New York City In 2025, there was an array of proposed laws and amendments to existing laws, which have been enacted or are anticipated to be enacted in the near future and which will impact developers and owners of real estate in New York in 2026 and beyond. These important legal developments were largely aimed at streamlining access agreements; reducing the impacts of scaffolding, noise, traffic and pests; enhancing construction safety; and expediting prompt payment to contractors and subcontractors during construction projects. This article will examine the most significant developments and identify certain potential penalties for failure to comply. Access Agreements As any property owner who seeks to develop its property (and as a result requires access to its neighbor’s property) can attest, negotiating access agreement has become increasingly difficult over the years. S3799B, which awaits Governor Kathy Hochul’s signature, helps to streamline this process by amending Real Property Actions and Proceedings Law §881 (RPAPL §881) and includes several significant features. First, S3799B allows a real estate developer to underpin its neighbor’s property. Almost unilaterally, New York courts have held that they are precluded from granting the right to underpin a neighbor’s property under RPAPL §881, since RPAPL §881 discusses temporary protections, whereas underpinning is considered a permanent encroachment. Based on such court rulings, a real estate developer could be forced to redesign its project to eliminate the need for underpinning. Accordingly, S3799B could be a gamechanger. Second, S3799B allows a court that hears an RPAPL §881 application to award reasonable attorneys' fees to either party upon a finding that the other party acted in bad faith or engaged in willful misconduct. This also is a significant development. If nothing else, a neighbor who refuses access, or at least attempts to extort a large license fee from a developer, will have second thoughts if it faces the prospect of paying the developer’s legal fees in the proceeding. New York City Construction Codes There have been several construction-related quality of life laws that have been enacted or are in the late process of enactment. The New York City Department of Environmental Protection (DEP) has released a draft rule that would require construction sites, (i) over 200,000 square feet, (ii) are within 50 feet of designated noise sensitive living areas or healthcare facilities, and (iii) which have an Alternative Noise Mitigation Plan, to install equipment to monitor noise and report noise data directly to the DEP. The data would be used to determine if additional noise mitigation or a change in construction hours is needed. The rule would also be treated as a pilot to help set future construction noise mitigation policies. In July of this year, the New York City Council passed Intro 750A, which requires building owners applying to demolish a building that has been issued a vacate order pursuant to Section 27-2139 of the Administrative Code to show what actions the owners have undertaken to remedy any violations associated with such vacate order, including but not limited to permits, financing, estimates and the like. In the proposed New York State budget submitted this past March, there is a proposal that would enable the City of New York to authorize a new surcharge for permits relating to the obstruction or closure of streets, sidewalks, or pedestrian plazas for the purpose of construction. This proposal is being championed by the City and the Department of Transportation and includes the ability for the City to set a surcharge for permits that is above the administrative cost — currently $50 for 90 days. The proposal provides a range of permissible fee increases but exempts affordable housing developments. Additionally, there is a proposed bill (Intro No. 1217) amending the New York City Administrative Code to require the New York City Department of Health and Mental Hygiene to perform a building inspection in response to any 311 complaints relating to rats, mice, pests, or conditions which might attract them, within ten days of such complaint being made. The bill would also require a record of such inspections be made publicly available. 2025 Prompt Payment Act Amendments The Prompt Payment Act (General Business Law [GBL] Article 35-E) is designed to ensure prompt payment to contractors and subcontractors on private projects costing in excess of $150,000. On November 17, 2023, the Prompt Payment Act was amended to, among other things, limit the right of owners and general contractors to withhold retainage in excess of 5% of the contract sum. Previously, retainage in a “reasonable amount” could be withheld. While the amendments created much concern and comment in the construction industry and bar, the Prompt Payment Act itself contains a broad savings clause which, we believe, permits parties to contract around the amendments. In view of the foregoing, the purpose of S5655 / A5405, which awaits Governor Hochul’s signature, is to fully prohibit the ability to require retainage in excess of 5% of the total contract sum. It is important to note that contrary to public projects, the 5% cap on retainage will apply to the aggregate contract sum, not on a per invoice basis. Thus, owners may decide to withhold a greater percentage of retainage through the first half of a project (for example, 7.5% - 10% through 50% completion), and thereafter reduce or remove the retainage withholding for the duration of the project, so that the total withholding never exceeds 5% of the total contract sum. Conclusion Developing, owning and operating real estate in New York, both within and outside New York City, presents a multitude of challenges to owners and the parties with whom they contract. Accordingly, these parties need to stay apprised of all laws, including new laws and amendments to existing laws. Hopefully, this article will serve as a primer for such parties as they look forward to a successful 2026. Kenneth M. Block and Stuart B. Rosen are partners of Tannenbaum Helpern Syracuse & Hirschtritt. Hillel E. Sussman, an associate at the firm, assisted in the preparation of this article.