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  • PART I ADMINISTRATION OF THE GOVERNMENT
  • TITLE XVI PUBLIC HEALTH
  • CHAPTER 111 PUBLIC HEALTH
  • Section 72P Leases, mortgages or secured transactions; avoidance; setting of rental or interest rate; hearing; foreclosure

Section 72P. A receiver shall not be required to honor any lease, mortgage, or secured transaction entered into by the licensee of the facility if the court finds that the agreement was entered into for a fraudulent purpose or to hinder or delay creditors or that the rental, price or rate of interest required to be paid under the agreement is in excess of a reasonable rental, price or rate of interest at the time the agreement was entered into; or the agreement is unrelated to the operation of the facility.

If the receiver is in possession of real or personal property subject to a lease, mortgage or security interest which the receiver is permitted to avoid, and if the possession of said property is necessary for the continued operation of the facility the receiver shall apply to the court to set a reasonable rental, price or rate of interest to be paid by the receiver to the person entitled thereto during the duration of the receivership. The court shall hold a hearing on the application within fifteen days. The receiver shall send notice of the application to any owners of record and to mortgagees and other secured parties and lienholders of record of the property involved at least ten days prior to the hearing. In no event shall the amount set by the court exceed what is reasonable for the facility in light of the usual regulations of the center for health information and analysis and the private census of the facility. Payment by the receiver of the amount determined by the court to be reasonable shall be a defense to any action against the receiver for payment or for the possession of said property subject to the lease, mortgages or security interest involved by any person who received such notice.

Notwithstanding the foregoing, there shall be no foreclosure or eviction during the receivership period where such foreclosure or eviction would, in the view of the court, serve to defeat the purpose of the receivership.