The Delaware limited liability company (LLC) is a popular form of business organization in the New York real estate industry. The reasons for this are probably as numerous and varied as the real estate projects in New York, but chief among them is a view that Delaware law offers more flexibility in certain key respects, including the extent to which members may contractually vary the obligations of managers.
For Delaware LLCs that own or manage New York real estate, disputes over the rights and obligations of members and managers are often litigated in the courts of New York—where the property is located, and where often the conduct at issue has occurred. Faced with such disputes, New York courts apply Delaware substantive law in determining those rights and obligations, but apply New York law to procedural matters. See, e.g., Lerner v. Prince, 119 A.D.3d 122, 127-29 (1st Dept. 2014).
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