Keeping Cool Under Fire Handling Construction Disputes with Neighbors

 The good news is, after a fallow period in the depths of the recession, the  construction industry in New York City is starting to come back. However, with  that activity comes the potential for disputes and property damage, especially  with neighboring properties. Lately some of the projects stalled in the  economic downturn have come alive, and co-ops and condominiums next door to  these projects have been calling me for advice on what to do to gear up.  

 One small co-op building found themselves with a Goliath next door. The  construction project had been quiet for over one year, then suddenly  shareholders started seeing a lot of activity. One day, the board president  received a call from someone affiliated with the project, stating that they  would need to “protect” the co-op building, and requesting a meeting to discuss an access agreement.  This was a terrifying mixed message for the board. There was nothing about this  project that would benefit the co-op, yet to some degree they couldn't say no,  because such protection is required by law. So this quiet little co-op building  called me in a panic about how to handle this situation.  

 My first order of business was to put together a team of experts to work with me  in reviewing the plans for the project next door. Prior to that time, my client  really had no idea of what the neighbor was planning to do, and how it would  affect their property. Assembling such a team is essential if you are going to  have any meaningful discussions with a neighboring developer. You need to fully  understand the technical aspects of what they are planning to do, and fully  understand if there is room for any counter-proposals. Frankly, developers are  often hoping the neighboring building cannot (or will not) spend the money  needed to do this investigation and determine what is really going on, and will  pretty much agree to anything that does not sound too outrageous.  

 Show Us the Way

 We started off with the developer inviting us over to “show us the plans.” The poor board president’s head was spinning as we heard for the first time what they were really  proposing and how it would impact my co-op client’s building. The developer's rep was not eager to give us a copy of the very  complicated plans, but we needed to review them ourselves to determine what the  developers really wanted to do—and whether it was agreeable, trespassing, or something else entirely.  

 What we found were lots of issues and some very sloppy plans, requiring us to  negotiate with the developer on issues involving access, lot lines and whether  any compensation would be paid to my client. Over a period of months, the  developer’s representative went from being very dismissive of the board to agreeing to  pretty much everything we wanted. I am not saying this happens on every  project, but you also don’t know until you try—and after you do all the preparatory discovery.  

 The biggest issue with neighbors doing construction work is the proximity of the  properties and the fact that there will be banging, digging and underpinning  for foundation work, which almost definitely will cause some degree of damage.  Buildings in New York City—boroughs included—are very close together, and developers are maximizing their usable building  space by building ‘in the face’ of neighboring buildings. Windows looking out over lot lines are often all but  covered up. In some cases, the new buildings may be less than two feet from the  building next door. This closeness can lead to problems down the road if  repairs are ever needed, since there is not much space between the buildings to  do the repair work.  

 A larger neighboring building may need to do work right next to or even beneath  the neighbor’s smaller building, which can create huge cracks and even a “shift” in the building foundation. Windows may no longer close and the floors may  become crooked. To the extent that the developer has construction crews that  can jump in and fix these issues right away, there is some possibility of  remedying the problem without litigation. However, more often than not, these  situations lead to litigation, because the dollars involved in performing  repairs can be so great that both sides need to have their insurance carriers  involved.  

 Do a Pre-Construction Survey

 Since many construction projects damage neighboring properties, the best advice  is “a picture is worth a thousand words.” A pre-construction survey with photographs can be extremely useful in  pinpointing when a problem occurred. These are issues that are best organized  by legal counsel. There may also be access issues where the neighbor doing the  construction needs to gain access to the neighboring property in order to “protect” it with scaffolding and netting. Even though there is a mutual interest in  having “protection,” it does not always mean that the parties will agree on how it is supposed to be  done. Sometimes the builders just move right ahead with these activities and  the neighbors find out after the fact. Other times, they ask for permission via  access agreements beforehand. Occasionally, the builder actually “takes” some of the neighboring property, or encroaches without permission. This is one  of the most serious things that can happen and the most difficult to unravel.  This is why surveys are so important.  

 Some neighbors try to withhold their permission to allow access. Generally  speaking, if all that is needed is access to protect your building, the court  is going to allow it, but there may be special conditions that must be taken  into account. These agreements and the negotiations become more complex when  the builder needs more than just protection. The builder may need to perform  certain activities from the neighboring rooftop or property. He may need to “borrow” some of the neighbor’s airspace or store materials on the roof. This can lead to heated negotiations  and sometimes to litigation.  

 A building that has been advised that construction will be commencing next door  should be “well armed” with legal counsel and a team of experts to help understand what the neighbor  is planning to do and whether there are likely to be problems. One homeowner  found that the neighbor’s contractor had knocked down a small wall between the properties, which was  actually a retaining wall. Soil started to fall and a stop work order was  issued. It also raised a question about where the lot line was and whether a  fence had been installed too far over on to the neighbor’s property. People who are not prepared find out about problems after the fact,  then seek legal counsel.  

 Anyone in a situation where a neighbor is doing construction work should gear up  and consult with knowledgeable construction counsel and be well-prepared for  the process before the construction begins. It’s good advice to approach neighbors in a friendly fashion and try to smooth out  problems before the work commences.   

 C. Jaye Berger is a Manhattan-based attorney specializing in real estate, co-op,  condo, environmental and construction law.

 

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