Real Property Law

Supreme Ct., Bronx Cty

(Victor, J.)

In an action by a homeowner to enjoin construction on neighboring land, the homeowner sought a preliminary injunction. The court denied the motion, holding that because the homeowner alleged that her home was already a total loss, she would not suffer any additional loss from continuing construction.

Land adjacent to the homeowner's dwelling had been owned by the city until the city conveyed it to a non-profit corporation which then began construction on an urban renewal project consisting of 14 two-family homes. The homeowner contends that construction of two-family homes on either side of her dwelling caused major settlement of the home, leading to leaks and cracks. The homeowner's engineer submitted an affidavit indicating, “with reasonable engineering certainty” that the homeowner's building should be removed and replaced with a new building. The engineer's affidavit contends that the settling was the result of lack of underpinning of the structure. On the basis of the affidavit, the homeowner sought a preliminary injunction against further construction.

In denying the homeowner's motion, the court conceded that an owner of land has a right to lateral support both of the owner's land and of the structures located on the land.

But the court also noted that the city and other defendants conceded a duty to provide support, but contended that no need for underpinning had come into being. The court concluded that the homeowner had not demonstrated a likelihood of success on the merits, and had not demonstrated any irreparable injury in light of the engineer's conclusion that the house would have to be replaced in any event.

COMMENT

Property owners in the City of New York, engaged in the excavation of their land to a depth in excess of 10 feet, must provide adequate protections to safeguard against damage to a building on adjoining property resulting from a loss of lateral support. N.Y.C. Admin. Code ” 27-1028, 27-1031(b)(1) (formerly ' C26-385.0); compare ' 27-1031(b)(2) (excavation of 10 feet or less does not create this duty, instead requiring adjoining property owners to take their own precautions against potential damage). The ordinance imposes liability on an excavating party that fails to take adequate preliminary precautions to protect against damage to an adjoining structure. Victor A. Harder Realty & Construction Co. v. City of New York, 64 N.Y.S.2d 310, 318 (city failed to provide support for an adjacent building and was held liable for repairs proximately caused by the lack of adequate protection, because nonconformance with the ordinance creates tort liability with the “same force and effect as a statute”).

To establish liability, the party seeking recovery for damages must prove a causal relationship between the excavation and the damage to its building. Victor A. Harder Realty, 64 N.Y.S.2d at 318 (factual inquiry established that defendant's activities were the proximate cause of the injuries to plaintiff's house); Coronet Properties Co. v. L/M Second Avenue, Inc, 166 A.D.2d 242, 243 (requiring a finding of proximate cause before assessment of liability under '27-1031). This fact-finding generally precludes summary judgment, because a necessary inquiry involves an assessment of the building condition both prior to the excavation work and after the alleged loss of lateral support. Coronet Properties Co., 166 A.D.2d at 243 (once evidence is provided that the excavating party did not comply with the ordinance, a factual inquiry is needed in order to rule out other possible causes of the damage). The excavating owner's liability extends to adjoining property owners, which are defined liberally to include any properties “near” or “in close proximity” to the excavation, as well as “likely to be affected” by the loss of lateral support. Victor A. Harder Realty, 64 N.Y.S.2d at 318-19 (interpreting a City of New York ordinance to provide that a building located across a municipal street and 50 feet from the excavation site is on 'adjoining' property); compare, Kimberly-Clark Corp. v. Power Authority of New York, 35 A.D.2d 330, 334 (construing a City of Niagara Falls ordinance that a building located 277' from the excavation site is not an 'adjoining' property).

While the primary measure of damages for real property injuries is the diminution of market value, courts have also accepted as a measure of loss the amount necessary to restore the property to its condition prior to damage. Victor A. Harder Realty, 64 N.Y.S.2d at 322 (the amount of damages must compensate the victim to the extent necessary to remedy an economic loss). Costs to restore the property are used when there is no proof of diminution of value, or when the restoration costs are less than the market value diminution. Victor A. Harder Realty, 64 N.Y.S.2d at 321; see also, May v. 229 Development Corp., 62 Misc.2d 549, 552 (while the court acknowledged that the reasonable measurement of damages was the cost to restore the retaining wall, the amount could not be so high a ratio to the market value of the building where the majority of the building was left intact and in use by the plaintiff and evidence offered indicated that the requested repair costs would nearly total the market value of the property).

Covenant Restricting Structures Does Not Govern Use of Those Structures

Kew Forest Neighborhood Association, Inc. v. M & K Management, LLC.

NYLJ 11/30/04, p. 26, col. 5

AppDiv, Second Dept

(memorandum opinion)

In an action for a declaration that operation of a medical practice violated a restrictive covenant, a neighborhood association appealed from the Supreme Court's grant of summary judgment to the landowner, holding that the covenant did not prohibit operation of a medical practice.

The subject parcel was subject to a variety of restrictions. First, the covenant prohibited specified trades and businesses and any other “noxious, dangerous, or offensive trade or business.” Second, the covenant prohibited the erection of a building for occupation by more than one family or household, such as a multiple dwelling or an apartment building. Neighborhood association brought this action, contending that operation of an orthopedic practice out of a one-family home constituted a violation of the restrictive covenant.

In holding that the Supreme Court had properly granted summary judgment to the landowner, the Appellate Division first concluded that the medical practice could not be considered noxious, dangerous, or offensive. The court then noted that although the covenant prohibited erection of a building by more than one family, it did not restrict the premises to residential use only. As a result, the medical practice did not constitute a violation.

COMMENT

Because “the general public policy favors the free and unobstructed use of real property, courts will not enforce restrictive covenants unless the language in the covenant is clear.” Kaufman v. Fass, 302 A.D.2d 497. In Kaufman, the court affirmed dismissal of a homeowner's action to enforce a covenant against neighbors who had leased their home to a tenant despite a covenant that stated that the premises could not be used for “business of any kind,” and that a homeowner could not permit paying guests to pay to stay on the premises. 302 A.D.2d 497. The court concluded that since the covenant did not specifically bar owners from leasing the property, the covenant should be construed in favor of the neighbors who had leased their home. Blair v. Ladue 14 A.D.2d 373, articulates the same strict construction principle. In dictum the court indicated that if a covenant prevented commercial use of a property, a solo physician practicing medicine in his or her residence would not violate the restriction.

Nevertheless, an unambiguous covenant is enforceable. In Blair v. Ladue, the court held that the words “the premises … shall not be used for the purposes of commercial business” precluded a tenant from building a five physician clinic on the property, which included a parking lot for 15 cars as well as laboratory, x-ray and diathermy facilities to be rented out to physicians. Id. at 374. The court refused to accept the doctor's argument that the clinic was a “professional practice” rather than a commercial practice, and held that the clinic was a commercial practice that clearly violated the covenant. Id. at 375.

A covenant restricting the structures allowed on a parcel does not bar the owner from making atypical uses of a permitted structure. Thus, in Bolhack v. Temple Anshe Sholom of Kew Gardens, 184 Misc. 1071, a covenant prohibited structures “intended for the occupation of more than one family or household”, yet the court held that the covenant did not prevent use of a converted one-family house for synagogue purposes. The court reasoned that if the covenant had been intended to limit the use of the premises to residential purposes, the parties could easily have accomplished that result with explicit language expressing that intention. 184 Misc. at 1074.

Limitation of Remedies for Inability to Convey Title Does Not Apply to Seller's Willful Default

Reckess v. Goldman

NYLJ 12/6/04, p. 32, col. 1

AppDiv, Second Dept

(memorandum opinion)

In a purchaser's action for specific performance of a contract for sale of real property, the purchaser appealed from the Supreme Court's grant of summary judgment to the seller. The Appellate Division reversed and awarded summary judgment to the purchaser, holding that a contractual waiver provision applied only in the case of the sellers' inability to convey marketable title.

The sale contract limited the remedies available to the purchaser if the seller proved unable to convey title. The sellers then declined to close, contending that the contract provision constituted a waiver of the purchaser's right to obtain specific performance. When the purchaser brought this action, the Supreme Court dismissed the complaint, relying on the limitation of remedies provisions.

In reversing, the Appellate Division held that the parties can include a contract provision waiving the right to specific performance in the event of the seller's willful default, but concluded that any such waiver provision would have to be explicit. Ambiguity would be construed against the drafter. In this case, the court concluded that the limitation of remedies provision contemplated that any waiver would be effective only in the event a situation beyond the control of the parties made title unmarketable. The sellers, however, conceded that they could convey good and marketable title, and offered no reason for their willful default. On these facts, they could not rely on the contract provision to defeat purchaser's claim for specific performance. Hence, the court, searching the record, concluded that the purchaser was entitled to summary judgment.

Preliminary Injunction Denied in Lateral Support Action

Rodriguez v. City of New York

NYLJ 12/1/04, p. 25, col. 1

Supreme Ct., Bronx Cty

(Victor, J.)

In an action by a homeowner to enjoin construction on neighboring land, the homeowner sought a preliminary injunction. The court denied the motion, holding that because the homeowner alleged that her home was already a total loss, she would not suffer any additional loss from continuing construction.

Land adjacent to the homeowner's dwelling had been owned by the city until the city conveyed it to a non-profit corporation which then began construction on an urban renewal project consisting of 14 two-family homes. The homeowner contends that construction of two-family homes on either side of her dwelling caused major settlement of the home, leading to leaks and cracks. The homeowner's engineer submitted an affidavit indicating, “with reasonable engineering certainty” that the homeowner's building should be removed and replaced with a new building. The engineer's affidavit contends that the settling was the result of lack of underpinning of the structure. On the basis of the affidavit, the homeowner sought a preliminary injunction against further construction.

In denying the homeowner's motion, the court conceded that an owner of land has a right to lateral support both of the owner's land and of the structures located on the land.

But the court also noted that the city and other defendants conceded a duty to provide support, but contended that no need for underpinning had come into being. The court concluded that the homeowner had not demonstrated a likelihood of success on the merits, and had not demonstrated any irreparable injury in light of the engineer's conclusion that the house would have to be replaced in any event.

COMMENT

Property owners in the City of New York, engaged in the excavation of their land to a depth in excess of 10 feet, must provide adequate protections to safeguard against damage to a building on adjoining property resulting from a loss of lateral support. N.Y.C. Admin. Code ” 27-1028, 27-1031(b)(1) (formerly ' C26-385.0); compare ' 27-1031(b)(2) (excavation of 10 feet or less does not create this duty, instead requiring adjoining property owners to take their own precautions against potential damage). The ordinance imposes liability on an excavating party that fails to take adequate preliminary precautions to protect against damage to an adjoining structure. Victor A. Harder Realty & Construction Co. v. City of New York, 64 N.Y.S.2d 310, 318 (city failed to provide support for an adjacent building and was held liable for repairs proximately caused by the lack of adequate protection, because nonconformance with the ordinance creates tort liability with the “same force and effect as a statute”).

To establish liability, the party seeking recovery for damages must prove a causal relationship between the excavation and the damage to its building. Victor A. Harder Realty, 64 N.Y.S.2d at 318 (factual inquiry established that defendant's activities were the proximate cause of the injuries to plaintiff's house); Coronet Properties Co. v. L/M Second Avenue, Inc, 166 A.D.2d 242, 243 (requiring a finding of proximate cause before assessment of liability under '27-1031). This fact-finding generally precludes summary judgment, because a necessary inquiry involves an assessment of the building condition both prior to the excavation work and after the alleged loss of lateral support. Coronet Properties Co., 166 A.D.2d at 243 (once evidence is provided that the excavating party did not comply with the ordinance, a factual inquiry is needed in order to rule out other possible causes of the damage). The excavating owner's liability extends to adjoining property owners, which are defined liberally to include any properties “near” or “in close proximity” to the excavation, as well as “likely to be affected” by the loss of lateral support. Victor A. Harder Realty, 64 N.Y.S.2d at 318-19 (interpreting a City of New York ordinance to provide that a building located across a municipal street and 50 feet from the excavation site is on 'adjoining' property); compare, Kimberly-Clark Corp. v. Power Authority of New York, 35 A.D.2d 330, 334 (construing a City of Niagara Falls ordinance that a building located 277' from the excavation site is not an 'adjoining' property).

While the primary measure of damages for real property injuries is the diminution of market value, courts have also accepted as a measure of loss the amount necessary to restore the property to its condition prior to damage. Victor A. Harder Realty, 64 N.Y.S.2d at 322 (the amount of damages must compensate the victim to the extent necessary to remedy an economic loss). Costs to restore the property are used when there is no proof of diminution of value, or when the restoration costs are less than the market value diminution. Victor A. Harder Realty, 64 N.Y.S.2d at 321; see also, May v. 229 Development Corp., 62 Misc.2d 549, 552 (while the court acknowledged that the reasonable measurement of damages was the cost to restore the retaining wall, the amount could not be so high a ratio to the market value of the building where the majority of the building was left intact and in use by the plaintiff and evidence offered indicated that the requested repair costs would nearly total the market value of the property).

Covenant Restricting Structures Does Not Govern Use of Those Structures

Kew Forest Neighborhood Association, Inc. v. M & K Management, LLC.

NYLJ 11/30/04, p. 26, col. 5

AppDiv, Second Dept

(memorandum opinion)

In an action for a declaration that operation of a medical practice violated a restrictive covenant, a neighborhood association appealed from the Supreme Court's grant of summary judgment to the landowner, holding that the covenant did not prohibit operation of a medical practice.

The subject parcel was subject to a variety of restrictions. First, the covenant prohibited specified trades and businesses and any other “noxious, dangerous, or offensive trade or business.” Second, the covenant prohibited the erection of a building for occupation by more than one family or household, such as a multiple dwelling or an apartment building. Neighborhood association brought this action, contending that operation of an orthopedic practice out of a one-family home constituted a violation of the restrictive covenant.

In holding that the Supreme Court had properly granted summary judgment to the landowner, the Appellate Division first concluded that the medical practice could not be considered noxious, dangerous, or offensive. The court then noted that although the covenant prohibited erection of a building by more than one family, it did not restrict the premises to residential use only. As a result, the medical practice did not constitute a violation.

COMMENT

Because “the general public policy favors the free and unobstructed use of real property, courts will not enforce restrictive covenants unless the language in the covenant is clear.” Kaufman v. Fass, 302 A.D.2d 497. In Kaufman, the court affirmed dismissal of a homeowner's action to enforce a covenant against neighbors who had leased their home to a tenant despite a covenant that stated that the premises could not be used for “business of any kind,” and that a homeowner could not permit paying guests to pay to stay on the premises. 302 A.D.2d 497. The court concluded that since the covenant did not specifically bar owners from leasing the property, the covenant should be construed in favor of the neighbors who had leased their home. Blair v. Ladue 14 A.D.2d 373, articulates the same strict construction principle. In dictum the court indicated that if a covenant prevented commercial use of a property, a solo physician practicing medicine in his or her residence would not violate the restriction.

Nevertheless, an unambiguous covenant is enforceable. In Blair v. Ladue, the court held that the words “the premises … shall not be used for the purposes of commercial business” precluded a tenant from building a five physician clinic on the property, which included a parking lot for 15 cars as well as laboratory, x-ray and diathermy facilities to be rented out to physicians. Id. at 374. The court refused to accept the doctor's argument that the clinic was a “professional practice” rather than a commercial practice, and held that the clinic was a commercial practice that clearly violated the covenant. Id. at 375.

A covenant restricting the structures allowed on a parcel does not bar the owner from making atypical uses of a permitted structure. Thus, in Bolhack v. Temple Anshe Sholom of Kew Gardens, 184 Misc. 1071, a covenant prohibited structures “intended for the occupation of more than one family or household”, yet the court held that the covenant did not prevent use of a converted one-family house for synagogue purposes. The court reasoned that if the covenant had been intended to limit the use of the premises to residential purposes, the parties could easily have accomplished that result with explicit language expressing that intention. 184 Misc. at 1074.

Limitation of Remedies for Inability to Convey Title Does Not Apply to Seller's Willful Default

Reckess v. Goldman

NYLJ 12/6/04, p. 32, col. 1

AppDiv, Second Dept

(memorandum opinion)

In a purchaser's action for specific performance of a contract for sale of real property, the purchaser appealed from the Supreme Court's grant of summary judgment to the seller. The Appellate Division reversed and awarded summary judgment to the purchaser, holding that a contractual waiver provision applied only in the case of the sellers' inability to convey marketable title.

The sale contract limited the remedies available to the purchaser if the seller proved unable to convey title. The sellers then declined to close, contending that the contract provision constituted a waiver of the purchaser's right to obtain specific performance. When the purchaser brought this action, the Supreme Court dismissed the complaint, relying on the limitation of remedies provisions.

In reversing, the Appellate Division held that the parties can include a contract provision waiving the right to specific performance in the event of the seller's willful default, but concluded that any such waiver provision would have to be explicit. Ambiguity would be construed against the drafter. In this case, the court concluded that the limitation of remedies provision contemplated that any waiver would be effective only in the event a situation beyond the control of the parties made title unmarketable. The sellers, however, conceded that they could convey good and marketable title, and offered no reason for their willful default. On these facts, they could not rely on the contract provision to defeat purchaser's claim for specific performance. Hence, the court, searching the record, concluded that the purchaser was entitled to summary judgment.