It all started in mid-December 2011 with a phone call from Velia Figueroa. She is the treasurer at 100 West 88th Street, a small co-op on the Upper West Side. “I heard that you were a construction lawyer,” she said. “I hope you can help us. There’s a developer doing work on a building next door to us, and he wants us to sign an access agreement. They need it right away and want to meet with us.”
An access agreement would allow the developer to come onto the co-op’s property to do work on the developer’s building that might also affect the co-op. “I don’t really understand the particulars of this,” she said to me matter-of-factly. “I just know that I need a lawyer who understands construction law, and we need to get back to the developer with a date to meet.”
That was a perfect assignment for me, so I agreed to look into it. Not long after that, I was in a cab traveling across the park to visit the co-op. It was a lovely little building – over 100 years old – that had been beautifully renovated and maintained. With a marble lobby and stairs, the immaculate building sat on a corner of the block. The rest of that area consists of the neighboring development in question, a structure to which the developer was apparently adding floors to create a new condominium. The newer building was very much under construction, and the developer’s people had an office on the site.
Before I left the office, I had talked with the board president, Carmen Burgos, and asked her to set up a meeting with the developer and his staff. I brought along a structural engineer, Jason Jia, and the two of us looked over the setup. After making a cursory inspection, I was blunt. “We cannot sign anything until you show us drawings and we understand what you are building,” I told them. I also said: “I heard something about some money being paid for access.” That comment was glossed over for the time being.
That Old Razzle-Dazzle
They then rolled out a set of drawings to explain the project to us. They were sitting and Carmen and I were standing as they waved their arms, trying to razzle-dazzle us with technical specs and pages of plans that we couldn’t possibly understand without proper review.
“This is just not going to work,” I said. “I need to have these drawings delivered to my office and to my experts’ offices, so we can have a chance to look at them in detail.” The drawings were not final or filed, and there were subsequently a few rounds of deliveries of these drawings and reviews by us.
After going over them, we learned that more needle beam scaffolds would be needed on the condo’s roof as they added floors and that access would be needed to our roof and a backyard area on the other side of the property. Their new floors would come right in the face of the back windows to the apartments. What we were especially concerned about was that, because they were building so close and because they were adding floors, the construction team would be forced to go deep into the ground, and that meant there was the danger of cracks developing. The developer was planning to build a wall in the alley between the two buildings that would replace the lot line fence between the properties and go down to the basement level. So we were very concerned about what damage it might cause to our building. If we were going to have an access agreement, it had to encompass agreements about a lot of different things, not just going on our roof. On the face of it, the developer had a right to have a certain amount of access, because he needed to put up scaffolding for everyone’s protection.
Out of the Past
Although we had this first meeting, the timing was awkward: it was December 19, and the holiday season was under way. My structural engineer had left on a two-week vacation, just as the developer started breathing down our necks to settle this agreement.
One of the main issues was the wall they wanted to build on what we asserted might be partially on our property. The developer had a copy of an old survey to back up his position that he had a right to build there, but we felt the lot line in the report was vague.
“We want an updated survey,” I said. But the developer refused to get one, citing cost and also arguing that we didn’t need one. I wound up calling the surveyor myself, and he gave me a quote of $2,800 to update it. Under pressure to go forward, the developer ultimately agreed to assume this cost. After all, how would it look: here he is building a multimillion-dollar development – without an updated lot line survey.
The survey showed us that there might be an inch or two of their new construction that would be on our property if the building was constructed as shown in the drawings. I believe that this discovery changed the dialogue between the developer and us. They now realized that they had to negotiate. This is probably the period in which we were closest to litigation: there was a period of silence that made me concerned that we might soon be in court.
Then, suddenly, we received a new set of plans to review. The developer had changed the design near the lot line and cantilevered or staged the building back.
There were several drafts of the access agreement. The first was drafted solely by the staff of the developer. When their legal counsel became more involved, the agreement became more involved. For instance, we added a requirement to have crack and vibration monitors in the co-op’s basement, which was an unusual move. Generally, the only time those protections would be put in place would be after someone had reported a crack to the Department of Buildings (DOB). Such a report would lead to a stop-work order, which would then cause the DOB to require the addition of crack and vibration monitors. It is very unusual for a developer to agree to these monitors up front and without DOB pressure. To their credit, the developer agreed to this provision.
I raised the issue of monetary compensation several times. These negotiations were costing my clients a great deal of money, and they were not the ones putting up a new building. When I asked, “Are you going to pay us any money for access rights?” the developer glossed over it. My team was not surprised by this reaction. They said, “Oh no, the developers never pay the neighbors anything in situations like this.”
Nonetheless, I thought we could do better than their initial offer – even though, at times, the negotiations got a little dicey. For instance, every time we said, “Okay, well let’s agree on these things so we don’t have problems going forward,” the developer, through their attorney, would threaten us by saying things like: “Look, if we don’t have an access agreement by such and such date, we are just going to take you to court.” Even though I did not believe that they would win in court, this threat was worrisome, since my little building couldn’t afford to be in court. Developers always know that’s the case; I had to just keep working and tough it out.
Generally speaking, the playing field is fairly uneven when you are dealing with developers because if they take you to court – even if you have great supporting documents – the expense of responding and appearing in court for multiple hearings is financially hard on little buildings such as ours.
I think we succeeded because we earned the developer’s respect. I had really good people working for me, and they knew it. I made sure that all my people were as good as or better than the developer’s. I hired people who work on comparable, large-scale projects. It is actually difficult to assemble a good team for projects like this: in a way, the developers have every engineer and architect potentially on their team because they give so much business to consultants that almost everybody has a conflict of interest. But I got lucky. I found a couple of people who were okay with helping us and had no conflicts.
As negotiations continued, and the developer saw that we weren’t budging, they started asking us what amount of money we were looking for. “What did you have in mind?” I asked. They offered a modest sum per month – it was about $2,500.
“We want real money,” I said. “Look at the amount we already spent on these experts. And we are going to need more of their time going forward.”
Sometimes, we really felt that our experts were doing work for the developer. If my expert found something wrong or questionable with the drawings, for example, the developer had a chance to fix it or change it – all thanks to my team. I pointed this out to them, and we finally agreed on a large monthly payment for the access until the project was completed, plus an additional six-figure lump sum to use toward the team’s expenses. In short, I got the developer to reimburse us for the money that had been spent on all the experts, including myself – and my client still had money “on account.”
In the end, we spent three months negotiating, and now the construction is well under way. The co-op is using some of the money it receives each month to renovate apartment lines affected by the renovation.
This process shows the importance of getting knowledgeable legal counsel involved as soon as possible. Because I specialize in construction law, I was able to assess the situation in a very short period of time, assemble the team, and quickly get working on this. There was no learning curve.
I appreciate that the building’s board members were proactive and prepared to let my team do what it needed to do. The board members knew they were taking a big financial risk. At the outset, I told them this could be big and that it could go into litigation. Their reply: “We have to take care of our building.” I appreciate their boldness. They were a really great board to work with because the members trusted their professionals and, although they were involved, they gave us a free hand. I think a lot of buildings would have said: “Oh gosh, we don’t want to spend a lot of money on this. We didn’t ask for this expense. We will just cross our fingers and hope for the best.” In the final analysis, this board came out ahead because it weighed its options and was willing to take a chance.