Seniors Housing Weekly Update -- New Kindred-Ventas Legal Problems

May 28, 2013


 

May 28, 2013. 60 Seconds with Steve Monroe. Ventas has accused Kindred Healthcare of defaulting on four leases, of which most of the properties had already been transitioned to new operators, and is seeking a $10.56 million payment to "cure" the default.

New Kindred-Ventas Legal Problems

Is this déjà vu all over again? We recently heard that Kindred Healthcare has sued its landlord, Ventas, claiming that Ventas wrongly accused Kindred of defaulting on four leases in order to get more than $10.56 million in extra payments for fees and expenses. The $10.56 million payment to “cure” alleged defaults involves the leases on 54 properties that Kindred previously notified Ventas, well over a year ago, that it would not be renewing. Of those, 42 have already been transitioned to new operators, so the timing of this payment demand is odd. In 2006 Kindred sued Ventas over a rent hike that was tied to an agreed upon rent reset provision, where Ventas wanted a $111 million increase. The two sides settled for a $33.1 million increase. This time around the stakes are much lower, in terms of dollars, but important in terms of the perception of the landlord-tenant relationship. Did Kindred exit these properties with deferred maintenance? We don’t know. But if they did, Ventas should have known this a year ago.

 

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