Landmark Connecticut Superior Court Decision Holds That Appointment of Receiver Is Mandatory Under UCRERA When Loan Documents Contain Receivership Provisions

In a decision believed to be the first of its kind in Connecticut, a Connecticut Superior Court judge ruled that the Uniform Commercial Real Estate Receivership Act (UCRERA), Connecticut General Statute § 52-619 et seq., mandates the appointment of a receiver when a borrower has consented to such an appointment in the loan documents upon a default. In M&T Bank v. 428 Hartford Turnpike Associates, LLP, Docket No. TTD-CV-24-6028908-S (Conn. Super. Ct. Feb. 19, 2026), Judge Matthew T. Wax-Krell granted the lender's motion for the appointment of a receiver of rents in a commercial foreclosure action, holding that a plain reading of General Statutes § 52-624(b) leaves the court with no discretion to deny such a motion where the mortgage contains a receivership consent provision. The decision marks a significant departure from the traditional multi-factor balancing test that Connecticut courts historically applied when considering requests for the appointment of a receiver.

The case arose from a commercial mortgage loan originated in 2016, in which the defendant borrower, 428 Hartford Turnpike Associates, LLP, executed a mortgage containing two separate provisions granting the lender the right to seek appointment of a receiver upon default. One provision stated that the lender "shall be entitled to the appointment of such a receiver as a matter of right," while a second provision expressly stated that the borrower "consents to the appointment of such receiver." The lender moved for the appointment of a receiver of rents and the borrower objected, arguing that the lender had not demonstrated that the property was in danger of waste, loss, dissipation, or impairment, and that the statutory criteria under UCRERA had not been met.

Prior to Connecticut's adoption of UCRERA, which became effective on July 1, 2023, courts evaluated motions for the appointment of a receiver by weighing several factors, including whether waste or loss was occurring, the risk that the foreclosing party would recover less than the full amount of its debt, and whether the loan documents contained provisions allowing or requiring the appointment of a receiver upon default. Under that framework, the existence of a receivership clause in the loan documents was merely one factor for the court to consider in the exercise of its discretion. However, UCRERA fundamentally changed this analysis. Section 52-624(b) provides that a mortgagee "is entitled to" the appointment of a receiver if, among other alternative grounds, the mortgagor "agreed in a signed record to appointment of a receiver on default." As commentators have noted, because the statutory criteria are set forth in the alternative, the presence of any single ground will mandate the appointment.

The court's analysis rested on several grounds. First, the court held that the plain and unambiguous language of § 52-624(b) compels the conclusion that the appointment is mandatory—not discretionary—when a borrower has consented in the loan documents. The court contrasted the mandatory language of § 52-624(b), which provides that a mortgagee "is entitled to" appointment, with the permissive language of § 52-624(a), which provides that a court "may" appoint a receiver in certain circumstances, such as when a property is being subjected to waste. The court reasoned that the legislature's deliberate use of both "shall" and "may" within the same statute must be presumed to reflect an intentional distinction.

Second, the court noted that when Connecticut adopted UCRERA, it chose from two bracketed alternatives offered by the Uniform Act: one making appointment mandatory and the other leaving it to the court's discretion.  Connecticut's selection of the mandatory option reflected a deliberate legislative choice to entitle lenders to appointment when the borrower has agreed to such a provision upon default.

Finally, the court looked to other jurisdictions that have adopted UCRERA for guidance. At least thirteen states have adopted the Uniform Act, and at least four—Connecticut, Indiana, Tennessee, and Nevada—adopted the same mandatory language chosen by Connecticut. The court found persuasive the Nevada Supreme Court's decision in Federal National Mortgage Ass'n v. Westland Liberty Village, LLC, 138 Nev. 614, 515 P.3d 329 (2022), which held that when a borrower agrees to the appointment of a receiver upon default in the loan documents, the lender is entitled to such an appointment as a matter of right and the trial court has no discretion to refuse it. The Nevada Supreme Court in that case reversed a lower court's denial of a receiver motion, holding that "appointment of a receiver is not subject to the district court's discretion" where the borrower has agreed to receivership provisions.

The M&T Bank decision carries significant implications for commercial mortgage lenders and borrowers in Connecticut. For lenders, it confirms that receivership clauses in loan documents are no longer merely one factor in a discretionary balancing test but instead serve as an independent, self-executing basis for the mandatory appointment of a receiver upon default. For borrowers, the decision underscores the importance of carefully considering receivership provisions during loan negotiations, as consent to such clauses now effectively guarantees the appointment of a receiver should a default occur. As one of the first Connecticut Superior Court decisions to substantively analyze UCRERA's impact on receivership motions, M&T Bank v. 428 Hartford Turnpike Associates, LLP, is likely to be widely cited as commercial foreclosure litigation continues to develop under this relatively new statutory framework.