April 29, 1999
A judge may be a limited partner in a real estate development project.
22 NYCRR 100.4(D)(2) and (3);
Opinions 89-108 (Vol. IV); 89-130 (Vol. IV); 99-12.
A full-time judge inquires whether it is permissible to participate as a limited partner or investor in a development project to construct office and retail space in a former supermarket plaza. The judge would have no direct participation in the management or operation of the developed property. Day-to-day affairs would be handled by a professional management company. The ownership would be in the form of a L.L.C, limited partnership, or subchapter S corporation. The judge would not be an officer in the ownership entity.
The Rules Governing Judicial Conduct allow a judge to hold and manage personal and family investments, including real estate. 22 NYCRR 100.4(D)(2). The Rules also prohibit a full-time judge from serving as an officer, director, general partner, advisor, employee or other active participant in any business entity, but do not prohibit a judge from being a limited partner in a business entity. 22 NYCRR 100.4(D)(3).
This Committee has previously advised that a judge may be a limited partner in a for-profit, real estate enterprise as long as the judge does not take an active role in the management or control of the business of the limited partnership. Opinions 89-108 (Vol. IV); 89-130 (Vol. IV); 99-12. Accordingly, the Committee concludes that the inquiring judge may be a limited partner in the described enterprise.