In connection with the issuance of any title insurance commitment or policy covering land upon which is built a hospital, medical facility, health research facility, teaching facility for health related fields, facility for individuals with intellectual disabilities, medical or nursing school, it is necessary to determine if the holding institution has been the recipient of funds arising from any grant, loan, or guarantee under any of the following public laws:
All of the above statutes recognize, in one form or another and during certain prescribed conditions, the right of the United States to recover from the owner, a transferor, or a transferee of the facility, the funds advanced pursuant to statutory provisions.
The conditions for the recovery may relate to:
The right of the United States is limited to the recovery of a sum of money from the owner, transferor, or transferee of the real estate; however, it does not constitute a lien of the facility prior to the entering of a judgment.
Title 42 U.S.C.A. sections 291(i) and 6004 specifically state that "the right of recovery shall not constitute a lien prior to judgment." The other acts are silent on whether the right of recovery constitutes a lien.
Notwithstanding the above, any advance of funds made under any of these acts, although not creating a lien, does seem to impose either a covenant running with the land or a restriction on the alienation of the facility.
Consequently, unless the Company is furnished with satisfactory proof prior to closing that no funds have ever been advanced under any of these acts, any title insurance policy when issued must contain an appropriate exception in regard to the "right of recovery of the United States."
For more information, please see http://www.hrsa.gov/gethealthcare/affordable/hillburton/facilities.html on the Internet.