Development projects are moving forward across the Greater Toronto Area (even with the recent market turmoil and increased interest rates), and developers are commonly seeking crane swing and tieback licence rights, amongst other possible requests, from neighbouring property owners. This is particularly common in downtown cores where large scale projects such as condominium buildings are located in very close proximity to neighbouring residential and commercial property boundaries and as the construction season approaches. These agreements can take many forms including “construction licence agreements”, “crane swing and tieback agreements”, “encroachment agreements”, and “shoring agreements.” You need a development lawyer to advise you.
Understanding the Basics
These temporary construction agreements or “construction licences” allow the developer to access the neighbouring property’s air space (for crane swing operation) or underground area (for installation of tiebacks). Tiebacks are an increasingly utilized engineering method to allow the developer to excavate the development site while maintaining the surrounding soil structure. This is sometimes referred to as “shoring.” As the developer excavates downwards, they install a shoring wall, drill in tieback anchors and apply stress to hold back the surrounding soil. This keeps the excavation site clean without impacting the adjacent structures. An alternative method developers utilize for excavation is installing internal rakers to support the shoring wall, however this method is often less desirable and effective, and is more costly and time consuming.
Please see our previous post Crane Swing and Tieback Easement Agreements for more preliminary information.
Any plans for tieback engineering must be approved by the municipal authority and usually an agreement is required to be in place between the developer and property owner to provide for tieback rights before a final building permit utilizing tiebacks will be issued.
What to Ask For
If you are approached by a developer, it is important to seek legal advice immediately to understand the possible risks and benefits of entering into this type of agreement.
Developers are often agreeable to paying for your legal fees to seek such advice. Ask the developer if they will cover the legal fees regardless of whether you enter into an agreement as a preliminary matter. A developer acting in good faith will likely oblige.
Some preliminary information you should ask for includes:
- Contact particulars for the developer, general contractor and engineers;
- Copies of the engineering shoring plans and supporting reports;
- A copy of the crane swing diagram;
- A construction timeline;
- The draft agreement; and
- Proof of insurance.
It is critical that you do not sign any agreements or grant the developer any rights prior to seeking out legal advice. It is critical to not permit access for a pre-construction survey prior to receiving legal advice and entering into a permission to enter agreement.
Hiring a Geostructural Engineer
We always recommend to our clients that they also engage a geostructural engineer to conduct a peer review of the developer’s tieback/shoring plans.
An independent engineer can assess the overall shoring design in relation to your property, including whether there is sufficient clearance between the proposed tiebacks and the foundation footings of any structures on your property. They can also make recommendations to better protect your property and can review monitoring reports throughout the excavation to ensure that the shoring system is not lagging or otherwise losing its structural integrity.
Typically, a developer acting in good faith will pay for this engineering peer review and in some cases for review of the monitoring reports.
Pre-Construction and Post-Construction Surveys
The developer will likely also request access to your property to conduct pre-construction survey and a post-construction survey once the work is complete. The primary purpose of these surveys is to document the condition of any structures located on the property both before and after construction takes place. This protects the developer from any claims for pre-existing damage. It can also be beneficial to the neighbouring property owner if any damage is caused by the construction, as there will be some evidence of the pre-construction condition, and possibly evidence of the post-construction condition. Pre-construction surveys are usually required to be completed by the municipal authority prior to it granting demolition and building permits.
We always recommend that our clients ask for a copy of these surveys as a strict condition of allowing the developer access to the property to conduct same. Generally, there should be an agreement in place outlining the terms and conditions of this temporary access. Too often property owners will grant access without first securing their right to the information yielded by the surveys.
Benefits & Risks
Property owners are often nervous about granting these easement or licence rights to a developer. At the end of the day, only you can decide whether you are comfortable entering into an agreement. It is important to understand the benefits and risks of entering into the agreement so you can make an informed decision.
- Compensation – often the developer will offer monetary compensation, or other benefits to your property such as the construction of a fence or paving of a driveway. The development project is still going to happen whether you agree to grant these rights or not, so you may as well get some compensation out of it as you will have to deal with the normal construction nuisances such as noise, dust and vibration regardless;
- Contractual rights – when you enter into an agreement you can seek certain protections from the developer in writing to protect your property, such as having yourself named on their insurance policy and/or asking for an indemnity from the developer for any damage caused to your property by the construction of the development project; and
- Maintaining an amicable relationship – there are many benefits of maintaining amicable relations with the developer since you will be in proximity throughout the construction. Having a relationship with a contact person can be useful when you want to ask the developer to move a construction vehicle or any other ask you may have.
- Error in the design/installation of the tiebacks or operation of the crane – if any of these occurred there is a chance it could result in damage to any structures on your property;
- Breach of contract – as with any contract, the developer could theoretically breach their contractual obligations, which could result in you needing to commence litigation to enforce the contract; and
- Denial of insurance claim – despite any insurance or indemnity provisions in the contract, the developer and/or the insurance company could deny coverage and claim that any alleged damage was pre-existing or not caused by the construction. This could result in litigation and having to prove the cause of any damage. As explained above, the pre- and post-construction survey will assist you in proving damages.
How Unified LLP Can Help
The Property and Commerce team at Unified LLP have extensive experience advocating for property owners. Our lawyers can assist you with negotiations with the developer and can review any licence agreements to ensure that you and your property are protected. It is important that you understand exactly what you are agreeing to and what risks may be involved. We also have an extensive network of professional contacts we can refer our clients to, such as geostructural engineers, where further professional advice is needed.
Your property is often one of your largest assets and it is in your best interest to protect it. Consult with a lawyer experienced in these types of matters before you sign any agreements that may impact your property.
Please contact Michael Paiva, Partner and head of Unified LLP’s Property and Commerce group at 416-800-1733 or 519-729-5038 for more information, or if you require assistance with a property related matter. Michael is a leading construction lawyer in Toronto who can help you with all your Tieback needs.