State Codes and Statutes

State Codes and Statutes

Statutes > North-carolina > Chapter_131E > GS_131E-241

§ 131E‑241. Avoidance of preexisting leases, mortgages, and contracts.

(a)        A temporary manager shall not be required to honor anylease, mortgage, secured transaction, or other wholly or partially executorycontract entered into by the respondent, licensee, or administrator of the long‑termcare facility if the temporary manager demonstrates to the court that therental price, rate of interest, or other compensation to be paid under thecontract or agreement is unreasonable in light of conditions existing at thetime the agreement was entered into by the parties or in light of therelationship of the parties.

(b)        If the temporary manager is in possession of real estate orgoods subject to a lease, mortgage, security interest, or other contract thatthe temporary manager is permitted to avoid under subsection (a) of thissection, and if the real estate or goods are necessary for the continuedoperation of the long‑term care facility, the temporary manager may applyto the court to set a reasonable rental price, rate of interest, or othercompensation to be paid by the temporary manager during the duration of thetemporary management.  The court shall hold a hearing on the application within15 days after receipt of the application.  At least 10 days prior to thehearing, the temporary manager shall send notice of the application to anyknown person with any beneficial interest in the property involved.

(c)        Payment by the temporary manager of the amount determined bythe court to be reasonable is a defense to any action against the temporarymanager for payment or for possession of the goods or real estate subject tothe lease, mortgage, security interest, or other contract involved by anyperson who received such notice, but the payment does not relieve the obligeeof liability for the difference between the amount paid by the temporarymanager and the amount due under the original lease, mortgage, or securityinterest involved. (1993, c. 390, s.1.)