NEW YORK, N.Y. – On July 18, 2023, Third Thursday presented its readers with a discussion of some of the changes anticipated in construction in New York City following the adoption of NYC Building Code amendments that became effective November 8, 2022. We have had 13 months’ experience under these new amendments, the most wide-ranging being those involving excavation and foundation work and adjacent properties.
Relative to movement and damage to adjacent properties during development, DOB (Department of Buildings) is trying a new approach. Previously, when an adjacent property was being adversely impacted by a developer, DOB would write notices of violation against the adjacent property owner who would in turn respond aggressively against the developer, making complaints to DOB, DEP, and anyone who would listen. DOB and the other agencies would then start writing violations against the developer. The goal of the adjacent property owner was to obtain a stop work order against the developer to force the developer into a plan that would stabilize the adjacent property and make repairs.
Regardless of the violation campaigns, lawsuits would follow. The developer would sue for access to install safety protection. The adjacent property owner would sue for damage. On occasion, an insurer would be involved to repair the damaged adjacent property, but it has been many years since that happened.
Most insurers exclude earth movement from contractor insurance policies, or they use other devices including defining the adjacent property as part of the construction site (based on the safety protections) and then exclude property damage to the adjacent property from coverage.
DOB’s new approach is to avoid quibbling over fault and force the parties to deal with engineering issues. DOB engages the parties separately via their respective team of engineers. DOB listens to those teams, those for the developer and those for the adjacent property owner offer explanations and proposals for addressing the safety of the adjacent property. Work may be stopped informally during this investigation.
In one case, DOB stopped the work on pile installation. After a less than through review of the facts and circumstances, DOB decided the movement of the adjacent building was not due to the work on the adjacent development and allowed pile installation to restart. DOB stopped the work again after the engineers for the adjacent property showed a direct correlation between the developer’s pile work (both originally and following resumption of work) and the adjacent building movement.
The adjacent property owner retained three registered design professionals, including geotechnical and structural engineers, who performed extensive testing of its building. The adjacent property owner also retained a monitoring firm.
The adjacent property owner’s team sought details on both the construction of the adjacent building and on the pile installation by the developer. To date, the developer has not provided pile logs (grout volumes), special inspection reports for the piles, contractor submittals for the pile installation, earthwork and pile specifications, dewatering plans, dewatering calculations (there was extensive, unpermitted dewatering, without filtering of the fines with large quantities of mud being pushed in the local sewers), structural stability reports and NCRs (non-confirming reports) from the special inspectors. To date, this information has not been provided by the developer’s team to the adjacent property owner’s team.
DOB finally stopped the work a second time, after more than four inches of movement to the adjacent building was recorded by the adjacent property owner’s monitoring firm. After two more months of wasting time, the developer finally retained a structural stability engineer.
The lesson to take from this is that DOB no longer wants to be in the middle of legal campaigns by developers and neighbors and their respective lawyers. DOB wants reputable RDP to work cooperatively on engineering solutions to avoid or minimize damage to adjacent properties and allow development to proceed. Whether this is an effective approach remains to be seen. Meanwhile lawsuits are flying over who will pay for what.
Carol A. Sigmond is a partner at Greenspoon Marder LLP, New York, N.Y.
