(a) A receiver may not be required to honor any lease, mortgage, secured transaction or other contract entered into by the owner of a nursing home facility or residential care home if, upon application to the Superior Court, said court determines that: (1) The person seeking payment under the agreement was an owner or controlling stockholder of such facility or home or was an affiliate of such owner or controlling stockholder at the time the agreement was made; or (2) the rental, price or rate of interest required to be paid under the agreement was substantially in excess of a reasonable rental, price or rate of interest at the time the contract was entered into.

Terms Used In Connecticut General Statutes 19a-546

  • Contract: A legal written agreement that becomes binding when signed.
  • Institution: means a hospital, short-term hospital special hospice, hospice inpatient facility, residential care home, nursing home facility, home health care agency, home health aide agency, behavioral health facility, assisted living services agency, substance abuse treatment facility, outpatient surgical facility, outpatient clinic, clinical laboratory, an infirmary operated by an educational institution for the care of students enrolled in, and faculty and employees of, such institution. See Connecticut General Statutes 19a-490
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Mortgage: The written agreement pledging property to a creditor as collateral for a loan.
  • nursing home facility: means (1) any chronic and convalescent nursing home or any rest home with nursing supervision that provides nursing supervision under a medical director twenty-four hours per day, or (2) any chronic and convalescent nursing home that provides skilled nursing care under medical supervision and direction to carry out nonsurgical treatment and dietary procedures for chronic diseases, convalescent stages, acute diseases or injuries. See Connecticut General Statutes 19a-490
  • Person: means any individual, firm, partnership, corporation, limited liability company or association. See Connecticut General Statutes 19a-490

(b) If the receiver is in possession of real estate or goods subject to a lease, mortgage or security interest which the receiver is permitted to avoid under subsection (a) of this section and if the real estate or goods are necessary for the continued operation of the facility under this section, the receiver may apply to the court to set a reasonable rental, price or rate of interest to be paid by the receiver during the duration of the receivership. The court shall hold a hearing not later than fifteen days after application is made. Any known owners of the property involved shall receive notice of such application from the receiver at least ten days prior to the hearing. Payment by the receiver of the amount determined by the court to be reasonable is a defense to any action against the receiver for payment or for possession of the goods or real estate subject to the lease, security interest or mortgage involved by any person who received such notice, but the payment does not relieve the owner of the facility of any liability for the difference between the amount paid by the receiver and the amount due under such lease, security interest or mortgage involved.

(c) The provisions of this section shall not apply to a lease, mortgage, secured transaction or other contract entered into with any financial institution regulated by a state or federal agency.