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License/Access Agreements

Oct 02, 2018

C. Jaye Berger, Principal, Law Offices C. Jaye Berger

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 come about 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.” Someone can actually walk across the open backyard area and say, “You know, we're over there and we plan to be doing some work involving your property.”


License/Access Agreements 

When an owner seeks to make improvements or repairs to property and needs to gain access to an adjoining building and permission has been refused, the owner  may begin a special proceeding for a license to enter the building. (Real Property Actions and Proceedings Law, Sec. 881)


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 an 881 hearing, 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 with 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, you really don't want it to happen at all. But you're trying 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 really analogous to having an apartment alteration agreement. In those, you've got a neighbor on your floor who's going to be doing a big renovation, so you take some pictures of your apartment to document its condition before he starts work. It’s a similar situation in giving access to a developer. He wants to come into your building, your basement, and your roof and document what it looks like so that no one can say later on that the developer did or did not cause damage.


Then there may or may not be more steps he needs to take for protection. The developer might need to put up sidewalk sheds, he might need to cover windows, he might need to go into different parts of your building. In one building I know of, the developer wanted to rent out the basement so he could use it for his purposes during the construction process.


All of this depends on the configuration of your building and what the developer wants. Those are the kinds of things that you get into negotiations about. What will the developer pay you to have the kind of access he wants? That's where the dance gets really delicate, with the developer saying he won’t pay $100,000 for access but he will pay $2,000. I'm just saying it to be dramatic, but you have those kinds of discussions with the attorney with the threat of court always present. It’s hard to work something out with all those issues flying in the air.


You should end up with set of written agreements. One will be a pre-construction survey agreement. That's where you require a certificate of insurance, set the time and date of the work, and get a copy of the engineer’s report, prepared by the developer. Any of the protection items are discussed in the full agreement. There can be a lot of back and forth about those 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?” It's not exactly like that. However, there has been enough of this construction going on during 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 does set the bar a little 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. Now let's just say, worse case scenario, you go to court. What you're doing there is the same kind of negotiations, it's just with the judge looking out over what you're all saying to each other. So you have to think, is it really worth it to have to do that? But sometimes, there are genuine reasons why you have no choice but to go to court and that might be where the developer wants to do something, and you're saying he doesn't really need to. He can find another way to do it. He doesn't have to be coming onto your property doing this or that.


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 with that scenario is the developer is going to want you to give the green light and agree to everything by signing this agreement with things that are still dangling a little bit. 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 people feel like they don't want to spend the money on an attorney, they want to just go it on their own. But in the end, it's a lot to deal with if you're a lay person.

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