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Appellate Panel forces Developer to Pay Up for Lost Terrace

Appellate Panel forces Developer to Pay Up for Lost Terrace
The Appellate Division, First Department decision in DDG Warren LLC v Assouline Ritz 1, LLC 2016 NY Slip Op 02926 adds another brick in the wall of Real Property Actions and Proceedings Law (“RPAPL 881”) cases requiring developers to pay up when impacting adjacent property owners.  
The developer’s construction would force the neighboring TriBeCa penthouse owners to lose use of their terrace, outdoor kitchen and hot tub for 30-months.  The penthouse owners refused to give the developer access on the developer’s proposed terms.  
The developer filed a RPAPL 881 petition seeking court-ordered access. Justice Shlomo Hagler granted the access and awarded the penthouse owners a license fee, but postponed setting the amount of the fee until after the developer’s construction was completed – 30 months too late.  The Appellate Division determined that license fees payments should not be postponed - they should be made contemporaneous with the access. 
RPAPL 881 enables a court to give developers access to neighboring properties upon “such terms as justice requires.”  See, e.g.,  Matter of North 7-8 Inves., LLC v. Newgarden, 43 Misc 3d 623 (Sup Ct, Kings County 2014).  However, because adjacent neighbors do not seek out the intrusions by developers, the neighbors should not be required to bear costs resulting from the access, including license fees and legal fees.  Id.  
The Appellate Division also held that a developer may be ordered to post a bond to secure the license fees awarded to the neighbor and possible damages, even where the neighbor is covered by the developer’s insurance.   
The brick in the wall?  This is another decision that emphasizes that access onto an neighboring property must be reasonable and that “justice requires” the payment of a contemporaneous license fee for significant intrusions.