In Akasa Holdings, LLC v. 214 Lafayette House, LLC (71 N.Y.S. 3d 57), a case decided by the Supreme Court, New York County, properties were benefitted and burdened by an easement contained in a Declaration of Easements recorded by the common owner in 1981 when the parcels were all part of tax lot 30. One of the easements burdened land owned by the Plaintiff, which land, since 1984 when tax lot 30 was subdivided, has been identified on the tax records as tax lot 9. The Declaration, indexed against tax lot 30 when recorded, was not separately indexed against tax lot 9 until the Defendant, the owner of the parcel benefitted by the easement, recorded the Declaration against tax lot 9 in 2014. The Plaintiff purchased tax lot 9 in 2011.
The Plaintiff alleged that it did not have actual or constructive notice of the Declaration when it purchased tax lot 9; it claimed that the recording of the Declaration against tax lot 9 in 2014 was “’egregious and unlawful misconduct’ that has substantially damaged the value of its property”. It sought damages for trespass and for the diminution of the value of its property, and a ruling holding that the easement was not effective as to tax lot 9. The Supreme Court, New York County, granted the Defendant’s motion to dismiss the complaint, holding that a search of the Plaintiff’s chain of title would have revealed the Declaration. According to the Court, “[t]he nonfeasance of the Register, in failing to properly include the Declaration on its records in connection with the new Lot 9 at the time of the subdivision, constitutes a ministerial error that did not void the 1981 recording…”
The Appellate Division, First Department, affirmed, as modified on the law, the Order of the Supreme Court, holding that the Plaintiff acquired tax lot 9 with constructive notice of the easement. According to the Appellate Division,
“[i]t would appear that, under [the title search industry’s 40-year search standard], a prospective purchaser faced with the above-described results of a title search limited to Lot 9 in March 2011 would be compelled to expand the search beyond Lot 9 to complete a chain of title for 57 Crosby [tax lot 9] that went back 40 years…Accordingly, plaintiff ‘is chargeable, as a matter of law, with notice of [the 1981 easement as one] of the facts which a proper inquiry would have disclosed [citation omitted]’…[P]laintiff does not identify any statute, regulation or rule that would require a previously recorded instrument be re-indexed either upon the subdivision of a lot into two or more smaller lots (as was effected with respect to Lot 30 in 1984) or upon the merger of two or more lots into one lot (as was effected with respect to Lot 9 and Lot 30 at some point in the 1970s).”
Akasa Holdings, LLC v. 214 Lafayette House, LLC, 2019 NY Slip Op 06447, decided September 3, 2019, is posted at
http://www.nycourts.gov/reporter/3dseries/2019/2019_06447.htm.
