The court drew a sharp line between holding a mortgage and controlling a property
If you hold a mortgage on a commercial property, are you responsible when someone slips on the sidewalk outside? A New York court says no.
The Appellate Division, Second Department, ruled on October 14, 2026, that Nissan Motor Acceptance Corporation owed no duty of care to a woman injured in a fall on a sidewalk next to a Queens commercial property. Nissan held a mortgage on the property - but it did not own it, occupy it, or control it. That distinction made all the difference.
The injured woman filed suit in March 2021, naming multiple defendants. Carol Joy Family Properties, LLC, owned the property. Nemet Motors, LLC, leased it. Nissan held the mortgage.
In May 2024, Nissan moved for summary judgment - a ruling without a full trial - arguing it had no legal obligation to maintain the property or its sidewalk. An employee submitted an affidavit stating the company “did not own, possess, or control the property” at any relevant time. The Supreme Court, Queens County, granted the motion and dismissed the claims against Nissan in October 2024.
The appellate court affirmed, unanimously.
The ruling rested on a basic principle of New York premises liability: to be liable for a dangerous condition on property, a party needs ownership, occupancy, control, or special use. No factor, no liability.
The court also spelled out the difference between a regular mortgagee and a “mortgagee in possession” - one that takes control of the property by agreement with the borrower, typically after a default, with the right to enter and collect rents. Nissan was squarely in the first camp.
The plaintiff argued the motion was premature because discovery was still open. The court was unpersuaded, noting she failed to show that further discovery could produce relevant evidence. Hoping something might turn up, the court said, is not enough.
For lenders and servicers, this is a tidy reminder of where the liability line sits. A mortgage on a property does not make you its caretaker. Unless you have crossed into possession or control - entering the property, collecting rents, managing operations - a premises liability claim against you as mortgagee has a steep hill to climb.
