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DEVELOPMENT RIGHTS CONSTITUTE REAL PROPERTY WHICH CAN BE SOLD PURSUANT TO RPAPL 1602 2ND DEPT.

The Second Department, in a full-fledged opinion by Justice Connolly, in a matter of first impression, determined that development rights constituted real property within the meaning of Real Property Actions and Proceedings Law (RPAPL) 1602, but that the sale of the development rights in this case would not be “expedient” and therefore would violate RPAPL 1602. Here three of four siblings wanted to sell the development rights to the family farm in order to preserve it as a farm. One of the siblings, the defendant, objected to the idea. Overruling Supreme Court, the Second Department held that development rights constitute real property which can be sold pursuant to RPAPL 1602. But, because there was no purchaser for the development rights, the plaintiffs had not demonstrated the sale was “expedient” within the meaning of the statute:

… [D]evelopment rights, as that term was understood by the parties to this action, are clearly “real property, or a part thereof” (RPAPL 1602). Indeed, the Court of Appeals has held that development rights constitute interests within the metaphorical “bundle of rights” that comprise fee interests in real property (see Seawall Assocs. v City of New York, 74 NY2d 92, 109 …). In Seawall, the Court of Appeals observed that “[t]here can be no question that the development rights which have been totally abrogated by the local law are, standing alone, valuable components of the bundle of rights’ making up their fee interests,” …  Applying the bundle-of-rights metaphor to the case at bar, by seeking court approval to convey away the right to build as many homes as are allowed by zoning and planning regulations, the plaintiffs are seeking to convey those portions of the bundle of rights comprising the maximum development capacity of the property. Moreover, in drafting RPAPL 1602, the Legislature gave courts the authority to compel the mortgage, lease, or sale of “real property, or a part thereof” … , without placing any limitations on which “parts” of the bundle of rights comprising real property are subject to the statute. “Ordinarily, where the Legislature in enacting a statute utilized general terms, and did not, either expressly or by implication, limit their operation, the court will not impose any limitation” … . Hahn v Hagar, 2017 NY Slip Op 05710, 2nd Dept 7-19-17

REAL PROPERTY (DEVELOPMENT RIGHTS CONSTITUTE REAL PROPERTY WHICH CAN BE SOLD PURSUANT TO RPAPL 1602 2ND DEPT)/DEVELOPMENT RIGHTS (REAL PROPERTY, DEVELOPMENT RIGHTS CONSTITUTE REAL PROPERTY WHICH CAN BE SOLD PURSUANT TO RPAPL 1602 2ND DEPT)

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