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.