, be as effectual in favor of any person holding the same as
		    actual payment who would have been entitled to receive the sum so paid. No
		    resident shall be discharged, nor shall any contract of 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.
(8) All
		    transactions involving the receivership shall be on the accrual basis of
		    accounting.
(9) Obligations of the
		    operators, owners or prime lessors.
(i) The
		    operators, owners or prime lessors shall not be relieved of any civil or
		    criminal liability or obligation incurred, or any duty imposed by law, by
		    reason of acts or omissions of such persons prior to the appointment of any
		    receiver. During the period a facility is operated by a receiver, the operator,
		    owner or prime lessor, if any, shall continue to be liable for all obligations
		    for the payment of taxes or other operating and maintenance expenses of the
		    facility, and the owner or other appropriate person shall continue to be liable
		    for the payment of mortgages or liens.
(ii) Expenses incurred by a receiver to meet
		    the operating and maintenance expenses of the facility and the basic needs of
		    the residents of the facility shall be deemed the obligations of the operator,
		    and not the obligations of the receiver, the office or the State.
(iii) 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.
(iv) The receiver shall be entitled to use
		    for operating and maintenance expenses, and for 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. This portion shall be established
		    on the basis of the amounts of the operating and maintenance expenses for such
		    month. Such amounts shall be prorated by dividing the number of days of the
		    receivership appointment by the number of days in the month.
(v) Any sums determined to be due and owing
		    by the receiver to the owner, operator or prime lessor shall be offset by any
		    charges determined to be the obligations of the owner, operator or prime
		    lessor.
(10) The court
		    shall terminate the receivership only under any of the following circumstances:
(i) six months after the date on which it was
		    ordered, except that the court may extend such period for good cause
		    shown;
(ii) when the office grants
		    an operator a new operating certificate; or
(iii) at such time as all of the residents in
		    the facility have been provided alternative modes of care, either in another
		    facility or otherwise.
(11) At the time of termination of the
		    receivership, the receiver shall render a full and complete accounting to the
		    court and shall dispose of any profit or surplus as instructed by the
		    court.
(12) Payments to receivers
		    appointed upon application of the office.
(i)
		    The office is authorized to make payments to a receiver only if the receiver
		    demonstrates to the satisfaction of the office 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.
(ii) The operator shall be liable for all
		    monies made available to the receiver pursuant to this paragraph.
(iii) Any payments made by the office to a
		    receiver shall be made without any obligation on the part of the social
		    services district, in which the receiver-operated facility is located, to
		    reimburse the office for any such payments.