S T A T E O F N E W Y O R K
________________________________________________________________________
8710
2019-2020 Regular Sessions
I N A S S E M B L Y
October 23, 2019
___________
Introduced by M. of A. LENTOL -- read once and referred to the Committee
on Housing
AN ACT to amend the administrative code of the city of New York, in
relation to establishing escrow accounts to protect property owners
and their tenants from damages resulting from construction on adjoin-
ing property
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The administrative code of the city of New York is amended
by adding a new section 28-103.34.1 to read as follows:
§ 28-103.34.1 DEVELOPERS' ESCROW ACCOUNTS. 1. DEFINITIONS. AS USED IN
THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
ADJOINING OWNER. AN OWNER OF PROPERTY WHERE:
(I) SUCH PROPERTY SHARES A PROPERTY LINE WITH A DEVELOPER'S PROPERTY;
OR
(II) SUCH PROPERTY IS A HISTORIC PROPERTY WITHIN A LATERAL DISTANCE OF
NINETY FEET FROM A DEVELOPER'S PROPERTY LINE.
DEVELOPER. ANY INDIVIDUAL OR ENTITY FILING FOR A PERMIT FROM THE
DEPARTMENT OF BUILDINGS.
2. ANY DEVELOPER FILING PLANS FOR A PERMIT WITH THE DEPARTMENT OF
BUILDINGS FOR THE CONSTRUCTION OF A NEW BUILDING, DEMOLITION OF AN
EXISTING BUILDING, OR ALTERATION OF AN EXISTING BUILDING THAT INCLUDES
UNDERPINNING, EARTH MOVEMENT, EXCAVATION WITHIN FIVE TO TEN FEET OF A
PROPERTY LINE, AND/OR EXCAVATION TO A DEPTH OF OVER TEN FEET, SHALL,
PRIOR TO THE DEPARTMENT'S GRANT OF ANY PERMIT FOR SUCH ACTIVITY, DEPOSIT
IN AN ESCROW ACCOUNT AN AMOUNT OF AT LEAST TWENTY THOUSAND DOLLARS
MULTIPLIED BY THE NUMBER OF ADJOINING OWNERS TO SUCH DEVELOPER'S PROPER-
TY. THE MONEY DEPOSITED INTO SUCH ESCROW ACCOUNT SHALL BE USED ONLY FOR
THE PAYMENT OF ANY ADJOINING OWNERS' LEGAL AND ENGINEERING FEES RESULT-
ING FROM THE NEGOTIATION OF A LICENSE AGREEMENT BETWEEN ADJOINING OWNERS
AND SUCH DEVELOPER, AND/OR FOR THE PAYMENT OF SUCH ADJOINING OWNERS'
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD13959-01-9
A. 8710 2
LEGAL FEES RESULTING FROM A PROCEEDING BROUGHT PURSUANT TO SECTION EIGHT
HUNDRED EIGHTY-ONE OF THE REAL PROPERTY ACTIONS AND PROCEEDINGS LAW. THE
DEPARTMENT SHALL NOT ISSUE A BUILDING PERMIT FOR ANY DEVELOPER UNLESS
AND UNTIL SUCH DEVELOPER PROVIDES THE DEPARTMENT WITH (I) WRITTEN PROOF
OF SUCH DEPOSITS INTO SUCH ESCROW ACCOUNT; AND (II) A MAP OF SUCH DEVEL-
OPER'S PROPERTY INCLUDING ALL ADJOINING OWNERS WITH THE ADDRESS OF EACH
SUCH ADJOINING OWNER LABELED.
3. A DEVELOPER DEPOSITING MONEY INTO AN ESCROW ACCOUNT PURSUANT TO
SUBDIVISION TWO OF THIS SECTION, SHALL DEPOSIT INTO A SEPARATE ESCROW
ACCOUNT, A DOLLAR AMOUNT OF AT LEAST FIFTEEN PERCENT OF THE TOTAL ESTI-
MATED COST OF THE PROJECT FOR WHICH SUCH DEVELOPER HAS FILED FOR A
PERMIT. THE MONEY DEPOSITED INTO ESCROW PURSUANT TO THIS SUBDIVISION
SHALL BE FOR THE PURPOSE OF:
(I) PAYING ANY LEGAL FEES INCURRED BY ADJOINING OWNERS IN THE COURSE
OF LITIGATION WITH SUCH DEVELOPER RESULTING FROM DAMAGES TO SUCH ADJOIN-
ING OWNER'S PROPERTY, WHERE SUCH DEVELOPER IS FOUND TO BE AT FAULT FOR
SUCH DAMAGES;
(II) TO COVER THE COSTS OF ANY ACTUAL DAMAGES TO ADJOINING OWNERS'
PROPERTY CAUSED BY SUCH DEVELOPER; AND/OR
(III) ANY RELOCATION COSTS INCURRED BY TENANTS OF AN ADJOINING OWNER'S
PROPERTY WHO ARE DISPLACED DUE TO DAMAGES TO SUCH ADJOINING OWNER'S
PROPERTY CAUSED BY SUCH DEVELOPER.
4. ANY ESCROW ACCOUNTS CREATED PURSUANT TO SUBDIVISION TWO OR THREE OF
THIS SECTION SHALL BE ADMINISTERED BY THE OFFICE OF THE NEW YORK CITY
COMPTROLLER.
5. WHERE THE PROPERTY OF ANY ADJACENT OWNER IS DAMAGED BY CONSTRUCTION
CONDUCTED BY A DEVELOPER, THE DEPARTMENT OF BUILDINGS SHALL IMMEDIATELY
ISSUE A STOP WORK ORDER TO SUCH DEVELOPER UPON NOTIFICATION OF SUCH
DAMAGES BY SUCH ADJACENT OWNER OR DEVELOPER. SUCH DEVELOPER WHO HAS BEEN
ISSUED A STOP WORK ORDER SHALL CREATE AND SUBMIT TO THE DEPARTMENT AND
TO SUCH ADJOINING OWNER'S ENGINEER, A PLAN FOR MITIGATION OF DAMAGES.
SUCH DEVELOPER SHALL NOT RESUME CONSTRUCTION UNTIL SUCH DEVELOPER HAS
RECEIVED FROM THE DEPARTMENT AND FROM SUCH ADJOINING OWNER'S ENGINEER
APPROVALS TO RESUME CONSTRUCTION, IN WRITING ON THE LETTERHEADS OF EACH,
WHICH SHALL BE PROVIDED TO SUCH ADJOINING OWNER AND DEVELOPER WITHIN
THREE DAYS OF THEIR EXECUTION.
6. THE OFFICE OF THE NEW YORK CITY COMPTROLLER SHALL ESTABLISH A
PROCEDURE FOR ADJOINING OWNERS AND TENANTS WHO WISH TO FILE CLAIMS
AGAINST THE FUNDS SET ASIDE PURSUANT TO THIS SECTION. SUCH PROCEDURE
SHALL PROVIDE FOR A COMPLETE RESOLUTION OF SUCH CLAIMS WITHIN SIXTY DAYS
FROM THE DATE OF THEIR COMMENCEMENT.
7. ANY FUNDS DEPOSITED BY A DEVELOPER INTO AN ESCROW ACCOUNT PURSUANT
TO SUBDIVISION TWO OR THREE OF THIS SECTION THAT ARE NOT CLAIMED BY AN
AGGRIEVED ADJOINING OWNER OR TENANT WITHIN SIX MONTHS AFTER THE DEPART-
MENT CERTIFIES THE COMPLETION OF SUCH DEVELOPER'S PROJECT SHALL BE
RETURNED TO SUCH DEVELOPER.
8. THE EXISTENCE AND ADMINISTRATION OF, AND DISBURSEMENTS FROM, THE
ESCROW FUNDS DEPOSITED BY A DEVELOPER PURSUANT TO SUBDIVISION TWO OR
THREE OF THIS SECTION SHALL REMAIN UNEFFECTED BY SUCH DEVELOPER'S DECLA-
RATION OF BANKRUPTCY AND/OR ASSIGNMENT OF ASSETS TO ANY OTHER INDIVIDUAL
OR ENTITY.
9. THE DEPARTMENT SHALL NOT IMPOSE ANY FINE OR OTHER PENALTY AGAINST
ANY ADJOINING OWNER, FOR ANY VIOLATION OF THE PROVISIONS OF THIS TITLE
THAT OCCUR AS A RESULT OF DAMAGES CAUSED BY A DEVELOPER'S ACTIVITIES
WHICH VIOLATE THIS SECTION.
A. 8710 3
§ 2. This act shall take effect on the nineteenth day after it shall
have become a law. Effective immediately, the addition, amendment
and/or repeal of any rule or regulation necessary for the implementation
of this act on its effective date are authorized to be made and
completed on or before such effective date.