“LOVE THY NEIGHBOR” Is Not Always the Case

• Posted on: Dec 8 2017

Real property owners or lessees (“Owners”) often find that their real property is in need of improvement and/or repair (the “Work”).  Sometimes the Work requires access to the property of an adjoining property owner (the “Neighbor”).  In many instances, the Neighbor graciously permits access to the Owner’s contractors so that the Work can be performed.  In such instances the parties can informally agree on how to resolve problems that may result from the Work.

Sometimes  the Neighbor may voluntarily permit the Work to be prosecuted, but only after a formal license/access agreement is negotiated and executed.  Access agreements can address many issues including, but not limited to: time and day restrictions for the Work; appropriate indemnification and hold harmless provisions; insurance requirements; requiring the Owner’s insurance policies to name the Neighbor as an additional insured; requiring prompt repair of damage to the Neighbor’s property, and the like.

However, when neither informal nor formal cooperation is forthcoming from thy Neighbor, an Owner can rely on section 881 of New York’s Real Property Actions and Proceedings Law (the “RPAPL”), for relief.  RPAPL §881 provides:

When an owner or lessee seeks to make improvements or repairs to real property so situated that such improvements or repairs cannot be made by the owner or lessee without entering the premises of an adjoining owner or his lessee, and permission so to enter has been refused, the owner or lessee seeking to make such improvements or repairs may commence a special proceeding for a license so to enter pursuant to article four of the civil practice law and rules. The petition and affidavits, if any, shall state the facts making such entry necessary and the date or dates on which entry is sought. 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.

In explaining the need for RPAPL §881, the court, in 2225 46th Street, LLC v. Hahralampopoulos, 55 Misc.3d 621 (Sup. Ct. Queens Co. 2017), stated:

RPAPL 881 authorizes the court to grant the license on such terms as justice requires.  This language is broad and allows for the flexibility and full scope upon which equity depends.  In a normal commercial setting, where a license agreement cannot be reached, there is no license.  Where a license pursuant to RPAPL 881 is sought, the license can be compelled even though no agreement is reached, and, in that situation, the terms of the license are set in the discretion of the court.

(2225 46th Street, 55 Misc.3d at 623.)

Relief under RPAPL §881 is “addressed to the sound discretion of the court, which must apply a reasonableness standard in balancing the potential hardship to the applicant if the petition is not granted against the inconvenience to the adjoining owner if it is granted.”  (Queens College Special Projects Fund, Inc. v. Newman, 154 A.D.3d 943 (2nd Dep’t 2017) (citations omitted).)

The court may consider a host of factors in deciding a petition under RPAPL §881, including, but not limited to, “the nature and extent of the requested access, the duration of the access, the protections to the adjoining property that are needed, the lack of an alternative means to perform the work, the public interest in the completion of the project, and the measures in place to ensure the financial compensation of the [Neighbor] for any damage or inconvenience resulting from the intrusion.”   (Queens College, 154 A.D.3d at 943 (citations omitted).)

Courts also recognize that since the access required by an RPAPL §881 order does not benefit the Neighbor, “[e]quity requires that the [Neighbor] compelled to grant access should not have to bear any costs resulting from the access.”  (DDG Warren LLC v. Assouline Ritz 1, LLC, 138 A.D.3d 539, 540 (1st Dep’t 2016).)  Similarly, “[t]he statute and case law provide that [the Owner] is strictly liable for any damage it may cause to [the Neighbor’s] property.”  (2225 46th Street, 55 Misc.3d at 623 (citations omitted).)

Accordingly, RPAPL §881 orders frequently require that the Owner reimburse the Neighbor for Architectural and/or Engineering fees incurred by the Neighbor so that Neighbor does not have to bear “the costs of a design professional to ensure [Owner’s] work will not endanger his property, or having to grant access without being able to conduct a meaningful review of [Owner’s] plans.”  (Van Dorn Holdings, LLC v. 152 W. 58th Owners Corp., 149 A.D.3d 518, 519 (1st Dep’t 2017) (citations and internal quotation marks omitted).)  Courts also can award to the Neighbor, reimbursement of the legal fees it incurred in responding to Owner’s petition.  (Van Dorn Holdings, 149 A.D.3d at 519.)

In addition, under appropriate circumstances (depending on the length and extent of the intrusion), courts may award an access fee to the Neighbor because the court ordered license may “deprive [the Neighbor] of the use of a portion of his property.”  (Van Dorn Holdings, 149 A.D.3d at 519.)  Similarly, the posting of a bond by the Owner to secure possible damages and the payment of license fees is sometimes granted notwithstanding the availability of Owner’s insurance.  (DDG Warren LLC, 138 A.D.3d at 540.)

TAKEAWAY

Informal access, or access under a negotiated license/access agreement, with a cooperative Neighbor is certainly the preferred method of completing Work when access to adjoining property is necessary.  However, commencing a special proceeding under RPAPL §881, and complying with such resulting order as may be issued by the court, while costly, may be the only way for an Owner to complete necessary and/or desired repairs and/or improvements to real property, if dealing with an uncooperative Neighbor.