---
kind: "section"
citation: "42 C.F.R. § 489.18"
title: "42"
number: "489.18"
heading: "Change of ownership or leasing: Effect on provider agreement."
url: "https://uscodex.org/cfr/42/489.18"
---

# §489.18. Change of ownership or leasing: Effect on provider agreement.

- (a) **What constitutes change of ownership—**
  - (1) **Partnership.** In the case of a partnership, the removal, addition, or substitution of a partner, unless the partners expressly agree otherwise, as permitted by applicable State law, constitutes change of ownership.
  - (2) **Unincorporated sole proprietorship.** Transfer of title and property to another party constitutes change of ownership.
  - (3) **Corporation.** The merger of the provider corporation into another corporation, or the consolidation of two or more corporations, resulting in the creation of a new corporation constitutes change of ownership. Transfer of corporate stock or the merger of another corporation into the provider corporation does not constitute change of ownership.
  - (4) **Leasing.** The lease of all or part of a provider facility constitutes change of ownership of the leased portion.
- (b) **Notice to CMS.** A provider who is contemplating or negotiating a change of ownership must notify CMS.
- (c) **Assignment of agreement.** When there is a change of ownership as specified in [paragraph (a)](#a) of this section, the existing provider agreement will automatically be assigned to the new owner.
- (d) **Conditions that apply to assigned agreements.** An assigned agreement is subject to all applicable statutes and regulations and to the terms and conditions under which it was originally issued including, but not limited to, the following:
  - (1) **Any existing plan of correction.**
  - (2) **Compliance with applicable health and safety standards.**
  - (3) Compliance with the ownership and financial interest disclosure requirements of [part 420](/cfr/42/part420.md), [subpart C](/cfr/42/subpartC.md), of this chapter.
  - (4) **Compliance with civil rights requirements set forth in 45 CFR parts 80, 84, and 90.**
- (e) **Effect of leasing.** The provider agreement will be assigned to the lessee only to the extent of the leased portion of the facility.

## Notes

### Amendments

[45 FR 22937, Apr. 4, 1980, as amended at 59 FR 56251, Nov. 10, 1994]

### Authority

Authority: 42 U.S.C. 1302, 1395i-3, 1395x, 1395aa(m), 1395cc, 1395ff, and 1395hh.

### Source

Source: 45 FR 22937, Apr. 4, 1980, unless otherwise noted.

### Amendments

[45 FR 22937, Apr. 4, 1980, as amended at 59 FR 56251, Nov. 10, 1994]