Rose Horowitz in Bricks & Bucks on February 20, 2019
About three years ago, the board at a 35-unit co-op on the Upper West Side received a routine request from a neighbor. The building next door needed to do some repair work, and crews needed access to the co-op’s property – specifically, they needed to extend their scaffold about 10 feet in front of the co-op’s facade.
This board did the right thing. While negotiating an access agreement (also called a licensing agreement) with the neighbor’s contractor, the board set a date by which the work was to be finished. More importantly, it set a fine of $100 for every day the work ran beyond the deadline.
Fast forward to today. The deadline passed more than 15 months ago, and the scaffold is still up in front of the co-op’s facade. But thanks to the access agreement, this unpleasant development has a somewhat tarnished silver lining: the co-op has taken in more than $40,000 in fines from its next-door neighbor. The licensing agreement also specifies that the developer has to pay the co-op’s legal fees arising from non-compliance with the agreement, according to a board member who asked not to be identified because negotiations are continuing.
When the neighbors came knocking, the first smart move this co-op board made was to summon its attorney. “Don’t just sign these things without having an attorney look at it,” advises C. Jaye Berger, principal in Law Offices C. Jaye Berger, a co-op and condo attorney who frequently negotiates licensing agreements but is not involved with the Upper West Side co-op.
How does a board arrive at fees for access in a licensing agreement? “We negotiate, and sometimes we look at cases that establish precedents,” Berger says. With the explosion of construction and development in New York City in the last decade, she adds, case law has been developing regarding access to adjoining property during construction. “If you are a good negotiator, you will try to get a defined date for how long the privilege will be granted.”
The construction undertaken by a neighboring developer might be extensive, requiring access to your building’s lobby, basement, roof, and terraces. “It’s usually not just a facade,” Berger says, “and the developer will say, ‘I need to come through your lobby, and I’m going to pay you x amount to do a variety of things.’”
Licensing or access agreements usually consist of two facets: a pre-construction survey, which records what the building, basement, roof, and other areas look like before work on an adjacent property begins; and the general agreement. Berger prefers to negotiate the pact in two parts. Once the preliminary arrangement is concluded, she proceeds to work out the details: “I like to spend more time on the nitty-gritty of the general agreement.”
The general licensing agreement might address such issues as minimizing access and intrusion, defining the period of time for access, and establishing what happens if the period must be extended. The agreement may also include what compensation, including legal or other fees, may be incurred for the privilege of gaining access. Other issues may include how work will be monitored, insurance against potential damage or injury, and security and privacy concerns.
The “over-my-dead body” response to a developer’s request for access is not really an option for co-op and condo boards because the law favors developers seeking to complete approved projects. When a developer’s request has been refused, the developer can begin a special proceeding for a license to enter the building under Section 881 of New York’s Real Property Actions and Proceedings Law.
“When you’re negotiating these things, you want to try to keep it from going to court,” Berger says, “because it doesn’t benefit either party.”
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