What are Crane Swing – Tie Back rights?

If you happen to have a property in your portfolio that neighbors a dense zoned area surrounding you, there might be a time where you will need to know about this terminology. For example, if your property is in downtown Toronto and a big developer buys out all your neighboring properties on one side and plans on building a tall development, all these things will come into play for you. Why? Because you are essential in their development and in most cases, their development process will become very expensive if they do not have your full cooperation.

A few things to remember when dealing with these agreements. It’s best to have a lawyer who is very well versed in the process. As a property owner, who can be involved in such a process, things to remember are that the construction next door will seriously affect the operation of your property and in some cases cause serious damage to your property as well. Let’s break this down.

Crane Swings Rights – Crane swing rights are exactly how it is worded. The rights to use the crane above your property. Basically, cranes make the development much easier as the material can come up without too much infrastructure and in most cases, it is 100% safe. However there are accidents that can happen with cranes as well, and if you are the neighbor who is sticking like glue, should be compensated for just the rights. The amount can be negotiated with the developer via the lawyers or directly, but one thing I would recommend is to have an additional amount in an escrow in case you have damage that needs to be rectified straight away. For example, if construction material falls on your flat roof and the shop under has the sky exposed to them, and you need ASAP repair done.

Tie Back – When the digging starts in your neighboring property they will need to use a methodology called Tie Back. Basically securing the digging will only affect the land that is being developed, a methodology that involves ‘ties’ which are metal rods enforced with concrete going across the land to keep the other adjoining properties to be more steady. The issue with this process is that there is still shoring when the development is happening and that creates a lot of vibration. Tie back amount should be compensated accordingly as if you have basement tenants or tenants in general they will be feeling vibrations come 6:30 every morning. If you do have vacancies at that time, good luck leasing them 🙂

So you need to make sure you get a handsome amount for both these as they are standard for a developer. We went through this process at a property we managed at the Bathurst/College area in Toronto. The next-door developer was Rio Can. In the process of construction, their demolition company broke the wastewater pipe, and then the shoring company filled that area with fresh cement which made its way into our wastewater pipe and we had a backup with the basement apartments flooded. The insurance got involved and then fought with Rio Can and the city of Toronto (eventually it settled but in these cases, no one wants to take the blame, especially a developer as its awful press).  So in a nutshell learnings that came out of that story was:

• Negotiate a solid tie back and crane swing amount
• Anticipate your retail getting hurt and asking for a rent break, negotiate that amount with the developer
• If you have signboards or wall murals that will get affected or redundant after, negotiate that amount.
• Have a $50,000 (minimum) put by the developer in an escrow in case of an emergency repair required because of the construction
• Have a third party engineer make quarterly visits and reports at the expense of the developer
• Put vibration monitors around your building to monitor the amount of vibration

If you have had a similar story or have had experiences please comment and share, always eager to learn.

Demolition next door to our managed property in downtown Toronto.

As you can see it gets quite close. So the room for error is there so keep a regular eye out. During this particular construction, they managed to scrape the exterior wall in the wintertime and our copper pipes froze!

Remember if it is a semi detached like this case, they will be responsible for an exterior wall finish out.