As every New York City real estate developer knows, obtaining access to neighboring properties to install legally mandated construction safety protections required by the New York City Department of Buildings (the “DOB“) can be a convoluted and expensive process. Though obtaining access to a neighboring property may seem like a minor issue in the context of a real estate development project, promptly (and correctly) negotiating access with neighboring property owners is sometimes the difference between a successful project and a losing one.
This is the introductory post in what will be an ongoing series on New York City construction license agreements and New York Real Property and Proceedings Law (“RPAPL“) § 881 petitions. In this first post we focus on the importance of obtaining access to a neighboring property and the basics 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, provide a roadmap for a successful RPAPL § 881 petition, and discuss potential changes to the law that would be wildly beneficial for New York City property developers.
From a big picture perspective, here is the long and short of neighboring construction access: DOB’s building code requires certain safety protections be in place on an adjacent property before a construction project can start. Many of these protections are temporary and must be installed on adjacent (i.e., neighboring) properties depending on the size and scope of the project. Because installing these temporary protections on an adjacent property encroaches on the neighboring property, a developer must first obtain either an agreement from its neighbor(s) to install the protections; or 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 determines it will be performing demolition or construction work on a property. License agreements with neighbors can be challenging as some demand onerous or impracticable terms and seek to delay 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 it thousands of dollars in carrying costs and contractors’ general conditions.
If a New York City developer cannot secure a reasonable license agreement with its neighbor (or the neighbor’s legal counsel), its only other option for obtaining access to install the legally mandated protections on the neighboring property is by commencing a special proceeding by filing a RPAPL 881 petition with the supreme court in the relevant jurisdiction. RPAPL 881 specifically requires a developer first seek to obtain access directly from the neighbor and if the neighbor “refuses” to grant access or is non-responsive, a court can issue a court-ordered license granting the developer access to the neighboring property.
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 the court denying the RPAPL 881 petition for access.
If this is your first time learning about this RPAPL 881 access to neighboring property issue, or if you have only dealt with this a few times, don’t fret. Even seasoned New York City developers struggle with the strategy and timing of navigating 881 access to neighboring properties. Fortunately, my law firm’s New York City 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.
Stay tuned for the next posts in our series!
