License/Access Agreements and Professional Fees
Construction work can be found everywhere in the City—from the construction of entire buildings to Local Law 11 façade repairs to renovations and additions. In many of these circumstances, the builder needs to access a neighboring property to install sidewalk sheds or scaffolding or even just to place plywood on a neighbor’s roof to protect against possible damage. Sometimes vibration monitors must be installed. A pre-construction investigation is frequently performed to record pre-existing cracks. But one cannot simply enter upon someone else’s property without permission. That would be a trespass.
The law has anticipated this situation and created a vehicle for a developer, or another property owner, to gain temporary access to a neighboring property to facilitate its work or to protect the adjoining property. If the parties cannot work out a mutually agreeable plan for access, the developer can go to court and seek a “license” to enter upon the adjoining property under Section 881 of the Real Property and Proceedings Law (an “881 License”).
Section 881 provides that: “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.” That language does not give a whole lot of direction to the court about what conditions and payments should be in the license eventually granted.
It has become traditional for 881 Licenses to compensate the neighbor for almost all costs it might encounter as a consequence of being inconvenienced by the construction work. The logic has routinely been that the neighbor is just an innocent bystander and should not have to incur any costs on account of the developer’s project.
But there have been some distinctions made from time to time. Sometimes the court focuses on the complexity of the construction work (did the neighbor have to hire an engineer to evaluate the planned intrusion?) and the complexity of the license agreement (was the neighbor required to hire an attorney to negotiate it?). Courts have tended to impose more conditions on developers building a new building than owners simply fulfilling its façade restoration obligations under Local Law 11.
Against this background comes a case addressing work at East 101st Street. In that case, the court granted a license to the owner trying to protect the neighbor’s property so it could do remedial work (relocating a roof stair bulkhead and restoring the party wall). The court observed that the interference would be limited (60 days) and the inconvenience slight. As a result, it ordered the owner to obtain insurance against any loss or damage but did not order the owner to compensate the neighbor for its attorneys’ fees or expert’s fees. Although this broke with tradition, the Appellate Court upheld the lower court’s decision.
The takeaway is that the facts of each case must be carefully reviewed to determine “such terms as justice requires.” Neighbors should not assume that every request for temporary access entitles it to license fees, the posting of bonds, or even the reimbursement of attorneys’ fees or engineering fees.