IN RE: the Application of 592 Marcy Holdings (2026)

The following papers efiled on NYSCEF were used on this special proceeding: 1-45.

Upon the foregoing papers, having heard oral argument  ¹ , and due deliberation having been had, the within petition in this special proceeding pursuant to Real Property Actions and Proceedings Law ("RPAPL") § 881 to encroach on adjoining property, brought before the Court via order to show cause, is determined as follows.

Background

Petitioner 592 Marcy Holdings LLC's project is a six-story and cellar residential building at 592 Marcy Avenue, in Brooklyn. Petitioner requests to be granted a license to enter and access the adjacent property at 594 Marcy Avenue to install, maintain, and remove temporary protections in conjunction with the project. Respondent Board of Managers of the Marcy Villa Condominium ("Board") owns or controls the adjoining property at 594 Marcy Avenue. The Board controls the adjacent property's common areas including the roof and building exterior and is representing the interests of all Respondents. Respondent Emily S. Cho ("Cho") resides in Unit 1B and controls the yard adjacent to her unit where Petitioner requests that a rear-yard shed be installed. Respondents Friends of Chabad ("Chabad") and Graham Patterson ("Patterson") control the balconies (Units PH1 and PH2, respectively) on which Petitioner claims overhead protection platforms must be installed.

Petitioner requests to erect temporary protections including a temporary roof protection, a wraparound sidewalk shed, scaffolding on top of the sidewalk shed, a shed in the rear yard adjacent to Unit 1B, overhead protection platforms at the balconies of Units PH1 and PH2, and a suspended scaffold operated from the project's roof over the adjacent property's airspace. The temporary protections are needed in accordance with the New York City Building Code. Petitioner has obtained approvals and permits from the Department of Buildings to install such temporary protections.

Beginning in November 2024, the parties negotiated access to Respondents' property. Those negotiations were divided into two phases. The parties executed a Phase I license agreement, which permitted Petitioner to perform pre-construction survey work, excavation, underpinning, and related preliminary construction activities. Phase I work has since been completed.

The parties thereafter began negotiating a Phase II license agreement governing the installation and maintenance of the remaining temporary protections necessary for the continued construction of Petitioner's project. Despite continued negotiations, the parties have been unable to reach an agreement regarding the terms of the Phase II license. As a result, Petitioner commenced this special proceeding pursuant to RPAPL § 881 seeking a court-ordered license to access Respondents' property for the remaining protection work.

Issues in Dispute

The four issues in dispute relating to this special proceeding pursuant to RPAPL § 881 concern (1) licensing fees; (2) alleged existing damage and repairs; (3) professional fees; and (4) monitoring.

Analysis

I. License Fee

Petitioner alleged in its Petition that Respondents had first presented a proposed license fee of $10,000.00 per month for the first year of the project and $12,000.00 a month for the second year (see NYSCEF Doc No. 1). Petitioner presented a counterproposal of $1,500.00 per month to be allocated among the condominium and the unit owners most directly adjacent to the protection areas. Respondents revised their demand to $8,000.00 per month for winter periods and $12,000.00 per month for other periods.

Respondents contended in their affirmations in opposition to the order to show cause that Petitioner's proposed license fee of $1,500.00 should not be granted by the Court as it has not been negotiated between the parties and was unreasonable given the burden to be imposed on Respondents (see NYSCEF Doc Nos. 28, 29) Case law on the matter is clear that RPAPL § 881 proceedings are not to be utilized by a party to overreach in license agreement negotiations. Petitioner received Respondents' demand for a license fee on June 25, 2025, and should have continued to try to negotiate with the Board to proceed to Phase II, according to Respondents. Further, the Court should not award Petitioner a license fee for just $1,500.00 a month as this amount is wholly unreasonable given the burden that will be imposed on Respondents.

In oral argument held on July 1, 2026, Petitioner's counsel, Mr. Austin Fincher, Esq., conveyed to the Court that Petitioner was willing to negotiate and proposed a license fee of $2,500.00 in colder months and $3,000.00 in warmer months. The difference in rates, he contended, would make up for any limited access of the condominium tenants to the roof caused by the proposed roof protections. Mr. Fincher stated that Petitioner will need to provide roof protection for a two- or three-week period at some point, but it is not certain that such protection would necessarily remain intact during the summer. If the period of roof protection ultimately is not in the summer, Mr. Fincher indicated that Petitioner should not have to pay the elevated proposed rate for warmer months.

Mr. Fincher contends that Petitioner's proposed license fee rates are reasonable in light of the amount of intrusion on Respondents' property. He indicated that the proposed sidewalk protection would be a sidewalk shed cantilever with no posts to support it on Respondents' property, simply an overhang extending five feet over Respondents' property line, the entire height of the building, using Petitioner's building's facade for support. Furthermore, Respondent Cho would not lose access to her backyard due to the temporary protections. Respondents Chabad and Patterson would require overhead protection only during the short window period in which roof protections would be installed. The remainder of the balconies will be protected by a netted scaffolding affixed to Petitioner's pipe scaffolding — not on the balconies, obstructing only their side view.

In the same oral argument, Respondents' counsel Mr. Andrew Troia, Esq., indicated that Respondents are continuing to propose a license fee of $10,000.00 in the warmer months, $8,000.00 in the colder months, and $12,000.00 a month if the construction continues through March of 2028. Mr. Troia contended that the requested protections are extensive — a sidewalk shed in the front of the property, backyard protections that will render it mostly inaccessible, protections that will impact all balconies, and rooftop protections that will prevent access to it, especially by children. Furthermore, there is no verification that Petitioner's proposed timeline of two to three weeks for the rooftop protections will be accurate. Respondents requested a detailed construction schedule from Petitioner as the license fee depends on at what time and for how long the protections will remain. Furthermore, Respondents requested architectural renditions. Although Respondents' filings indicated that negotiation with Petitioner was preferred to judicial intervention, Mr.Troia indicated that Respondents want the Court to decide.

Section 881 of RPAPL provides that:

When a licensee seeks to make improvements or repairs to real property so situated that such improvements or repairs cannot be made by the licensee in a commercially reasonable manner without entering the premises of an adjoining owner, other than a state entity, and permission so to enter has been refused, the licensee may commence a special proceeding for a license so to enter pursuant to article four of the civil practice law and rules. . . . Such license shall be granted by the court in an appropriate case and upon such other terms as justice requires. The licensee shall be liable to the adjoining owner for actual damages occurring as a result of the entry.

Under RPAPL § 881, courts have broad discretion to award fees to the respondent compelled to grant access to their property. "This discretion is grounded in equity: a property owner who is forced to accommodate a neighboring development neither seeks out the intrusion nor benefits from it, and therefore should not bear the associated costs" (Matter of Bergen St Equity LLC v 259 Wyckoff Assoc. LLC, 88 Misc 3d 1248[A]; 2026 NY Slip Op 50474[U], *3 [Sup Ct, Kings County 2026]). In awarding license fees, courts must balance the equity of the fee and whether the fees are balanced and proportional (see generally Matter of North 7-8 Invs., LLC v Newgarden, 43 Misc 3d 623 [Sup Ct, Kings County 2014]). Pursuant to RPAPL § 881, a license shall be granted as justice requires. Here, these terms can extend to the "nature and extent of access that is necessary, the duration such access may be necessary, as well as what protections may be necessary to safeguard the adjoining owner's property" (id. at 627). The court will apply a standard of reasonableness in balancing the potential hardship for the respondent if the petitioner's access to the adjoining property is granted (see Matter of Queens Theater Owner, LLC v WR Universal, LLC, 192 AD3d 690, 690 [2d Dept 2021]). Furthermore, a court will take into account public policy as a factor determining the adjudication of an RPAPL § 881 proceeding (see Matter of Huggins v Villegas, 87 Misc 3d 1230[A]; 2025 Slip Op 51743[U] [Sup Ct, Kings County 2025]). Here, the Court considers the public policy of not mandating a license fee that may be too excessive and discourage future development of real property.

In the case at hand, it appears to the Court that Respondents' requests are not reasonable. However, Petitioner's offers are too minimal considering the intrusion of the project premises onto the adjourning property. The scope and complexity of the case at hand requires a reasonable and equitable licensing fee to compensate Respondents, especially the occupants of 594 Marcy Avenue, for the general inconvenience and limited use of their property during construction. Therefore, the case at hand is more complex and intrusive than the circumstances in Matter of North 7-8 Invs. LLC (43 Misc 3d 623 [court found a license fee of $3,500.00 per month reasonable and equitable considering the intrusive circumstances and impact of respondent's use and enjoyment of their property]) and Matter of Rosma Dev., LLC v South (5 Misc 3d 1014[A], 2004 NY Slip Op 51369[U] [Sup Ct, Kings County 2004] [court found $2,500.00 per month reasonable where certain protections including erection of sidewalk bridging extended ten feet onto the sidewalk of respondents' property]).

Here, the situation requires a licensing fee that is greater than the fees described above. However, Respondents' demand of $8,000.00-$12,000.00 per month, depending on the season, is neither equitable nor reasonable considering the circumstances. Although the complexity of the matter at issue is greater than what was described in Matter of North 7-8 Invs. LLC and Matter of Rosma Dev., LLC, the intrusions by Petitioner do not warrant a licensing fee in this amounts demanded by Respondents. However, the Court recognizes that the adjacent premises are faced with inconvenience to the property, as well as the general inconvenience of construction, and, therefore, the Court acknowledges that Respondents must be compensated for this. Although Petitioner contends that the protected areas of the property will still be useable, these protections will significantly interfere with Respondents' intended use and enjoyment of the affected areas.

Alternatively, the scope and complexity of the case at hand greatly exceeds the circumstances in Ponito Residence LLC v 12th St. Apt. Corp, 38 Misc 3d 604 [Sup Ct, NY County 2012] [court held a license fee of $1,500.00 per month to be reasonable to maintain a sidewalk shed extending 20 feet onto the adjacent property]) and MK Realty Holding LLC v Scneider, 39 Misc 3d 1209[A], 2013 NY Slip Op 50551[U] [court found a license fee of $1,000.00 to be reasonable for erection of scaffolding on the adjacent property for 15 consecutive weekdays]). Under the circumstances, the intrusion onto the adjacent premises does not align as closely to either Ponito Residence LLC or MK Realty Holding LLC. In these prior cases, the intrusions were minimal and temporary. Although Petitioner acknowledges that the roof protection is a temporary installation, the other protections are not insignificant. These protections could have a potential impact on the building's residents, amidst a large construction site. Therefore, the license fee shall be greater than the licensing fees described above to help compensate the affected premises and occupants.

Here, the Court directs that Petitioner pay $5,000.00 per month for a one-year period, beginning when the first protection is installed. This fee of $5,000.00 per month applies only if the roof protection is present for 30 days or less. If the roof protection extends beyond 30 days, an additional amount of $1,000.00 per month must be paid, i.e., $6,000.00 per month until the roof protection is removed. Once the roof protection is removed, the fee shall revert to $5,000.00 per month. The foregoing applies to the first year. Additionally, if the protections exceed one year, an additional $1,000.00 per month must be paid, i.e., $6,000.00 per month, assuming that the roof protection was removed, or $7,000.00 per month if the roof protection has not yet been removed. The license shall expire at the end of two years following the first protection being installed. In imposing these license fees, the Court takes into account that there is great demand to live in the subject area in Brooklyn — Bedford-Stuyvesant — and, therefore, the enjoyment of the occupants residing at 594 Marcy Avenue should not be disturbed without sufficient compensation.

II. Existing Damage Repairs

Respondents contended in their opposition papers that Petitioner failed to perform its contractual obligations pursuant to the Phase I agreement, including failure to perform repairs to extensive damage caused by Petitioner's construction activities during Phase I. Petitioner was made aware of such property damage by Respondents (see NYSCEF Doc No. 32). The expert reports submitted by Respondents opined that the following conditions existed: damage to the Exterior Insulation and Finish System ("EIFS") system, a noticeable shifting of pavers on the ground at the entrance of the property, a crack observed along the ground level floor, floor tiles sloped toward the wall due to recent underpinning activities, and soil erosion in the backyard (see NYSCEF Doc Nos. 37, 39, 40). Under the Phase I Agreement, Petitioner is responsible for repairing damage upon 10 days' notice but to date, Petitioner has not undertaken the repair work (see NYSCEF Doc No. 9 ¶ 10 [A]). Therefore, Respondents argue that Petitioner should not be granted a license to enter Respondents' property for Phase II until it fully performs under the Phase 1 contract and remediates the property damages.

Petitioner's filings are notably deficient in responding to Respondents' assertions of claimed damages.

At oral argument, Mr. Fincher stated that Petitioner has acknowledged and taken responsibility for certain damages to Respondents' property. Petitioner agreed to fix the cracked pavers; however, it proposed to do so after Phase II was completed as the pavers will likely be damaged again during construction. With regard to the sloping floor tiles, Petitioner requests to inspect the damages in Unit 1B to determine whether it is responsible for same. Petitioner points to other actions from unit owners against the developer of the building for similar damages. An inspection of the tiles will reveal whether the damage is superficial or whether it is indicative of greater structural damage. As for Unit 2A's misalignment, Petitioner also requests access for inspection. The soil erosion was caused by water damage from Petitioner's construction, which Petitioner takes accountability for. Petitioner proposed to waterproof the wall between the adjoining properties so that water will not seep into the building and disturb the foundation of Respondents' building. Petitioner requests that the Court allow it to move forward with Phase II and not hold up the progression of the project over these matters.

Mr. Troia contended that the damage caused to the pavers (as depicted in the photo below) is a tripping hazard and must be fixed as soon as possible. The pavers are located in the front walkway up to the condominium building and, as such, pose a danger to whoever enters or exits the building. Moreover, Petitioner's proposal to waterproof the wall is not sufficient to prevent further damage. Unit 1B has been severely damaged. Inspection is needed to determine whether there is structural damage, which cannot be accomplished without removing the tiles, mandating building supervision and displacement of the occupant. Mr. Troia indicated that there was a pre-construction survey conducted which demonstrated that there were no cracks in the tiles before Phase I commenced. If the investigation reveals that there was damage to the underlying slab, major repairs will be necessary. The damage in Unit 2A is minimal as just plastering and painting is needed for repairing same. Respondents object to Petitioner's contention that it should be allowed to bring in its own experts for inspection as under the Phase I agreement, the parties agreed that Petitioner would fix any damages caused by their construction and not that Petitioner can inspect. Respondents urge the Court to deny Petitioner access to move forward with Phase II unless all the alleged damages are repaired.

This Court in Matter of Boerum Hill Prop. Holdings, LLC v 159 Smith, LLC (85 Misc 3d 1266[A], 2025 NY Slip Op 50647[U] [Sup Ct, Kings County 2025]) addressed the issue of damages caused by the petitioner to the respondent's property. In that special proceeding, petitioner Boerum Hill Property Holdings, LLC had drilled tie rods into respondent 159 Smith, LLC's building wall without permission during earlier construction work. The respondent claimed that this caused water damage to its property. The respondent's expert testified that the tie rods should be removed to avoid compromising the structure. The petitioner did not submit a plan for removing the tie rods as part of its RPAPL § 881 license application. The Court noted that in that special proceeding, "it is not [the Court's] burden to determine whether Petitioner's pre-special proceeding construction work proximately caused damage to Respondent's property in the nature of water intrusion. . . . The Court is charged here solely with determining whether Petitioner's plans, as submitted, warrant a license to encroach on Respondent's property. Considering that the plans, as submitted and if implemented, would result in a permanent encroachment which might cause seepage of water, the Court cannot approve them." (Matter of Boerum Hill Prop. Holdings, LLC, 2025 NY Slip Op 50647[U], *8-9.)

Petitioner is compelled to repair the pavers immediately; this is an imperative safety concern due to people entering and exiting Respondents' building. Petitioner is directed to repair the damages to the EIFS on an ongoing basis as Petitioner's building rises. The costs of Respondents' engineer to monitor the repair is to be borne by Petitioner but it must be reasonable and if any disputes arise, they may be resolved via an application to the Court. As for Unit 1B, Petitioner and Respondents are directed to collectively inspect the internal damages by August 14, 2026. As for the rear yard of 1B, Petitioner and Respondents are directed to repair the ground before the protection is installed in the rear yard. Regarding the damage to Unit 2A — the cracks and misaligned door — Petitioner is directed to repair it by August 31, 2026. Respondents' architect or engineer shall invoice for the services in inspecting and reviewing the locations where there was alleged damage and Petitioner shall reimburse Respondents for said billing provided that it is reasonable. Any further disputes can be raised with the Court.

III. Professional Fees

With respect to professional fees, the Court will consider the conduct of the parties and if the fees were reasonably incurred (see Matter of Bergen St Equity LLC, 2026 NY Slip Op 50474[U]). Similarly, with respect to attorney's fees, the Court must decide what is reasonable, based on a variety of factors, including but not limited to, "time, labor, difficulty, experience of attorneys, and results achieved" (id., * 3, quoting DDG Warren LLC v Assouline Ritz 1, LLC, 2016 NY Misc. LEXIS 5245, *8 [Sup Ct, NY County Apr. 22, 2016, No. 654425/2013]).

There was a misunderstanding between the parties over who bears the responsibility of the professional fees. Respondents contend that Petitioner is obligated under Paragraph 4 (A) of the Phase I agreement to pay outstanding post-execution professional fees incurred by Troia & Associates and Rock Architecture, including fees allegedly incurred in connection with monitoring, review, enforcement, and claimed damage issues. Petitioner maintains that Respondents' counsel and architect were paid for the negotiation and review associated with the agreements and plans.

Through the end of April 2025, Respondent claims that they billed the following professional fees: for the legal fees from Troia & Associates, the invoice totaled $8,258.44 (see NYSCEF Doc No. 30); for the architect/engineering fees from Rock Arch Eng Corp., the total invoice was $15,167.50 (see NYSCEF Doc No. 36). Respondent claims that the legal fees are estimated to increase by up to $10,500.00.

In this dispute over professional fees, the dispute derives from a misunderstanding regarding the responsibility of each party during Phase I of the building. Here, the Court resolves this and finds that the fees are the responsibility of Petitioner.

IV. Monitoring

There was a dispute over the monitoring of the construction, regarding potential cracks and/or displacement on the property. Respondents contend that specifications for the crack and displacement monitoring equipment to be installed on Respondents' property must be submitted for Respondents' architect's review and approval. Petitioner contends that they will install crack gauges at all identified cracks before the installation of the temporary protections.

During argument, it was averred by Petitioner that only crack and optical monitors were necessary as vibration monitoring was concluded during Phase I of the development. Thus, at the hearing, this issue was basically resolved whereby the crack and optical monitors shall be placed in necessary locations. The Court directs that Respondents' engineer shall inspect the installation and invoice a reasonable amount. Petitioner shall reimburse for the services billed by Respondents' architect or engineer in inspecting and reviewing the locations where there was alleged damage. Petitioner is hereby also directed to provide vibration monitoring reports from Phase I of the project to Respondents.

Conclusion

It is hereby ORDERED that the parties shall jointly submit a proposed order to the Court for its consideration, reflecting the above determinations of the Court.

FOOTNOTES

FOOTNOTE.  

1.   Transcripts may be procured from the court reporter (see Matter of Lewandowski v Office of Ct. Admin., 173 Misc 2d 335 [Sup Ct, Albany County 1997]).

Aaron D. Maslow, J.* FN* This Court acknowledges the assistance of Maxine Como, judicial intern and second year student at Cardozo School of Law, and Mackenzie Callahan, judicial intern and third year student at New York Law School, in the preparation of this decision.