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Recent Trends in RPAPL §881 Cases in New York County

July 22, 2016

The Courts of New York County and the First Department have historically been silent regarding, or overly against, awards of license fees and attorney's fees for Respondents in connection with RPAPL §881 actions. However, in recent months and years there have been several decisions in both the lower courts and the Appellate Division that suggests this trend is shifting.

Most recently, the Appellate Division, First Department, held that "justice requires" a developer to pay contemporaneous license fees for access to an adjacent neighbor's property. DDG Warren LLC v Assouline Ritz 1, LLC 2016 NY Slip Op 02926; 2016 N.Y. App. Div. LEXIS 2805 (1st Dep't) (decided April 19, 2016). In the case, there were certain penthouse terraces and glass elements of a building adjacent to a construction project which were going to be impacted by the construction protection. The Court reasoned that because the respondent neighbor had not sought out the intrusion; did not derive benefit from it; and the granting of the license would entail substantial interference with the use and enjoyment of the neighboring property, thus decreasing the property's value during that time (in that case, 30 months), the respondent should be entitled to a contemporaneous license fee. The Appellate Division also held that the lower court's award of attorney's fees to the respondents was proper.

See also, Columbia Grammar Preparatory Sch. v. 10 W 93rd St. Hous. Dev. Fund Corp., 2015 NY Slip Op 31519(U)(Sup Ct, NY County August 13, 2015); Snyder v. 122 E. 78th St. NY LLC, 2014 Slip Op 32940(U)(Sup. Ct., NY County 2014); and In the Matter of 25 Tenants Corporation v. 7 Sutton Square, LLC, 2015 Slip Op 30526(U)(Sup. Ct NY County 2015) for other cases where license fees have been awarded.

So what does this mean for Developers? Neighbors? What are best practices in these circumstances? Despite the recent trends, the outcome of RPAPL §881 proceedings remains largely a wild card, which can present risk for both the neighbor and the developer. It is imperative to understand as early as possible what effects the construction will have on the neighboring properties and to minimize that impact. Although the "show" (the construction) will likely go on, if the parties can come to reasonable terms as to the value of the impact (if any), time and money can be saved by all and the parties can focus on being good neighbors and not feuding ones.

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