Next-Door Claims in Construction Projects: Key Provisions to Mitigate Risk of Adjacent Property Issues

The potential issues for damage to adjacent buildings (neighboring damage) in construction projects are numerous, especially in densely populated urban areas, and may include structural damage such as cracks in the foundation, façade, and drywall, and new or changing load patterns. As a result, costly disputes often arise between multiple parties when the owner of the adjacent building that has been damaged brings claims against the new building owner and joins other project participants including contractors, developers, and design professionals to the lawsuit. As more stakeholders become involved, these disputes become anything but straightforward.

Often the core of these next-door claims centers around questions of control and causation, especially where subrogation plays a pivotal role and insurers who pay for losses seek reimbursement from those responsible. Damage may come from multiple causes tied to different parties, each with its own insurer and contractual risk provisions.

Construction counsel for those contracted to work on a new building project should understand when and how their clients may be held liable for the impact of their work on neighboring properties and how to best mitigate risk of claims through certain pre-construction and drafting considerations for their clients.

Listen as our expert panel discusses the issues and potential claims that arise in construction projects where neighboring damage may occur. The panel will discuss pre-construction considerations and provisions that should be included in the project agreements to mitigate risk of next-door claims for each project participant.