Overcoming Objection: Working with a Neighbor who Opposes a Construction Project

“Be at war with your vices, at peace with your neighbors, and let every new year find you a better man.” -Benjamin Franklin

Too often, a developer needs access to a neighboring property in order to complete a construction project. Unfortunately in some instances, neighbors may choose to “be at war” with a developer, particularly during a construction project.

Depending upon the circumstances, a property owner needing to access a construction project from a neighbor’s property may pursue different courses of action:

• Negotiate a “crane swing agreement.” In many commercial construction projects, a developer will work through its attorneys to negotiate a crane swing agreement, which contemplates that the neighboring property owner will allow the developer limited access to the neighbor’s property and also the right to erect a tower crane that will swing over the neighboring property. The developer has a number of options available to induce the neighboring property owner to reach such an agreement: an agreed upon fee to cover the neighboring owner’s legal fees to deal with the issue and compensate the neighbor for inconvenience; an agreement whereby the developer will document the conditions on the neighboring property and agree in advance to correct any damage resulting from the construction activities; an agreement to provide insurance covering injury or damage; or several other types of incentives.
• Move forward without consulting a neighbor. In residential construction, a developer often takes the position that the dollars involved may not warrant a monetary payment to the neighboring owner and simply presses ahead with the project without negotiating an agreement with the neighbor. However, local law contemplates that a neighboring owner need not afford the developer with access to the property to complete the project. The developer who crosses over the property line to complete construction work is a trespasser and suffers potential civil and criminal liability. The developer has to balance the risk that the neighbor may file suit against the likely cost of an adverse decision — the damages conceivably might be deemed to be nominal or a court could impose substantial financial damages for the trespass.

Simply stated, it’s frequently better to negotiate an agreement with the neighbor.

What if a neighbor refuses an access agreement?

Depending upon the circumstances, the developer may have greater potential financial exposure to protect the property of a neighbor. Where the developer shares a party wall with the neighboring homeowner, the developer cannot complete the desired construction without infringing on the neighbor’s property rights.

This situation is more frequently encountered as developers construct “pop-up buildings” to replace row houses. During the initial phase of construction activities, the developer must protect the adjacent properties against damage such as water intrusion, damage to the foundation, or damage to an existing party wall. As construction proceeds, the developer may also require access to the neighboring property to erect scaffolding to complete the project’s construction work. If the neighboring property owner declines to cooperate, the developer likely will incur substantial cost to work around the lack of access.

In the metropolitan Washington, DC area, there seems to be little a developer can do to compel a neighboring property owner to cooperate, aside from offering financial inducements to do so. Conceivably, a developer could take the neighboring property owner to court to seek access premised upon the theory that the developer requires an “easement by necessity” to the neighbor’s property. Depending upon the judge, a developer might be successful in compelling access to the neighbor’s property.

Working Together

Although this type of problem can lead to conflict, New York law encourages property owners to work together to resolve their differences. N.Y. Real Property Actions and Proceedings Article §881 (RPAPL) provides an expedited process in which a property owner seeking to make “improvements or repairs” to his/her property can obtain a court order granting a temporary license to enter the adjoining property to complete the proposed construction.

In deciding these cases, the Court will consider two criteria:

1. Can the planned improvements or repairs be made without entering the adjoining property?
2. Has the adjoining landowner refused to provide the required consent to the proposed scope of work?

Relatedly, New York courts have recently shown a willingness to allow adjoining landowners to bring an RPAPL action in reverse and impose a license agreement on the developing landowner “where the parties cannot reach a licensing agreement and there is clear credible evidence that [the developer] has entered or is about to enter or damage [the adjoining owner’s]… property.” As such, New York’s model provides incentive to both sets of neighbors to negotiate and reach an amicable deal on their own before spending considerable sums in legal fees to fight over the issue in Court.

By contrast, the District of Columbia lacks a mechanism that compels property owners to negotiate license agreements. Instead, the District’s building code requires a neighbor to notify adjoining property owners of proposed construction at the time the requesting party files for building permits. The adjoining property owner then has 30 days to review the materials submitted with the notification letter to decide if he/she will consent to the proposed work.

If a notification letter is received before 30 days, with approval by the adjacent property owner and returned to the Department of Consumer and Regulatory Affairs (DCRA), DCRA will issue the requested building permit.

However, if the adjoining property owner provides only conditional approval or a denial, DCRA is authorized, but not required, to grant a reasonable extension of time so the applicant can resolve the issue; ultimately, DCRA has the authority to make a final decision if the parties cannot reach a mutually satisfactory resolution. The adjoining landowner’s failure to respond within 30 days of receiving the notification constitutes an election of approval of the applicant’s plans.

Yet, in all cases, DC municipal regulations require the applicant to protect adjacent public and private property “from damage during construction, alteration, repair, demolition, or raze of a premises at the expense of the person causing the work. Protection must be provided for lots, and for all elements of a building or other structure, including, but not limited to, footings, foundations, party walls, chimneys, skylights, and roofs. Provisions shall be made to control water runoff and erosion during construction or demolition or raze activities.”

Accordingly, while the District’s system requires permit applicants to notify their neighbors of proposed construction, it also imposes a per se burden on the constructing party to indemnify their neighbors from any damages caused by their construction.

Preventing Fights

Local developers are often forced to confront a neighbor who refuses to provide access in order to undertake construction activities. Frequently, the neighbor’s refusal to grant access is warranted. In most cases, the better course is to approach the neighboring property owner well before construction commences. It is far less costly in terms of hard expenses, time, and legal fees to negotiate an access agreement before a construction dispute becomes contentious.

Arnie Spevack helps clients resolve disputes involving high-end residential properties, including contract disputes, adverse possession title claims, or dealing with construction contracts. For more information, contact Arnie at [email protected].