Adam Leitman Bailey, P.C. Obtained Payment of an Access License Fee for an Owner in a Case of First Impression Where Both the Owner and the Commercial Tenant Were Seeking Payment of a License Fee

Adam Leitman Bailey, P.C. Obtained Payment of an Access License Fee for an Owner in a Case of First Impression Where Both the Owner and the Commercial Tenant Were Seeking Payment of a License Fee

Adam Leitman Bailey

Adam Leitman Bailey

January 13, 2023 05:41 PM

Adam Leitman Bailey, P.C. was retained to represent a homeowner in Brooklyn in connection with negotiation of an Access and License Agreement with the developer of the neighboring property. The parties were able to negotiate all the terms of the agreement, but the Developer refused to pay the amount demanded by the Owner as a License Fee.

This particular case differed from a typical case involving an Access and License Fee because the building contained a commercial restaurant tenant on the ground floor, who was separately seeking to be paid a License Fee. The planned protections in connection with the construction next door included the erection of a construction fence three feet within two sides of the rear yard of the Owner’s building, which would have taken a substantial portion of the back yard used by the restaurant tenant for dining. The Developer eventually negotiated a License Fee with the restaurant owner, leaving open the restaurant’s right to seek damages in the future for lost business.

The Developer argued that the Owner was not entitled to be paid any License Fee because only the restaurant was impacted by the construction fence in the rear yard, and the Owner should not be entitled to any payment for the protection on the roof or the sidewalk shed in front of the building.

The Developer commenced a proceeding pursuant to RPAPL 881, seeking an order compelling an Access Agreement without payment of any License Fee to the Owner, and misrepresented to the Court the amount that the Owner was demanding as a License Fee.

Adam Leitman Bailey P.C. argued that the Owner was entitled to be paid a License Fee for the protection on the roof because the Owner – who also resided in the building, together with other tenants – frequently used the roof for recreation, and would be deprived of any use of the roof during the pendency of the construction. The Developer intended to install protection on the roof, access the air space above the roof, and to install scaffolding, netting, construction fences, and sidewalk bridges in, around, and over the building, which was expected to remain for up to two years, extend the chimney flue on the building, install four tie-backs which would remain as a permanent underground encroachment, and install vibration monitors and gauges. There was also a conceded likelihood of episodes of substantial vibration and shaking, creating disturbance of tenants and occupants in the building.

Adam Leitman Bailey, P.C. argued a License Fee paid to the Owner was appropriate and reasonable in light of the diminution in value and substantial interference with ability to utilize the Premises by its Owner, residents, tenants and guests.

The Court conferenced the application, and awarded the Owner a reasonable Access Fee – in addition to the fee negotiated by the restaurant tenant – confirming that both the Owner of the building and a commercial tenant would be entitled to receive a License Fee in connection with access required by an adjacent developer, as warranted by their respective ownership and leasehold interests.

The Owner was also entitled to be paid its legal fees and engineering fees incurred in negotiating the Access Agreement and in opposing the 881 application.

Bonnie Reid Berkow of Adam Leitman Bailey, P.C. represented the Owner in negotiating the Access Agreement and defending the 881 Application.

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