Crossing the (Property) Line Part Three: Implications of the December 2025 Amendments to RPAPL § 881 and New § 882

Introduction

On December 5, 2025, Governor Hochul signed into law an amended RPAPL § 881 statute (the "2025 Amended Statute"). We previously addressed this proposed amendment in two articles, the first published in a 2024 issue of the N.Y. Real Property Law Journal, and the second was a 2025 Venable LLP client alert.^[1] Now that the 2025 Amended Statute is law after going through the rigorous legislative review process, this is an overview of the final iteration of the statute, including a new section for severability, codified as RPAPL § 882.

RPAPL § 881 addresses the all too common New York City construction scenario where a project abuts adjoining properties, and the project owner is mandated by the NYC DOB to access those properties to install protections.

The text of the 2025 Amended Statute provides many specifics that the original, brief RPAPL § 881 lacked. These details address many issues that previously were determined only by courts interpreting the statute. Both developers and adjoining owners should take note of the amendments as they negotiate license agreements moving forward in this changed landscape.

The Revised Text and Implications

Below are several key aspects of the 2025 Amended Statute:

1. The Term "Refuse." The 2025 Amended Statute defines the terms "refuse," "refusal," or "refused" as: "shall be deemed to include instances where more than one written notice has been served by certified mail, on the owner and has not been responded to within sixty days." (Emphasis added).

Both the original RPAPL § 881 and the 2025 Amended Statute require, as a prerequisite for applying for judicial relief, that the constructing party request access from the adjoining owner and that that request be refused. However, the original statute did not define the word "refuse," or whether, and when, an adjoining owner's failure to respond to such a request constitutes "refusal." The 2025 Amended Statute sets forth criteria for this scenario, but in doing so, may have created both logistical and temporal hurdles resulting in a greater burden for the party seeking access. As set forth above, there is now a codified requirement to transmit "more than one" certified mail demand and then wait 60 days for response. If none is received, then the criterion is satisfied, and judicial intervention can be sought. The resulting delay of this process could cause significant harm to a party with an immediate need to perform remedial and/or repair exterior work, such as Local Law 11 (FISP) work. In addition, it imposes an automatic two months' delay for the constructing party to apply to court for access, a special proceeding that itself takes weeks, usually months, before obtaining a judicial ruling.

In addition, this amendment does not address the common scenario where an adjoining owner "responds," but interposes excessive, unreasonable monetary and other demands as a condition to permit the requested access—conduct that is tantamount to "refusal."

It is hoped that the statute's lack of guidance on this critical issue will be clarified by the courts. The amendment's use of the phrase "shall be deemed to include" could be interpreted to indicate that the prescriptive language is not to be considered exhaustive and thereby permit judges to define "refusal" in a way that makes sense under the circumstances unique to each case.

2. Work for Which Courts May Authorize Access. The 2025 Amended Statute includes for the first time a non-exhaustive list of items for which a constructing party may seek access to an adjoining property. The most notable of these is codified at section 3(b)(v), which reads "where required by code, regulation or local law, any necessary foundation or building supports, including, wall ties, tie-backs, anchors, straps and underpinning, for any demolition, new or existing improvements on the premises of the licensee or adjoining owner, including, party walls." (Emphasis added).

The original RPAPL § 881 statute did not set forth the types of protections and other items for which constructing parties could request access, instead stating that the court may grant access "upon such terms as justice requires." Given the leeway that that vague standard allows, courts have permitted access for all sorts of protections and other items reasonably sought by construction parties. However, courts have not permitted permanent encroachments on an adjoining property, such as underpinning, tiebacks, and other items that would remain on the adjoining property after the construction project had been completed. The 2025 Amended Statute now empowers the courts to do so, but the extent of that power is left unclear with the inclusion of the words "where required by code, regulation or local law." Certain support of excavation, such as underpinning, is not necessarily required by code, regulation, or local law, yet is critical for a developer's project. Code and statutory requirements come into play only because of a developer's specific design of its building when taking into consideration the proximity to its neighbor and the composition of the ground soil. The amendment leaves it unclear as to whether a developer will be entitled to exercise the full measure of its property development rights, even if an alternative design would negate the need for certain support of excavation, such as underpinning.

3. Extending the License Term. The 2025 Amended Statute modifies the developer's obligation to adhere to the duration of the license term. If the developer requires additional time, it must "make a request to the court for an extension of such license." (Emphasis added).

By making the constructing party obligated to seek judicial relief to extend the duration of its license to access the adjoining property (the license term), this amendment provision appears to be aimed at incentivizing developers to adhere to their originally anticipated construction timelines while still providing a remedy in the event more time is needed. However, mandating a request for an extended license term via the court will certainly create a potential for additional project delays, thereby adversely affecting both the developer and the adjoining owner(s). Developers should carefully consider this implication when negotiating license agreements and therefore be conservative in estimating their construction schedules for purposes of the negotiated license term.

4. License Fee. The 2025 Amended Statute modifies the compensation requirements to expressly state that the developer "shall be required to reasonably compensate the adjoining owner for the loss of use and enjoyment of the adjoining premises including diminution in value." (Emphasis added).

The original RPAPL § 881 statute did not provide for the payment of a license fee to the adjoining property owner for granting the access requested. However, in interpreting the statute as "equitable" because of its "as justice requires" language, the courts have routinely awarded license fees to neighbors for the intrusion on their properties. The amendment appears to be aimed at codifying what courts have already done and potentially increasing the compensation measure, by adding diminution in property value as a recognized basis for a fee. This addition may also encourage adjoining property owners to seek lost rent, although that is not mentioned in the amendment. As is true for much else that is new here, we will not know the full effect of this change until courts begin applying the new standards, except to note that the implications could be significant.

5. Reimbursement for Professional Fees. The 2025 Amended Statute provides the court with the power to "obligate the licensee to reimburse the adjoining owner for reasonable fees incurred in connection with the review of relevant documents for the installation, maintenance, inspection, repair, replacement or removal of devices, structures, materials or equipment on the adjoining property." (Emphasis added).

This amendment essentially codifies prior case law interpreting the original RPAPL § 881 statute awarding adjoining owners reasonable professional fees—including attorneys' and engineer's fees—incurred in the negotiation of a license agreement. This has been justified on the ground that the adjoining owner "has not sought out the intrusion and does not derive any benefit from it . . . Equity requires that the owner compelled to grant access should not have to bear any costs resulting from the access."^[2]

Significantly, there is no specific reference to reimbursement for attorneys' fees in this amendment, whereas such fee reimbursement was included in an earlier iteration of the draft amendment. Nevertheless, given the equitable nature of the statute and its general provision for professional fee reimbursement, we anticipate that courts will continue to award adjoining owners reasonable attorneys' fees in connection with the negotiation of a license agreement. However, the statute's silence on the issue may present a defense, at least initially, for the constructing parties. One method of ensuring such reimbursement of attorneys' fees is to get the constructing party's agreement to reimburse such fees in advance of negotiations on any access agreement.

6. Relocation or Extension of Chimneys and Flues. The 2025 Amended Statute permits "Temporary or at the licensee's sole option permanent relocation, extension or offsetting of any chimneys, vents, flues, exhausts or other rooftop equipment on the adjoining property, as required by applicable law…". (Emphasis added).

In certain instances, the NYC Mechanical Code requires that chimneys, flues, and similar fixtures on existing buildings be relocated or extended when a new/higher building is being constructed close by.^[3] This was yet another issue that was not addressed by the original RPAPL § 881 statute, leaving courts with the task of approving or refusing such requests. Many courts were unsure how to respond, since these relocations or extensions could be considered permanent improvements. The amendment now addresses this in an interesting way by always permitting "temporary" modifications but restricting permanent modifications to be at "licensee's sole option." This should foster negotiation between the parties, since installation of a temporary flue extension or relocation will inevitably require a future modification to render it permanent. Typically, the constructing party is a developer that will not be around once the project is completed, leaving the neighbor with the expense, so it would be prudent to negotiate a permanent solution up front.

7. MTA Property Exempted. The 2025 Amended Statute exempts the MTA and its affiliates from RPAPL § 881, providing instead that "the court shall not grant a license" when the MTA owns, leases, or occupies the property in question. (Emphasis added). This presents a problem for developers who wish to build adjacent to MTA properties and must now be considered before the initial property acquisition phase of any project.

Key Takeaways

The most significant overarching change is the empowerment to the courts to grant access for the installation of permanent encroachments, such as underpinning, tiebacks, flue extensions, and weatherproofing. Adjoining owners have lost some leverage they previously had in negotiations when they could rely on the developer's inability to get such relief from a court. To the contrary, the amendment is vague with respect to whether a developer may exercise the full measure of its rights, or if a court will order a design modification to minimize the impact on the adjoining property in this respect. This portion of the amendment may also result in certain constitutional challenges, which is likely the reason behind the Legislature's decision to add RPAPL § 882 (severability), providing that where any section of the 2025 Amened Statute is deemed invalid, the remainder will remain in effect.^[4]

Also of importance is the new concept of compensation for diminution in value of an adjoining owner's property. This change may lead to "battles of experts" to determine the proper amount to ascribe to such diminution and could thereby increase the length and expense of RPAPL § 881 proceedings—the costs of which neither party may be entitled to reimbursement for under the amendment.

The 2025 Amended Statute provides neither party with a right to recover reasonable attorneys' fees in the event of bad faith by either party during the negotiation process. This was a concept that many proponents of the amendment (especially the constructing parties) desired in order to eliminate unreasonable neighbor demands for fees. This omission of an attorneys' fee award for bad faith or misconduct "in seeking, denying, or conditioning [a party's] approval of the rights of entry" will leave this determination entirely to the discretion of the courts. Courts in the First and Second Appellate Divisions have granted attorneys' fees where one party has acted in bad faith by refusing to negotiate a license agreement. See, e.g., 419 BR Partners LLC v. Zabar, No. 156089/2022, 2023 N.Y. Misc. LEXIS 22 (Sup. Ct. N.Y. Cnty. 2023); Matter of AIH Group LLC v. C.J.F. & Sons Enters. Inc., No. 339/2019, 2019 N.Y. Misc. LEXI 2686 (Sup. Ct. Queens Cnty. 2019). However, the courts have more often denied such relief in these proceedings.

For assistance with analyzing these project requirements, please contact Brian Lustbader, Russell Wolfson, Katherine Peluso, or any of the other attorneys in our New York Construction Law Group.

* * * * *

Venable LLP offers a broad array of legal services to a variety of different players within the construction arena. Our attorneys are adept at understanding complex client issues and tapping into the extensive experience of our many practice areas, including construction contract drafting, construction defect and delay disputes, employment disputes arising out of construction projects, state-specific incentives, and requirements for construction projects.