Key Points
- Clearer definition of “refusal” by adjoining property owners.
- Mandatory compensation for loss of use and enjoyment.
- Courts can now grant access for permanent encroachments.
Gov. Kathy Hochul recently signed into law an amendment to Real Property Actions and Proceedings Law Section 881 (RPAPL 881), a statute that allows property owners performing construction to seek court-ordered license to enter a neighboring property when voluntary access is denied. The amendment brings the most significant changes to the statute since its enactment in 1968 and introduces new obligations and powers for the courts.
Part of the initial push to revise the statute was a potential risk that the statute was subject to constitutional challenge as an improper taking due to the vagueness of the statute and the lack of consideration to the adjoining property owner, as well as seeking to reduce the amount of court proceedings over this issue.
RPAPL 881 allows a property owner who is performing demolition, construction or improvements on their property to seek a license to enter an adjoining property. The statute as previously written did not provide much guidance on the process prior to seeking the license from the court and how the court should handle granting the license, including what access could be granted and whether the adjoining property owner was entitled to compensation, other than for physical damage to the property. Parties and judges in these matters were largely relying on previous cases for guidance with no clear path.
Under the amendment, we now have some clearer guidance and a radical change as to what the court has the jurisdiction to grant. Hochul indicated when signing the bill that she expects the Legislature to eliminate the requirement of naming the adjoining property owner as additional insureds on the licensee’s policies and only require that the licensee provide the licensor with the information necessary to make a third-party claim.
What It Means
- The statute now sets forth what constitutes “refusal” by the adjoining property owner, an issue that was frequently litigated.
For example, was asking for money the developer did not want to pay, considered refusal? Was not answering letters about the access considered refusal? The amendment now makes clear that if notices of the requested access have been sent, to which the adjoining owner does not respond in 60 days, that is deemed refusal. Owners and developers should note that they should still be diligent in finding the proper address for the adjoining owner, which may not be the property address. Searching other public records may lead to notices that actually reach the owner.
- The statute now states that the licensee (party seeking access) “shall be required to reasonably compensate the adjoining owner for the loss of use and enjoyment of the adjoining premises including diminution in value.”
While the courts will still have to determine the value of the loss of use, which may depend on the nature of the intrusion and types of protection and access, it now mandates this payment wherein the prior statute did not.
- Most importantly, there are now express and specific measures of access, including preconstruction surveys, monitoring, protective covering over roofs, scaffolding and more, detailed in the statute.
Of greatest consequence, the statute now contemplates the ability of the courts to grant access for permanent encroachments, such as underpinning and flue relocations. Since the enactment of the statute in 1968, the legislative history surrounding that enactment, and case law since that time, it has long been held that the statute pertained to temporary access only and that the courts had no ability to grant any access that would result in a permanent change to the neighbor’s property. This has now changed, which is significant. The courts will still have to determine the “value” of the permanent encroachment, but that there is the ability to be awarded a license for same is a game changer for owners/developers who used to be at the mercy of adjoining owners, who knew the owner/developer had no avenue for judicial relief. Whether this change raises new questions about the constitutionality of the statute is yet to be seen.
The amendment, which seeks to clarify vague language, should benefit all, but the real test will be how negotiations of license agreements (pre-court intervention) are impacted and ultimately how the courts will apply the significantly revised statute. We will continue to monitor the situation.
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