- Connecticut commercial real estate lenders may now have a clearer path to receivership after default. A recent Superior Court decision found that carefully drafted loan language can give lenders the right to appoint a receiver under the state’s UCRERA law.
- The ruling moves away from the courts’ older multi-factor review, reducing uncertainty and limiting judicial discretion when borrowers default on commercial mortgages.
- The case highlights a critical drafting issue: Loan documents should include direct borrower consent to receivership and clear default provisions to strengthen enforcement options.
- For lenders, developers and real estate investors, the decision could reshape foreclosure strategy, risk management and loan negotiations across Connecticut commercial real estate deals.
A recent unpublished decision in the Connecticut Superior Court, M&T Bank v. 428 Hartford Turnpike Associates, LLP, Superior Court, judicial district of Tolland, Docket No. TTD-24-6028908-S (Feb. 19, 2026), entitles lenders to the right of receivership through inclusion of specified language in the loan documents. This clause stems from a statutory provision in the state of Connecticut – the Uniform Commercial Real Estate Receivership Act (UCRERA), which requires lenders to include a clear, unambiguous statement in the loan documents confirming the borrower consents to an appointment of a receiver in the event of a default. This approach strays from the prior multi-factor analysis previously undertaken by the courts, thereby leaving less room for judicial discretion when appointing a receiver and resulting in greater certainty and predictability for commercial real estate lenders in Connecticut.
UCRERA Background
The UCRERA took effect July 1, 2023. It governs when a receiver may be appointed, defines a receiver’s powers, duties and authority and sets procedures for managing, operating and selling property. UCRERA establishes a uniform statutory framework for when courts can appoint receivers, something that similarly has been adopted in many states. Prior to this decision, the courts utilized a multi-factor approach in the determination of whether to appoint a receiver, including factors such as, if the appointment is necessary for the preservation of the property, the sufficiency of the collateral in light of the secured obligations, and the borrower’s cooperation with the lender in turning over rents and proceeds post-default. In addition, the courts reviewed the express language of the loan documents governing the receivership rights.
M&T Bank v. 428 Hartford Turnpike Associates Decision
The defendant in M&T Bank v. 428 Hartford Turnpike Associates executed a mortgage and collateral assignment of rents granting the plaintiff a first mortgage on the property located at 428 Hartford Turnpike, Vernon, Conn. The mortgage document executed by the defendant contained two separate provisions providing the lender 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 lender 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 lender 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 plaintiff moved to appoint a receiver, pursuant to the terms of the loan documents. The defendant objected, based on the argument the lender had not demonstrated the property was in danger of waste, loss, dissipation or impairment, and thus the criteria under the UCRERA had not been met. In one of the first decisions interpreting the UCRERA, the court rejected the multi-factor analysis and instead found the occurrence of any one of the factors alone would entitle a lender to the right to appoint a receiver. The court also emphasized the legislative intent of the UCRERA, stating it 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 other jurisdictions that have adopted the same version of the Uniform Act and relied on case law in Nevada (a state that adopted the same uniform act contemplating a mandatory right to a receiver 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 decision represents the first statutory interpretation of the new legislation by the Connecticut judiciary and is favorable to commercial real estate lenders seeking to do business in the state. Commercial mortgage lenders in Connecticut should ensure their loan documents contain clear, unambiguous language providing for the appointment of a receiver in the context of a default and confirming the borrower consents to such appointment.
Harris Beach Murtha’s Commercial Real Estate Practice Group and Real Estate Developers Industry Team will continue tracking these and related matters. If you need assistance, please reach out to attorney Meghan A. Hayden at (203) 772-7775 and mhayden@harrisbeachmurtha.com; attorney Ashley Liberta Snyder at (203) 772-7713 and asnyder@harrisbeachmurtha.com; or the Harris Beach Murtha attorney with whom you most frequently work.
This alert does not purport to be a substitute for advice of counsel on specific matters.
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