Accounting for Law
Real Estate

When the developer next door wants to use your property

With urban land becoming increasingly scarce, many condominium boards will be asked for access to their land when their neighbours want to build or renovate, Toronto condo lawyer John De Vellis tells CondoBusiness.

“The condominium may be asked for permission to allow a crane to swing over its property, scaffolding to be erected on its property, for its property to be used to shore up part of the excavation on the neighbouring property, or for construction materials to be stored on its property,” writes De Vellis, a partner with Shibley Righton LLP.

“But these are just a few examples. The possibilities are endless and the disruption to the condominium’s residents can vary from minor to quite significant,” he tells the online publication.

Just because the developer wants access to the property, doesn’t mean he has a right to it, says De Vellis.

“In some jurisdictions, the law allows neighbouring property owners to access adjoining properties for repairs or renovations as long as certain conditions are met. In New York State, for example, the law allows a property owner to apply for a licence to effect repairs if the adjoining owner refuses to consent.

"In a case that gained some notoriety in New York City, the New York Public library went to court to get a licence after the board of a condominium adjacent to the library’s midtown branch refused to grant access to scaffolding and other construction equipment required for a $200-million renovation to the branch. The condo board has apparently asked for a licence fee of $450,000 or $15,000 per month during the planned 30-month renovation.”

An article in the New York Daily News says the project will proceed, without a fee, following a court decision, reports CondoBusiness.

But there’s no such law in Ontario, writes De Vellis.

“When developers require access, they have to rely on either an easement in their favour, municipal right of access bylaws or an agreement with the condominium corporation.

“The first question in these circumstances is whether there are any easements registered on title that require the condominium to provide access for the purposes of construction. In phased developments, developers normally ensure that the early phases have easements on title requiring the condominium corporation to provide access for construction of subsequent phases.

"Where there is an easement, the condominium may be required to grant access to the developer, but it’s a good idea to check with the condominium’s lawyer to see what, if any, conditions may be placed on the right of access.”

Without an easement, the legal right of access is limited, says De Vellis.

“In some municipalities, such as the City of Toronto, a property owner can obtain a permit from the city in order to gain access to a neighbour’s property if such access is necessary in order to make repairs or alterations to any building. New construction or the total replacement of an existing building, however, is not included in the right of access bylaw,” he says.

“Often the developer and the condominium will enter into an agreement granting the developer a right of access to the condominium’s property in return for certain concessions by the developer.”

De Vellis says money is often at the heart of such agreements. He says the amount of compensation usually depends on the degree of disruption to the condominium property, the amount of time access is required, and even the nature of the development being built.

“It’s not unusual to see licensing fees paid to condo corporations of $20,000 or $30,000 or more. Often the access fee is negotiated as a monthly fee and payable as long as the encroachment exists on the condominium’s property,” he writes.

“But financial compensation is just the start. The access agreement is a good opportunity for the condominium to negotiate other concessions that may reduce the disruption or inconvenience that residents may face from the construction,” he says.

“For example, an access agreement can specify when construction can take place, and limit the times the developer can access the condominium’s property. The developer may also be asked to agree to conditions to minimize debris or dirt and even to pay for window cleaning. 

"In one case, a developer agreed to erect a barrier to protect an art installation from dust and debris and agreed to have the art installation cleaned once construction was completed.”

De Vellis says other concessions may be “less tangible but nonetheless provide value to residents. For example, a developer may agree to implement a communications plan to keep residents informed of construction activity, and may be asked to curtail activity during certain religious holidays.”

He says the developer should also agree to indemnify the condominium corporation for any property damage or liability for personal injury caused by the project.

Condo corporations should also ensure the developer has adequate insurance for the project, he says, adding that the corporation and its owners should be listed as additional insureds. That way, the corporation can make a claim directly if something goes wrong, says De Vellis.

They should also have their own engineers review the construction plans.

“Often the developer will agree to compensate the condo corporation for these professional costs, as well as any legal fees incurred in negotiating the agreement with the developer,” he writes.

“So if a condo corporation is faced with construction next door, it should just remember the timeless advice from negotiating guru Chester Karrass: ‘You don’t get what you deserve, you get what you negotiate,’” says De Vellis.

To Read More John De Vellis Posts Click Here
Lawyer Directory
New Media Forensics (keep up until June 30, 2019)Hexigent Consulting (to remain until August 31/19)DivorcemateFeldstein Family Law (post until May 31/19)Davidson Fraese (post until Sept. 30/19)SJO Legal Koster Consulting & AssociatesAchkar Law