Drawbacks of the Boom Liability in New Construction

In case you haven’t noticed, there is currently a building boom taking place in New York City. With so many scaffolds and cranes dotting the skyline, it seems like everyone wants to get into the real estate game and be a developer.

Most of the new construction work in the city is being done by very experienced developers—but a lot of it is being done by relative newcomers, sometimes with less-than-optimal results.

Recent events in New York City with the crane collapse and the marked increase in construction accidents only underline the importance of having good contracts which cover the risks and relationships on the project and having counsel from attorneys knowledgeable in this area of the law. The standards governing injuries to contractors are stricter than the standards for common law negligence and potential liability can be greater.

Some developers report having problems with the work being done by their contractors, and the people buying apartments in these brand-new buildings are also finding problems upon moving in.

As more closings occur in new buildings and neighbors start to talk to one another, disgruntled new owners are increasingly seeking legal advice about what to do with construction-related problems in their brand-new apartments—particularly when the developers do not respond to their concerns. This trend is not just a problem for developers, however. Poor construction becomes a problem for the boards of these new buildings as well, since once an apartment sale has closed, the board—as well as the sponsor—is likely to be named in any lawsuits involving a new unit. It is also a potential problem for the other residents of the building as well, since the expense of such lawsuits is an expense for the entire building community.

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