Does An Assignee of Leases and Rents Given As Security for a Debt Have Any Standing ?
In Suderov v. Ogle (149 Misc 2d 906, 908 ), the Appellate Term, Second Department, concluded that "the issue of whether an assignee of a lease generally may maintain a summary proceeding is far from settled".
The Appellate Term there observed that "it was formerly the law that where the instrument of assignment gave an assignee of rents a right of possession the assignee could maintain a summary proceeding," but held that "this is no longer the law." (Supra, at 908.)
The Appellate Term concluded that the Legislature's 1997 deletion from RPAPL 721 of the provision authorizing assignees of a landlord to maintain summary proceedings deprived assignees of rents, even with the right of possession, of the right to maintain summary proceedings.
The Appellate Term's specific holding was that an assignee of leases and rents given as security for a debt had no standing, as the assignor-debtor still held the primary interest, and the assignee was therefore acting as the assignor's "agent":
"When a lease is assigned as security for a mortgage, no matter what language is used in the instrument of assignment, no transfer of title to the lease can be effected ...
Inasmuch as title is not transferred, the assignment is no more than an assignment of rents and the assignee's right to possession, if any, is only as an agent of the owner.