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Current Developments in the Commercial Divisions of the
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Posted: September 11, 2014

Air Rights Real Property That Cannot be Converted

On September 3, 2014, Justice Ramos of the New York County Commercial Division issued a decision in Harmit Realties LLC v. 835 Ave. of the Americas, L.P., 2014 NY Slip Op. 51349(U), holding that air rights were real property and thus not a permissible subject of a conversion claim.

In Harmit Realties, a dispute regarding air rights, the defendant moved to dismiss on statute of limitations grounds, arguing that notwithstanding how they were styled, the plaintiff’s claims were for conversion and for that reason were time barred. The court rejected the argument, explaining that air rights are real property, which is not subject to conversion:

Defendants move to dismiss the action on the ground that the causes of action sound in conversion and are time barred, because the statute of limitations for a conversion claim is three years which allegedly began to run from 2007.

The allegations are that the defendants misappropriated and used [the plaintiff’s] air rights in connection with the Owner Parcel. It is undisputed between the parties that air rights fall within the definition of real property. Air rights have been recognized as an inherent attribute of ownership of land.

[The plaintiff] contends that under New York law there exists no cause of action for the conversion of real property. This Court agrees since an action sounding in conversion does not lie where the property involved is real property.

Defendants cite to Sporn v MCA Records, Inc. (58 NY2d 482, 488 [1983]), for the proposition that if the plaintiff seeks to recover for amounts to the destruction or taking of the property, then the action is properly deemed one for conversion. That case concerned the unauthorized commercial exploitation of a master phonograph record which is not real property, and is inapplicable to this matter.

Defendants also rely on the case of Goulian v Gramercy 29 Apartments, Inc. (199 AD2d 98 [1st Dept 1993]), which cites Sporn (58 NY2d at 488). The court in Goulian found that plaintiff’s complaint alleging appropriation of the right to build on their roof space does not state a cause of action for trespass. The conversion claim was barred by the statute of limitations but the court did not conduct an analysis as to why the claim for trespass fails and the claim for conversion upheld. In the instant matter the complaint does not specifically state a cause of action for conversion and as such Goulian does not apply.

(Internal quotations and citations omitted) (emphasis added).

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