As every New York City real estate developer knows, obtaining RPAPL 881 access to neighboring properties to install construction safety protections required by the New York City Department of Buildings (the “DOB“) can be a convulated and expensive process. Though this may seem like a minor issue in the context of a real estate development project, promptly (and correctly) negotiating access with neighboring property owners can make the difference between a successful project and a losing one.
This is the introductory post in our series on New York City construction license agreements and New York Real Property and Proceedings Law (“RPAPL“) 881 petitions. In this first post we will discuss the general importance of obtaining RPAPL 881 access to a neighboring property and the basic logistics for doing so. In subsequent posts we will discuss the types of access needed to comply with DOB requirements, detail key terms in drafting construction license agreements, explain critical negotiation points for both developers and neighboring property owners, and provide a roadmap for a successful RPAPL 881 petition.
From a big picture perspective, here is the long and short of neighboring construction access: the New York Department of Buildings‘ (DOB) code requires certain safety protections be in place before a construction project can start. Many of those protections must be temporarily installed on adjacent (i.e. neighboring) properties. Because the installation of temporary protections on an adjacent property is an encroachment on the neighboring property, a developer must obtain either: (i) an agreement from its neighbor(s) to install the protections; or (ii) a court order granting access to its neighbor’s property.
Negotiating a construction access agreement (colloquially referred to as a “license agreement”) should be one of the first things a developer does once it closes on a new property in the City. License agreements have become a cottage industry in New York City construction, with many neighbors demanding onerous terms and delaying the process to gain leverage over the developer. The reason why is simple: every day in which a developer cannot start its project is an additional day in its construction schedule, with each additional day potentially costing thousands of dollars in carrying costs and contractors’ general conditions.
What about filing an RPAPL 881 petition to obtain a court order for access? Here is RPAPL 881:
When an owner or lessee seeks to make improvements or repairs to real property so situated that such improvements or repairs cannot be made by the owner or lessee without entering the premises of an adjoining owner or his lessee, and permission so to enter has been refused, the owner or lessee seeking to make such improvements or repairs may commence a special proceeding for a license so to enter pursuant to article four of the civil practice law and rules. The petition and affidavits, if any, shall state the facts making such entry necessary and the date or dates on which entry is sought. Such license shall be granted by the court in an appropriate case upon such terms as justice requires. The licensee shall be liable to the adjoining owner or his lessee for actual damages occurring as a result of the entry.
By its very terms, RPAPL 881 requires a developer attempt to obtain access directly from the neighbor. And if the neighbor “refuses” to grant access, before the developer is entitled to a court order. A developer is also entitled to an order if the neighbor is non-responsive, but we will cover that issue in a later post on RPAPL 881 petitions. The requirement that a developer first attempt to obtain its neighbor’s consent before filing a RPAPL 881 petition highlights the importance of starting the negotiation process as early as possible, as failing to attempt to obtain access from the neighbor can result in a denial of the petition.
If this is your first time learning about this RPAPL 881 issue, or if you have only dealt with it a few times, don’t fret. Even seasoned developers in New York City struggle with the strategy and timing of navigating 881 access to neighboring properties. Fortunately, our Real Estate Group has dealt with more license agreement negotiations and RPAPL 881 petitions than we care to count and we are here to help.
This post is the first in our series on neighboring construction access in New York City, all of which will aim to provide some insight into navigating this important and complicated process. Stay tuned for the next post in our series: negotiating and contracting for the typical safety protections required by the DOB. Stay tuned!