The New York Civil Court recently issued a ruling that could affect how landlords serve limited liability companies in rent nonpayment summary proceedings. The decision, issued by Judge Allison Greenfield, dismissed a lawsuit after finding that the landlord improperly served an LLC tenant by leaving papers with an employee rather than serving a manager or member of the company.
Because the statute governing service of process in summary proceedings, Real Property Actions and Proceedings Law § 735, references service on corporations and certain other entities but omits LLCs, Judge Greenfield concluded that service on LLCs must follow the more demanding requirements of either the Civil Practice Law and Rules § 311-a or Article III of the Limited Liability Company Law.
Braverman Greenspun partner Mitchell Zingman spoke with amNewYork about this decision, describing it as unusual. Mitchell noted that landlords and courts have long treated LLCs similarly to other business entities, including corporations, for service purposes, and he has never seen this defense raised despite decades of litigating rent nonpayment matters.
Mitchell cautioned that if the ruling is adopted more broadly, landlords will need to adapt their practices. He noted, “If it were to be accepted [as precedent], and if it goes beyond New York County, landlords have to start thinking, for planning purposes, when they’re leasing space, that they really know who managers or members are of the limited liability company and where they’re going to be. Or…insist that [tenants] appoint an agent to accept service or process who you know you can get to.”
Read the full article here.