United States: Collaborating With The Construction Next Door

Last Updated: April 14 2017
Article by Bruce A. Cholst

As New York's construction boom continues apace, co-op and condo boards are increasingly faced with the specter of demolition of buildings to make way for new ones, or erection of additions to existing structures on the property next door.

When an adjacent lot becomes a construction site due to such activity, boards are presented with two huge risks: (1) the prospect of damage to their building and its structure, and (2) the potential for unanticipated outof- pocket costs attributable to professional fees and repairs. The threshold dilemma for boards faced with these issues is whether to be collaborative with or confrontational toward their neighboring developers. We suggest the former because the law (e.g., RPAPL § 881) favors developers' rights to build on their sites, assuming their compliance with zoning and building codes. Thus, a collaborative approach affords the opportunity to minimize the risk of damage and expense presented by neighboring development — on the board's own terms, and without the expense and disruption incurred through litigation. Furthermore, the vast majority of developers, who are usually pragmatic and want to complete their projects with maximum speed and minimal cost, are receptive to collaboration. This article offers boards a primer for implementing a collaborative strategy when faced with construction next door.

Mobilize the Right Professionals

The first step is to mobilize a team of professionals: a construction savvy attorney, an architect, a structural engineer and an insurance broker. Counsel should initiate dialogue with the developer, suggest an introductory meeting, and request advance review of the developer's plans, specifications and insurance policies related to the project. Once the attorney, architect and engineer have reviewed the relevant documents to determine the nature and extent of the contemplated project and ascertained any potential concerns, and the insurance broker has evaluated the nature and extent of the coverage contemplated by the developer, the introductory meeting should be scheduled. A board representative, the developer, and the association's and developer's respective counsels, architects and engineers should attend the meeting. The meeting has the twofold purpose of establishing a basic trust level among the parties and negotiating a licensing agree­ment, which will govern the parties' relation­ship through completion of the developer's construction.

Negotiating a Licensing Agreement

The objectives of a licensing agreement should be (1) to minimize the risk of damage to the association's building arising from the developer's demolition and/or construction, (2) to create a system of redress for damages actually incurred from the construction, and (3) to reimburse the association for its out-of-pocket costs due to the neighboring construc­tion. The licensing agreement can also address the following issues:

  • Proactive design modifications resulting from the association's professionals' pre-meeting review of the developer's plans and specifications.
  • A protocol for the association's engineer's review and approval of design decisions as the project is implemented to ensure safe procedures.
  • Participation of the association's engineer in regular construction site meetings, and preservation of their right of inspection during the course of the project to confirm compliance with the approved design.
  • Confirmation and documentation of the agreed upon insurance coverage.
  • A "stop work" protocol in the event of impending damage to the building (i.e., from "settlement").
  • Indemnification provisions and a secu­rity escrow deposit in the event of actual damage to the building.
  • An "access fee" to compensate the asso­ciation for the developer's inevitable en­try upon its property during the course of work.
  • Reimbursement of the association's pro­fessional fees.
  • Construction time deadlines with finan­cial penalties for noncompliance.

The agreement should also feature a provi­sion for reimbursement of attorneys' fees in­curred in the course of enforcing its terms, in the event of breach by the developer. The fee provisions of a licensing agreement should be used to make the association whole for its ac­tual damages accessed by the next door con­struction, not to extract a windfall from the developer.

Monitor, Monitor, Monitor

Licensing agreements arm boards with the ability to cushion themselves against disaster arising from construction next door. How­ever, these protections are worthless unless the board's structural engineer exercises their right to aggressively monitor the developer's construction. Such monitoring will enable the engineer to spot potential or pending prob­lems before they unfold into disasters and act to contain resulting damage. For example, if in the course of actually excavating the new construction site, it becomes apparent to the board's engineer that the building's founda­tion is being undermined, the board's en­gineer can press the developer to stop work before the building shifts and its walls crack, leading to possible collapse.

Thus, there are three steps to a successful collaborative response by boards to the risks presented by new construction next door: (1) immediately mobilize a strong professional team, (2) negotiate an airtight licensing agree­ment, and (3) maintain unrelenting vigilance during the course of construction. Each of these elements is indispensable.

About Anderson Kill

Anderson Kill practices law in the areas of Insurance Recovery, Commercial Litigation, Environmental Law, Estates, Trusts and Tax Services, Corporate and Securities, Antitrust, Banking and Lending, Bankruptcy and Restructuring, Real Estate and Construction, Foreign Investment Recovery, Public Law, Government Affairs, Employment and Labor Law, Captive Insurance, Intellectual Property, Corporate Tax, Hospitality, and Health Reform. Recognized nationwide by Chambers USA for Client Service and Commercial Awareness, and best-known for its work in insurance recovery, the firm represents policyholders only in insurance coverage disputes - with no ties to insurance companies and has no conflicts of interest. Clients include Fortune 1000 companies, small and medium-sized businesses, governmental entities, and nonprofits as well as personal estates. Based in New York City, the firm also has offices in Philadelphia, PA, Stamford, CT, Washington, DC, Newark, NJ and Los Angeles, CA.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions