New York’s complex web of property regulations continues to evolve, with significant changes on the horizon that could reshape how building owners navigate construction projects and compliance requirements. As boards grapple with mounting regulatory demands and rising interest rates, legal experts are seeing shifts in both immediate challenges and long-term strategic planning.
A major development awaiting Governor Hochul’s signature involves reforms to Real Property Actions and Proceedings Law Section 881, which governs access agreements between neighboring properties during construction projects. The current statute, which requires property owners to obtain permission before placing protective equipment on adjacent buildings during exterior work, has become a source of prolonged disputes and court congestion.
“The statute is vague and has ambiguities, and because of that, it left neighbors to have these prolonged fights, and it inundated the court system,” explains Julie Schechter, partner at Fox Rothschild who specializes in cooperative and condominium law. The existing language requiring agreements “upon such terms as justice requires” has proven too broad, leading to inconsistent interpretations and strategic litigation.
The proposed reforms address key issues affecting the construction industry. Currently, the law only covers temporary protections like sidewalk bridges and coverings, but doesn’t account for permanent installations such as underpinning or wall anchors. The new legislation will clarify procedures for both temporary and permanent encroachments, providing needed certainty for developers and property owners.
Perhaps most significantly, the reforms will codify what has become standard practice: that the party requesting access pays the neighbor’s professional fees for reviewing plans and negotiating agreements. “That wasn’t in the law. That was just what one court said, and some other courts followed, and what became the general practice, but it wasn’t law,” Schechter notes. “Now that’s going to be included in the law, and you no longer need to fight over that.”
While regulatory changes capture headlines, boards are facing more immediate financial pressures from interest rate fluctuations. After years of minimal refinancing activity due to high rates, Schechter is seeing an increase in forced refinancing as existing mortgages come due.
“When interest rates were so low, even if it meant paying off an existing mortgage at a 6% interest rate to get down to a 2% interest rate, people were doing it even with a prepayment penalty,” she explains. “But then interest rates skyrocketed, and nobody was doing voluntary refinances.”
Now, buildings are confronting difficult choices as they’re forced to refinance at significantly higher rates. Some boards are considering major assessments to pay off mortgages entirely rather than accept higher debt service costs. “It’s a tough pill to swallow, to go from a 4% interest rate to an 8% interest rate,” Schechter observes.
The Climate Mobilization Act continues to influence board decision-making, with many buildings exploring both immediate efficiency improvements and major capital projects. Buildings are implementing quick fixes like sensor-controlled lighting while also considering investments in solar panels, elevator upgrades, and sub-metering systems.
“A lot of buildings are considering sub-metering,” Schechter notes, citing the technology’s proven ability to reduce energy consumption when residents pay directly for usage. “When people get hit in the wallet directly for energy that they’re using, they are more cognizant of it.”
Many boards are also hiring energy consultants to develop long-term strategies. Companies like EnPower are being retained to create multi-year capital project plans designed to meet evolving efficiency requirements while managing costs over time.
Despite the 2030 compliance deadline for the next phase of climate regulations seeming distant, Schechter emphasizes the importance of early preparation. “That’s the wrong attitude,” she says of boards taking a wait-and-see approach. “It’s really not that much time when it comes to planning for capital projects and raising money to do it.”
The timeline for major capital projects often extends 18-24 months from initial planning through completion, making 2030 much closer than it appears. Prudent boards are beginning to raise funds gradually and engage consultants now to avoid rushed decisions and major assessments later.
Beyond climate compliance, boards are addressing newer challenges around electric vehicle charging infrastructure and lithium-ion battery safety. EV charger installation involves complex considerations around ownership structures, electrical capacity, and cost allocation.
“It’s clearly the future, and so boards should start thinking about that now,” Schechter advises, noting that solutions vary based on each building’s ownership structure and infrastructure.
As regulatory costs mount, buildings are exploring alternative revenue sources beyond traditional assessments. Flip taxes, fees applied during unit transfers, are becoming more common, typically set at 2% of the sale price. Buildings are also monetizing unused space by creating storage units in basements and other areas.
“A lot of buildings were forced to get creative on alternative ways of raising money,” Schechter explains, as boards seek to avoid sudden, large assessments that could financially strain residents on fixed incomes.
The regulatory landscape is also driving geographic expansion for specialized legal practices. Fox Rothschild is preparing to launch a dedicated cooperative and condominium practice in Florida, capitalizing on both the migration of New York clients and Florida’s adoption of inspection requirements similar to New York’s Local Law 11.
“After Surfside collapsed, Florida changed a lot of its regulations to mimic New York’s facade inspection requirements,” Schechter notes. “These are regulations that we’re used to up here, but they’re brand new in Florida.”
The combination of New York transplants with high expectations and Florida’s evolving regulatory framework creates opportunities for firms with deep experience in complex building compliance issues.
As New York’s property regulatory environment continues to mature, the focus is shifting from reactive compliance to proactive strategic planning. The pending access agreement reforms represent a broader trend toward clarifying ambiguous regulations that have created unnecessary friction in the development process.
For boards and property owners, success increasingly depends on early engagement with regulatory requirements, creative financing solutions, and professional guidance to navigate an increasingly complex landscape. While regulatory fatigue is real, the alternative, delayed compliance and emergency assessments, poses far greater risks to building communities and their residents.
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