Article courtesy of Paige Forcier and Eleanor Shlonsky (Morgan Lewis)
M&T Bank v. 428 Hartford Tpk. Assocs., LLP, No. TTD-CV-24-6028908-S, 2026 WL 508788 (Conn. Super. Ct. Feb. 19, 2026).
In 2016, 428 Hartford Turnpike Associates, LLP (the “Borrower”) entered into a mortgage note in favor of United Bank, secured pursuant to (1) a mortgage granting a first priority lien on real property of the Borrower and (2) a collateral assignment with respect to all rents, issues and profits of such property. Following several mergers, the current plaintiff, M&T Bank (the “Secured Party”), became the holder and owner of the note, the mortgage, the collateral assignment and all associated loan documents.
The mortgage signed by the Borrower in favor of the Secured Party contained two separate provisions providing the Secured Party the right to seek appointment of a receiver upon a default. One provision stated that in a foreclosure or upon a default by the Borrower, the Secured Party may “apply for the appointment of a receiver of the rents and profits … and shall be entitled to the appointment of such a receiver as a matter of right.” In another provision, the Mortgage states that upon an event of default, the Secured Party may apply for the appointment of a receiver of rents and that the Borrower “consents to the appointment of such receiver.”
A default occurred under the loan documents and the Secured Party moved to appoint a receiver pursuant to the terms of the loan documents. The Borrower objected, arguing that the Secured Party had not demonstrated that the property was in danger of waste, loss, dissipation, or impairment, and therefore the statutory criteria under the UCRERA had not been met.
In considering the Borrower’s objection, the Connecticut Superior Court (the “Court”) interpreted the UCRERA, which became effective in Connecticut on July 1, 2023. Prior to that, the existence of an agreement in a loan document for the appointment of a receiver was just one factor for the court to consider when evaluating receivership motions. But the adoption of the UCRERA changed the analysis. Rather than administering a test with multiple factors and criteria (as the Borrower seemed to suggest was necessary), the UCRERA provides six circumstances, the occurrence of any one of which alone entitles a secured party the right to appoint a receiver. One such circumstance is if the mortgagor agrees in a signed record to the appointment of a receiver on default. (Conn. Gen. Stat. § 52-624(b)).
The Court granted the Secured Party’s receivership motion, noting that the plain and unambiguous language of the statute does not provide it with any discretion when a mortgagor agreed in a signed record to the appointment of a receiver upon default. In applying the statute, the Court contrasted Section 52-624(b) of the UCRERA with clause (a) of the same section, which provides a separate and distinct set of circumstances when a court may appoint a receiver, such as when a property is subject to waste. The Court also emphasized the apparent legislative intent, citing the fact that the Uniform Act provides two bracketed alternatives (one making appointment mandatory in certain circumstances and the other leaving it to the court’s discretion in all circumstances) and the Connecticut legislature adopted the version providing for a mandatory right to appoint a receiver. The Court also looked to guidance from case law in other jurisdictions that have adopted the same version of the Uniform Act and pointed to case law in Nevada (another state that adopted the Uniform Act contemplating a mandatory right to an appointment in certain circumstances) where an appellate court overturned a lower court’s denial of a receivership motion when the parties agreed to receivership provisions in the relevant loan documents.
This landmark decision interpreting the UCRERA in Connecticut – which is considered the first of its kind – has significant implications for secured borrowers and lenders in Connecticut, confirming the importance of carefully considering the inclusion of receivership provisions in loan documents.
