Contiguous Owner Opposes Neighbors Application for Roof Protection:

This was originally published on the SGR Blog.

Court Weighs and Resolves Competing Claims and Interests

New York has a statutory procedure in which a real property owner contemplating construction or renovation work may petition the Court for a license to install roof protection and safety devices that implicate the rights of a neighbor. But, as a recent case illustrates, the Court may be required to weigh and evaluate competing claims, facts, and interests in addressing the petition.

145 E. 57th St. Associates, LLC sought an order, pursuant to RPAPL 881, granting it a license to enter the neighboring property of Aldo LLC at 149 E. 57th St., to install required roof protection and construction safety devices. Associates was required to perform masonry repair work along the brick facade of its building, including a wall shared with Aldo’s building. But Aldo opposed and contended that Associates had erected a sidewalk shed in front of its building without its permission and that Associates waited 42 days after receiving a work permit to seek access from Aldo—so “there is no emergency.”

RPAPL 881 provides that, upon a recitation of circumstances requiring entry onto an adjoining property, including the dates entry is sought, the Court shall grant a license in the appropriate case. In so doing, the Court applies a reasonableness standard, balancing a petitioner’s hardship, if the license is not granted, against the adjoining owner’s inconvenience, if the license is granted. Where a license is granted, the encumbered property owner may be entitled to a licensing fee for the inconvenience imposed as well as actual damages occurring as a result of the entry.

Here, Associates sought a license to install, maintain, and access protective roof scaffolding for repairs expected to last four months. Associates established the encroaching protective structures proposed were required by the NYC Building Code for the facade work Associates planned to complete. Aldo’s building’s roof was approximately nine-stories below that of Associates-and roof protection on Aldo’s building was undoubtedly necessary. Aldo’s roof was utilized solely to support mechanical equipment and there would be little, if any, inconvenience in allowing protective roof scaffolding to be placed on the roof.

Although Aldo opposed Associates’ application for a license, opposition was chiefly devoted to bemoaning perceived late responses from Associates and the necessity of hiring attorneys to represent its interests in negotiations. But Aldo did not contend that the proposed protections would limit its ability to enjoy the property, or that the encroaching protections would negatively affect its business. Accordingly, Aldo’s generalized complaints did not rise to level sufficient to warrant denial of a license.

Turning to costs and fees, attorney’s fees and litigation costs were incidents of litigation, and a prevailing party is not entitled to recompense for those expenses absent agreement between the parties or statutes or rules provide otherwise. However, RPAPL 881 provides that the license shall be granted “upon such terms as justice requires,” and justice often includes the award of a licensing fee, attorney’s fees, and engineer’s fees. That is, because the respondent to an RPAPL 881 petition has not sought out the intrusion and does not derive any benefit from the work, equity requires that the owner compelled to grant access should not have to bear any costs resulting from the access. A property owner, therefore, should not be forced to incur the costs of a design professional to ensure that the proposed licensee’s design will not damage the owner’s property.

However, the award of such fees to a respondent owner is not automatic, but rather dictated by concerns of equity. A proceeding under RPAPL 881 necessarily flows from the failure of the parties to successfully negotiate a licensing agreement. The Court must be mindful of the fact that it is called upon to grant access after the parties have failed to reach an agreement, and must not allow either party to overreach and use the Court to avoid negotiating in good faith.

Here, for a license to place a protective roof scaffolding over its building, Aldo demanded escrow deposits or bonds exceeding two million dollars. That demand for such extraordinary deposits was wholly conclusory. Aldo did not claim any loss of enjoyment of its property due to the proposed license, nor did it cite any authority supporting such exorbitant fees for the placement of routine roof protections.

The Court found that Aldo’s palpably unreasonable demands showed a failure to negotiate in good faith. Accordingly, the Court declined to award Aldo attorney’s or engineer’s fees or costs associated with the proceeding. However, Aldo was entitled to a licensing fee. The trivial inconvenience to Aldo, placing a scaffold on its roof without impacting access to its property, warranted an appropriately modest licensing fee.

The Court awarded Aldo a monthly fee of $500 for the duration of the license, absent further order. It also required Associates to place $25,000 in an escrow account, in the event that the permitted roof protections caused damage to Aldo’s building, to be determined by the Court at the end of the license period.

As to attorney’s fees, Aldo devoted significant portions of its opposition outlining the various retainers, hourly rates, and agreements it entered in engaging counsel to represent it during negotiations. However, having found that Aldo negotiated in bad faith, as shown by palpably unreasonable demands, the Court declined to award such fees. Because such costs are incidents of negotiation, had the parties successfully reached an agreement regarding the dispute, those attorney fees would be borne by each party.

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