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THE PROPERTY IS OWNED BY AN LLC; ALTHOUGH THE PARTIES TO THE PARTITION ACTION ARE EQUAL MEMBERS OF THE LLC, MEMBERS HAVE NO INTEREST IN THE SPECIFIC PROPERTY OF AN LLC; THEREFORE THE PARTITION ACTION WAS NOT AVAILABLE (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the partition action could not be maintained because the real property was owned by an LLC and not by tenants in common or a joint tenancy, despite the fact that the parties to the partition action were members of the LLC:

An action for the partition and sale of real property may be maintained by “[a] person holding and in possession of real property as joint tenant or tenant in common” (RPAPL 901[1]). The evidence submitted by the plaintiffs on their summary judgment motion established that, contrary to the allegations in the complaint, the property was owned exclusively by the LLC and not by Emerson, Kasan, and the defendant as tenants in common. Essentially, the plaintiffs contended that the three individual parties held equal membership interests in the LLC, which owned the property. “A membership interest in the limited liability company is personal property. A member has no interest in specific property of the limited liability company” (Limited Liability Company Law § 601). Thus, the individual parties hold no ownership interest in the property. Further, even assuming that the plaintiffs had established that the individual parties held equal membership interests in the LLC, there is no allegation or evidence that the LLC has been dissolved or that the LLC’s affairs have been properly wound up (see id. § 703). Accordingly, this action, inter alia, for partition and sale of the LLC’s property cannot be maintained … . 459 Wash. Ave., LLC v Atkins, 2024 NY Slip Op 04538, Second Dept 9-25-24

Practice Point: Although the partition action would have been available if the parties were joint tenants or tenants in common, it was not available because the property was owned by an LLC of which the parties were equal members. Members of an LLC have no interest in the specific property of the LLC.

 

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