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License and Access Agreements

Access agreements, sometimes known as licensing agreements, are what co-op and condo boards enter into when the developer of a neighboring building needs to do some construction work that involves coming onto their property. 

This can happen in several different ways. Your building might get a letter from an attorney for the developer saying, “We’re going to be doing work, and we need to have access.” Or someone may walk across the back yard and say, “We’re over there, and we plan to be doing some work involving your property.” 

Boards can’t ignore such overtures because the developer is on a path to get his project done. If you won’t allow him access under negotiated terms, he can start what’s called a Section 881 hearing under the Real Property Actions and Proceedings Law, which allows the developer to take your building into court and compel your cooperation under reasonable conditions, which would be discussed with a judge instead of just between the two parties. 

The relationship with the developer is a delicate dance. You want to try to get along, but you’re not really friends. You’re not happy about this happening, but you want to come to terms with the situation so you don’t wind up in one of those hearings.

The developer is going to want to do a pre-construction survey of your building. It’s analogous to having an apartment alteration agreement. In those, you’ve got a neighbor on your floor who’s going to be doing a renovation, so you take some pictures of your apartment to document its condition before the neighbor starts work. It’s a similar situation in giving access to a developer. He wants to come into your building or your basement or onto your roof and document what it looks like so that no one can say later on that the developer caused some damage.

The developer might need to put up sidewalk sheds or cover windows or go into different parts of your building. Those are the kinds of things that you negotiate. What will the developer pay you to have the kind of access he wants? That’s where the dance gets truly delicate.

You should end up with a set of written agreements. One will be a preconstruction survey agreement. That’s where you require a certificate of insurance, set the time and date of the work, and get a copy of an engineer’s report. Any protections are discussed in the full agreement. There can be a lot of back and forth about these things. 

It’s not like there’s a menu of prices the developer should be paying for different things. In other words, you can’t just say, “How much is the going rate for using our sidewalk?” However, there has been enough construction over the last few years that many court cases have come out of it, so you can look at cases to see what the courts said about those things, and that kind of sets the bar in terms of what a developer might be willing to offer. The counter to that is that developers do not want to get involved in litigation with you because you’re holding up their project. That’s where compromises are made on both sides. 

You want to avoid litigation, if possible. If you go to court, you have the same kind of negotiations, but with a judge looking over what you’re all saying to each other. So you have to think, is it really worth it to have to do that? Sometimes there are genuine reasons why you have no choice but to go to court. 

When people do work out an agreement and sign it, that’s usually the point at which the developer will reimburse you for a lot of the expenses. The thing that you need to be careful about is that the developer is going to want you to agree to everything by signing this agreement even if a few things are left dangling. In other words, the developer’s saying you agree that he can do this, and he’ll give you 48 hours notice and the draft of the plans before he does it. That’s a little nerve-wracking because you’ve already given permission, but you haven’t exactly seen or agreed to these plans. 

It’s really important to have an attorney involved. I’ve seen situations where boards didn’t want to spend the money on an attorney; they wanted to go it on their own. In the end, it’s a lot to deal with if you’re a layperson. 

 

C. Jaye Berger is the principal at Law Offices C. Jaye Berger.

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