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HERE THE PURPORTED TRANSFER BY DEED OF AN INTEREST IN REAL PROPERTY TO A LIMITED LIABILTY COMPANY WAS NULL AND VOID FROM THE OUTSET BECAUSE THE LLC DID NOT EXIST WHEN THE DEED WAS EXECUTED; THEREFORE THE STATUTE OF LIMITATIONS FOR REFORMATION OF THE DEED NEVER STARTED RUNNING; PLAINTIFF WAS ENTITLED TO A DECLARATORY JUDGMENT THAT THE TRANSFER TO THE LLC WAS NULL AND VOID (SECOND DEPT).

The Second Department, reversing (modifying) Supreme Court, determined the action seeking a declaratory judgment that a deed is null and void should not have been dismissed as time-barred. The deed was void from the outset because the limited liability company listed as a property owner did not not exist at the time the deed was executed. Because the deed was void (re; the LLC) at the time of execution, the statute of limitations for a reformation of the deed never started running:

“‘A cause of action seeking reformation of an instrument on the ground of mistake is governed by the six-year statute of limitations pursuant to CPLR 213(6), which begins to run on the date the mistake was made'” … . Here, however, the deed, insofar as it purported to convey an interest in the property from Gold to the LLC, was void at its inception, since it is undisputed that the LLC did not exist at the time the deed was executed … . Since “a statute of limitations cannot validate what is void at its inception,” the statute of limitations cannot act as a bar to the cause of action for a judgment declaring the LLC’s purported interest in the property null and void … . J​PMorgan Chase Bank, N.A. v Katz, 2026 NY Slip Op 00359, Second Dept 1-28-26

Practice Point: A statute of limitations cannot be used to validate a purported transfer of property that was void at its inception. Here the statute of limitations for a judgment declaring a purported transfer of property by deed to an LLC which did not exist when the deed was executed should not have been invoked to bar reformation of the deed.​

 

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