Adjacent development is always problematic for co-ops and condos. This is not a revenue opportunity. Rather, it should be a time to ensure the structural stability and integrity of your building. Co-op and condo boards and their managing agents have tools available to improve protection when there is adjacent development. One of the most important, if not the most important, tools is requiring the naming of a special inspector responsible for the structural stability of the adjacent property.
Although the New York City Building Code has required a developer to appoint special inspectors/ structural engineers to be responsible for the stability of adjacent properties (structural stability engineer) for many years, enforcing this requirement has been the exclusive purview of the Department of Buildings (DOB). Additionally, there were issues as to duties owed to the adjacent property owner by the structural stability engineer. Many developers have ignored this obligation because of a lack of DOB enforcement. Times are changing, however, and not because DOB’s enforcement has improved but because adjacent property owners whose property is threatened or damaged by developers have some lawful self-help available.
The analysis of the self-help option begins with the language of section 3309.4 of the Building Code, which imposes absolute strict liability on anyone who “causes” excavation. Traditionally, this was interpreted to include the developer, general contractor and any excavation subcontractor. Historically, this has not included the developer’s architect. The issue of the developer’s structural engineer, geotechnical engineer and special inspectors for excavation and foundation has been evolving.
It now appears that geotechnical engineers and structural engineers who perform soil analysis, testing and design foundation and provide special inspections will be deemed to have “caused” excavation. I believe this will also apply to engineers who design dewatering systems. This creates a “duty” to the adjacent property owner which will support a negligence action. This means that they may be named as defendants in property damage actions, and their malpractice insurance will be available to help finance repairs.
However, there will be complications. Consider if an adjacent building has been damaged by differential settlement or being undermined by a developer, and the DOB demands a peer review of the design or a design for a corrective plan. The peer review or corrective work engineer may be reluctant to become involved because of the potential for exposure to litigation based on events prior to their involvement. This is going to lead to very closely negotiated retainer and supplemental access agreements. Additionally, any peer reviewer will insist upon a current condition survey of the adjacent building. If the owner of the adjacent building is entitled to have his or her engineer join the walk-through and receive a copy of the report, then cooperation is advisable.
For co-op and condo boards and their managing agents, these developments do suggest some practical actions for buildings with adjacent developments. These include: demanding the developer to name a qualified structural stability engineer/special inspector before work begins; demanding adequate insurance from contractors and developers; demanding a detailed inspection of the adjacent property — interior and exterior — from the developer and demanding a detailed and code-compliant geotechnical study and report from a developer. It also includes retaining for the affected co-op or condo, before work begins, a structural engineer who makes regular period inspections of the development site and the adjacent building, all fully photographed and documented and all at the sole cost and expense of the developer. All of these items should be included in any access agreement.
If there is pushback from the developer, do not be intimidated — these items are all consistent with the Building Code requirements. The courts generally enforce Building Code requirements in RPAPL section 881 proceedings.
In addition, the developer, the developer’s design team and the developer’s contractor should be investigated carefully before finalizing any access agreement. This investigation should include a litigation review for the contractor, the design team and the developer, and for the contractor and design team, a review of the DOB discipline records. If the developer or the developer’s team does not have a good safety record or has a history of damaging adjacent properties, insist that the developer retain a more qualified contractor to engage in work that impacts your property.
This column presents a general discussion. This column does not provide legal advice. Please consult your attorney for specific legal advice.
Carol A. Sigmond
Partner
Greenspoon Marder LLP
1345 Avenue of the Americas, Suite 2200
New York, NY 10105
carol.sigmond@gmlaw.com
(212)524-5074
