New York Law Review

Tag: Air Rights

  • Wing Ming Properties (U.S.A.) Ltd. v. Mott Operating Corp., 79 N.Y.2d 1021 (1992): Trespass on Air Rights and De Minimis Encroachments

    Wing Ming Properties (U.S.A.) Ltd. v. Mott Operating Corp., 79 N.Y.2d 1021 (1992)

    Encroachments on conveyed airspace are actionable as trespass, but de minimis variations and the lack of demonstrable harm can preclude injunctive or monetary relief.

    Summary

    Wing Ming Properties sued Mott Operating Corp. for trespass, alleging that new rooftop air-conditioning equipment and parapets erected by a sublessee encroached on airspace Wing Ming acquired in a 1973 conveyance. The Court of Appeals affirmed the dismissal of the suit, holding that while development rights were conveyed, the new structures were excluded from Floor Area Ratio (FAR) calculations, thus not affecting those rights. Further, any physical encroachment on the conveyed airspace was considered de minimis, and Wing Ming failed to demonstrate any actual harm or diminution in property value resulting from the slight variations. Therefore, neither injunctive nor monetary relief was warranted.

    Facts

    In 1973, Mott, Kaplan, Chu, and Tam conveyed the airspace above a building at 5 Chatham Square in Manhattan to Wing Ming’s predecessor. Mott et al. retained the right to maintain an existing rooftop air-conditioning unit and room. Wing Ming’s predecessor intended to transfer unused development rights (FAR) to a contiguous building. In 1985, Kaplan subleased the property to the Bank of Central Asia (BCA), allowing BCA to use the roof for HVAC equipment and alter the facade. BCA removed the old equipment, installed new equipment, and built parapet walls extending over the rooftop.

    Procedural History

    Wing Ming, as successor in interest, sued for trespass. The Supreme Court granted summary judgment for the defendants, dismissing the complaint. The Appellate Division affirmed this decision. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the new rooftop air-conditioning equipment and parapets erected by BCA constituted a trespass on Wing Ming’s conveyed rooftop airspace, entitling Wing Ming to injunctive or monetary relief.

    Holding

    No, because the new rooftop structures did not affect Wing Ming’s development rights (FAR), and any physical encroachment was de minimis with no demonstrable harm. Therefore, neither injunctive nor monetary relief is warranted.

    Court’s Reasoning

    The Court of Appeals agreed with the lower courts that no trespass occurred that warranted relief. The new structures were excluded from FAR calculations under New York City Zoning Resolution § 12-10, meaning Wing Ming’s development rights were unaffected. More importantly, the court found that any physical intrusion into the conveyed airspace was minimal. The court stated, “The variations between the air-conditioning unit and room existing at the time of the 1973 conveyance and the replacement unit and ducts subsequently erected by BCA, and the extent to which the newly constructed parapets rise above the elevation plane of the conveyed airspace, are de minimis at best.” The court emphasized that Wing Ming had not demonstrated that these slight variations negatively impacted its property value. This lack of demonstrated harm was crucial to the decision. Even if a technical trespass occurred, the principle of de minimis non curat lex (the law does not concern itself with trifles) applied, precluding the need for injunctive or monetary relief. The court implicitly acknowledged the conveyance of the airspace property right, but focused on the lack of substantial interference and provable damages. The court emphasized a practical approach, requiring demonstrable harm to justify legal intervention in property disputes.

  • 805 Third Ave. Co. v. M.W. Realty Associates, 58 N.Y.2d 447 (1983): Economic Duress Requires Wrongful Withholding of a Legal Duty

    805 Third Ave. Co. v. M.W. Realty Associates, 58 N.Y.2d 447 (1983)

    A claim of economic duress in contract modification requires demonstrating that one party wrongfully threatened to breach the original agreement by withholding a legally required performance unless the other party agreed to further demands.

    Summary

    805 Third Avenue Co. sued M.W. Realty Associates seeking to rescind a modified contract for the sale of air rights, claiming economic duress. 805 Third Ave. Co. alleged that M.W. Realty Associates wrongfully refused to deliver documents required under the original contract unless 805 Third Ave. Co. agreed to a modification more favorable to M.W. Realty Associates. The New York Court of Appeals affirmed the dismissal of the complaint, holding that because 805 Third Ave. Co. failed to fulfill its preconditions for M.W. Realty Associates’ performance under the original agreement, M.W. Realty Associates’ refusal to deliver the documents was not a wrongful act constituting economic duress. The court emphasized that a party cannot be guilty of economic duress for refusing to do something it is not legally required to do.

    Facts

    805 Third Avenue Co., a ground lessee, contracted with M.W. Realty Associates to purchase air rights for $1.9 million to construct a 31-story building. The agreement, dated September 18, 1979, stipulated that 805 Third Avenue Co. would deposit cash and a promissory note in escrow, while M.W. Realty Associates would deposit a declaration of zoning lot restrictions and a single lot and easement agreement. These escrow deposits were to be exchanged on the “Sales Closing Date”, defined as the date a building permit was issued or when excavation or construction began for the proposed building. 805 Third Avenue Co. began foundation work on December 4, 1979, after obtaining a permit for the foundation only. In May 1980, 805 Third Avenue Co. demanded delivery of the documents, but M.W. Realty Associates refused unless 805 Third Avenue Co. agreed to modify the contract to terms more favorable to M.W. Realty Associates. 805 Third Avenue Co. then executed the modified contract, claiming economic duress.

    Procedural History

    805 Third Avenue Co. sued M.W. Realty Associates to rescind the modified contract, claiming economic duress. Special Term granted a preliminary injunction maintaining the status quo and denied M.W. Realty Associates’ motion to dismiss. The Appellate Division modified the order by vacating the injunction and granting the motion to dismiss. The Court of Appeals then reviewed the Appellate Division’s order.

    Issue(s)

    Whether M.W. Realty Associates’ refusal to deliver documents under the original contract, absent 805 Third Avenue Co.’s fulfillment of its preconditions, constituted a wrongful threat amounting to economic duress that would justify rescission of the modified contract.

    Holding

    No, because 805 Third Avenue Co. failed to fulfill the preconditions for M.W. Realty Associates’ performance under the original contract, M.W. Realty Associates’ refusal to deliver the documents was not a wrongful act and therefore did not constitute economic duress.

    Court’s Reasoning

    The court found that the contract of September 18, 1979, annexed to the complaint, governed the obligations of the parties. According to the contract, M.W. Realty Associates was only obligated to deliver the declaration and lot agreement on the “Sales Closing Date,” which the contract defined as the date of the building permit’s issuance or the commencement of construction. Because 805 Third Avenue Co. began construction on December 4, 1979, the Sales Closing Date was triggered. The court determined that delivery of the declaration and lot agreement was conditioned on 805 Third Avenue Co. delivering (a) the cash down payment and promissory note, plus interest, (b) a letter of credit securing payment of the balance, and (c) the architectural drawings. Since 805 Third Avenue Co. failed to plead that it fulfilled these conditions, M.W. Realty Associates was under no legal duty to deliver the documents. The court stated, “a party cannot be guilty of economic duress for refusing to do that which it is not legally required to do.” The court distinguished this case from others where the plaintiff’s pleading was sufficient on its face but the right to recovery was doubtful, noting that this action was controlled by the contract annexed to the complaint and that there was no factual dispute, only a legal one concerning the instrument’s interpretation. The court relied on the principle that contract interpretation is a legal matter for the court, and the contract provisions prevail over conclusory allegations in the complaint.

  • Macmillan, Inc. v. CF Lex Associates, 56 N.Y.2d 386 (1982): Defining ‘Tract of Land’ in Zoning Lot Mergers

    Macmillan, Inc. v. CF Lex Associates, 56 N.Y.2d 386 (1982)

    For purposes of zoning lot mergers under the New York City Zoning Resolution, the term ‘tract of land’ refers solely to the surface land, excluding buildings and improvements thereon; therefore, a space tenant, even with a substantial interest in a building, is not necessarily a ‘party in interest’ requiring consent for a zoning lot merger.

    Summary

    Macmillan, Inc., a major tenant in the Macmillan Building, sued to prevent a zoning lot merger and air rights transfer without its consent. Campeau Corporation, the building owner, sought to merge the zoning lot with an adjacent development lot to allow for a larger building on the development lot. Macmillan argued it was a ‘party in interest’ under the zoning resolution, requiring its consent. The New York Court of Appeals held that ‘tract of land’ refers only to the surface land, not the building, and therefore Macmillan was not a ‘party in interest’ whose consent was required. This decision facilitates zoning lot mergers by clarifying that consent is not required from every tenant in a building.

    Facts

    Macmillan occupied nearly all of the usable space in the Macmillan Building under a long-term lease. Campeau Corporation purchased the Macmillan Building and sought to execute a declaration of zoning lot restrictions with CF Lex Corp., which owned an adjacent development lot. The purpose of this was to merge the zoning lots and transfer air rights from the Macmillan Building to the development lot, allowing CF Lex Corp. to construct a larger building on its lot. CF Lex Corp. purchased the air rights from Campeau for $5,060,000. Macmillan contended that it was a “party in interest” under the zoning resolution and that its consent was required for the zoning lot merger and air rights transfer.

    Procedural History

    Macmillan filed suit seeking a declaratory judgment that the air rights transfer required its consent. The Supreme Court dismissed the complaint. The Appellate Division reversed, reinstated the complaint, and temporarily enjoined construction. The defendants appealed to the New York Court of Appeals, which granted leave to appeal.

    Issue(s)

    Whether, under the New York City Zoning Resolution, the term “tract of land” includes buildings erected on the land, thereby making a space tenant with a substantial interest in the building a “party in interest” whose consent is required for a zoning lot merger.

    Holding

    No, because the term “tract of land” refers only to the underlying surface land and does not include buildings or improvements. Therefore, Macmillan, as a space tenant, is not a “party in interest” whose consent is required for the zoning lot merger.

    Court’s Reasoning

    The court reasoned that the phrase “tract of land” is not defined in the zoning resolution, so it looked to the plain meaning of the words. The court noted that “tract” refers to a region or stretch of land, and “land” refers to the solid surface of the earth. The court also observed that the drafters of the resolution did not use the phrase “land and improvements,” which would have explicitly included buildings. The court emphasized the practical implications of including buildings in the definition of “tract of land,” arguing that requiring the consent of every space tenant with a recorded interest would “so encumber the procedure for zoning lot merger as to make it of questionable practical utility.” This would be inconsistent with the zoning resolution’s purpose of promoting desirable land use and strengthening the city’s economic base. The court also highlighted that air rights are historically associated with land ownership, citing the maxim “cujus est solum, ejus est usque ad coelum et ad inferos” (to whomsoever the soil belongs, he owns also to the sky and to the depths). The court stated, “Air rights are incident to the ownership of the surface property — the right of one who owns land to utilize the space above it.”

  • Newport Associates, Inc. v. Solow, 30 N.Y.2d 263 (1972): Air Rights and Zoning Lot Definitions in Leasehold Agreements

    Newport Associates, Inc. v. Solow, 30 N.Y.2d 263 (1972)

    A long-term lease, absent specific restrictions, allows a lessee to utilize the air rights associated with the leased property under zoning regulations, even if the lease does not explicitly grant those rights, and the lessor loses the ability to independently transfer those rights.

    Summary

    Newport Associates (lessor) sued Sheldon Solow (lessee) to prevent him from using the unused air rights above Newport’s property (which Solow leased) for the construction of a building on Solow’s adjacent property. Solow’s lease was long-term. The New York Court of Appeals held that Solow, as a long-term lessee, could utilize the air rights associated with the leased property because the lease lacked any provision restricting his right to do so under the zoning resolution. The court reasoned that under the zoning resolution, Solow was effectively the owner of a single “zoning lot,” encompassing both his fee simple property and the leasehold, and could therefore utilize the floor area ratio associated with that combined lot. The court emphasized that the lease did not reserve air rights to the lessor.

    Facts

    1. Newport Associates owned property at 4 West 58th Street in New York City.
    2. Sheldon Solow leased the property from Newport under a long-term lease expiring in 2052.
    3. Solow owned adjacent parcels at 10-40 West 58th Street and 9-25 West 57th Street.
    4. Solow began constructing a 45-story office building on his property, utilizing the unused floor area ratio (air rights) from the leased property, per a building permit.
    5. The lease between Newport and Solow contained a clause allowing alterations to the existing building with some restrictions, but was silent about air rights.

    Procedural History

    1. Newport sued Solow to determine a claim to real property, arguing the lease didn’t convey air rights and Solow’s construction diminished the value of its reversionary interest.
    2. The trial court granted summary judgment for Solow, holding he was authorized to use the unused floor area ratio.
    3. The Appellate Division reversed, granting summary judgment to Newport, finding Solow’s construction was an elimination of a valuable property right.
    4. The New York Court of Appeals reversed the Appellate Division and reinstated the trial court’s judgment.

    Issue(s)

    1. Whether a long-term lease, absent explicit restrictions, allows the lessee to utilize the unused air rights associated with the leased property for construction on adjacent property owned by the lessee.

    Holding

    1. Yes, because under the applicable zoning resolution, the lessee was effectively the owner of a single zoning lot, and the lease contained no provision precluding the lessee’s exercise of rights under the zoning resolution.

    Court’s Reasoning

    1. The court focused on the New York City Zoning Resolution’s definition of a “zoning lot,” which could include multiple contiguous lots under single ownership, including long-term leases (at least 50 years with a renewal option to total at least 75 years).
    2. Because Solow’s lease met the definition of ownership under the Zoning Resolution, and his properties were contiguous, he was entitled to treat them as a single zoning lot for floor area ratio calculations.
    3. The lease did not contain any provision that precluded Solow’s use of the air rights in question.
    4. The court rejected Newport’s argument that it lost the right to sell its air rights to owners on the other side of the leased property, stating that, given Solow’s ownership and the Zoning Resolution, Newport possessed no such right of sale.
    5. The court emphasized that whatever rights Newport may have had were lost as a result of the zoning ordinance itself, not any violation of the lease by Solow.
    6. Judge Breitel’s concurrence highlighted that Newport lost a valuable asset but failed to reserve air development rights in the lease, a step lessors of long-term leaseholds may want to take.
    7. The court states, “[W]hatever rights that plaintiff may otherwise have had were not lost by any act of the defendant, but rather as a result of the operation of the ordinance. Since defendant did not violate any of the provisions of the lease, plaintiff is not entitled to relief.”

  • In re City of New York, 24 N.Y.2d 300 (1969): Valuation of Air Rights in Condemnation

    In re City of New York, 24 N.Y.2d 300 (1969)

    When a municipality condemns air rights previously acquired by a railroad and seeks to assess the cost against neighboring property owners, the municipality must demonstrate it actually incurred an expense or detriment related to those specific air rights.

    Summary

    The City of New York sought to condemn easements of light, air, and access previously acquired by an elevated railway and to assess the cost against neighboring property owners who would benefit from the removal of the elevated structure. The city argued it was entitled to recover at least a portion of the original cost the railroad paid for these easements. The court held that the city failed to demonstrate that it had incurred any specific expense or detriment related to those particular easements when it purchased the railway in 1940, precluding it from recovering the original cost from the benefited property owners. The city’s failure to prove its expenditure defeated its unjust enrichment claim.

    Facts

    An elevated railway had previously acquired easements of light, air, and access from property owners along its route. The City of New York later acquired the railway, including these easements, for $164,000,000. The city then sought to condemn these easements to remove the elevated railway structure and restore those rights to the neighboring property owners. The city intended to assess the cost of this condemnation against the property owners who would benefit from the improvement.

    Procedural History

    The city initiated condemnation proceedings to acquire the easements. The Appellate Division affirmed the lower court’s decision in favor of the city, feeling constrained by prior case law, specifically *Matter of City of New York (East 42nd St. El. R.R.)*, 265 N.Y. 170 (the “Spur” case). This appeal followed.

    Issue(s)

    Whether the City of New York, having condemned easements of light, air, and access it previously acquired as part of a larger railway purchase, can assess the original cost of those easements against neighboring property owners without demonstrating that the city incurred a specific expense or detriment for those particular easements during the initial railway acquisition?

    Holding

    No, because the city failed to demonstrate that it incurred any specific expense or detriment related to the acquisition of the easements when it purchased the railway. Without such proof, the city cannot recover the original cost from the benefited property owners based on an unjust enrichment theory.

    Court’s Reasoning

    The court emphasized that for the city to properly levy a special assessment against benefited property owners, it had to show that it made the expenditure it sought to recover. The court found that the city’s 1940 purchase of the railway for $164,000,000 did not include any specific allocation of the purchase price to the easements in question. The city provided no evidence that it paid anything, or at least a specific amount, for these easements when it bought the railway. The court distinguished this case from *Matter of City of New York (East 42nd St. El. R.R.)*, 265 N.Y. 170, noting that even if that case was still good law, the equities were different here. The court stated that, absent a showing of expense or detriment to the city related to the easements, the benefited property owners could reasonably consider their improved easements a “fortuitous” benefit. Judge Burke dissented, arguing that the city’s failure to demonstrate a specific expenditure on the easements precluded recovery, even if the *Spur* case were still applicable. The dissent directly quoted the Restatement of Restitution, § 1, emphasizing that a party seeking recovery under unjust enrichment must demonstrate that it “incurred an expense or suffered some detriment causing this benefit to accrue to the other party.” Because the City could not prove it paid specifically for the easements, the unjust enrichment argument failed.