Requires developers to deposit a portion of the total estimated project cost into an escrow account for damage caused to neighboring properties during construction

BILL NUMBER:S991

Title of bill

An act to amend the administrative code of the city of New York, in relation to establishing escrow accounts to protect neighboring landowners and tenants from damage due to construction

General idea of bill

Requires developers to deposit a portion of the total estimated project cost into an escrow account for damage caused to neighboring properties during construction.

Summary of specific provisions

The Administrative Code of the City of New York is amended by adding a new section 28103.21 and a new section 28-201.5

Justification

This legislation seeks to address a serious problem affecting long standing property owners whose property is damaged by contractors building on adjacent property in the City of New York. Currently, if a developer or contractor is working on property adjacent to or near an existing parcel and damages the existing property, the owner of the existing damaged building is held liable for correcting any resulting violations to his/her property. Often the New York City Buildings Department, when called to intervene in such disputes, cites the property owner-whose property was damaged by the contractor-for building code violations despite the fact that the damage was entirely caused by the contractor operating under a permit issued by the Buildings Department. The innocent property owner often gets violations requiring the payment of fines and may have to vacate his/her property until the damage is corrected sometimes at great expense. The innocent owner will likely not recover damages. Instead, he/she expends large sums of money on legal fees incurred in a long drawn-out civil suit.

This legislation will require every developer to pay into an escrow account which would be used for "quick claims" by injured parties, and would create a system of processing these quick claims to allow injured parties, property owners or tenants, to be made whole by negligent contractors in a timely manner.

This legislation will also prohibit the Buildings Department from issuing fines to property owners who have been victimized by the negligence of those working on adjacent properties. If damages occur to an adjoining property, any and all work on such project will be stopped until the damage property is repaired by the developer.

Prior legislative history

First introduced in Senate in 2010. First introduced in Assembly in 2006.

Fiscal implications for state and local governments

None to the State.

Effective date

Ninety days after it shall have become a law.