May a Tenant File a Notice of Pendency?
Dani Schwartz writes: There is presently a putative split between the First and Second Departments as to whether a tenant in a leasehold dispute lacking interest in title to real property may properly file a notice of pendency. The author explores the statutory history and case law to address the question of whether a tenant may do so.
June 29, 2017 at 12:00 AM
19 minute read
A notice of pendency is a publicly filed document that gives notice to the world that an action is pending involving a dispute over some right, title, or interest in or to a parcel of real property. Specifically, CPLR 6501 permits the filing of a notice of pendency in any action “in which the judgment demanded would affect the title to, or the possession, use or enjoyment of, real property, except in a summary proceeding brought to recover the possession of real property.” Once recorded, a notice of pendency clouds the marketability of title of the affected property for the duration of the underlying lawsuit, or until it is discharged.
For decades, courts have issued conflicting decisions on whether a tenant may file a notice of pendency in a landlord/tenant leasehold dispute. At first glance, such a dispute can involve “possession, use or enjoyment of, real property.” Yet, courts have long held that a lease is considered personalty, not real property (see, e.g., Matter of Grumman Aircraft Eng'g v. Bd. of Assessors of Town of Riverhead, 2 N.Y.2d 500, 507 (1957)), which would take lease disputes out of the statute's ambit. Despite seemingly settled precedent on this point, the Appellate Division, First Department (Lawlor v. 543 Second Ave., 49 A.D.3d 449 (1st Dept. 2008); Casanas v. Carlei Group, 105 A.D.3d 570 (1st Dept. 2013)) and Second Department (Robert Fiance Hair Design Inst. v. Concourse Props. Co., 130 A.D.2d 564 (2d Dept. 1987)) have upheld notices of pendency filed in lease disputes based on the statute's language regarding “possession, use or enjoyment of, real property” where the underlying “real property” at issue was the space leased by a landlord to a tenant.
But in PK Rest. v. Lifshutz, 138 A.D.3d 434, 439 (1st Dept. 2016), an important recent decision that has generated surprisingly little discussion, the First Department appears to have disavowed a prior line of cases and clarified that, absent extremely unusual circumstances, a notice of pendency filed by a possessory leaseholder lacking any interest in title to real property is not “viable,” and may be sanctionable.
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