Real Estate and Construction Litigation Can Affect Property Values
- In BlogConstruction LitigationNewsReal Estate Litigation
- by ligitsec
- No Comment
Construction litigation is not pleasant for anyone involved, from homeowners or condo owners to the builders and developers who are responsible for completing projects to specifications. Litigation expenses can grow quickly when post-construction problems are discovered and there is often significant disagreement regarding the extent of problems that homeowners may claim to have with construction issues.
Among the myriad issues associated with construction litigation is the impact on property values. Homeowners can see their investments suffer when news of lengthy litigation is leaked, especially in areas like New York City where construction problems can undermine the reputation of an entire condo or apartment building. All those involved in real estate and construction litigation need an experienced and knowledgable New York real estate litigation lawyer to provide them with advice and guidance as they work to resolve their lawsuits as quickly and effectively as possible.
Property Values Affected by Real Estate and Construction Litigation
In most major cities throughout the United States, the most expensive condos and houses are located at prestigious addresses and are well-known for their amenities, their views, their locations, and their high-profile residents. When problems develop in these high-priced homes, those who purchased the properties could see the cache of their building affected and could see the value of their investments rapidly decline. Condo owners, who often already pay significant fees to live within their buildings, could also see costly special assessments as they pay for legal fees to litigate issues arising from construction defects.
The Washington Post recently reported on one luxury D.C. condo building that is being called a “death trap” by some owners. Owners, who are being forced to move out for the summer as repairs take place, are suing for more than $30 million in actual and punitive damages after negotiations with the contractors and developers failed.
The problems reportedly began with a water leak, which led to the discovery that some of the bathtubs in the condo units had been installed improperly. The walls behind the tub were opened up to try to remedy the problem and the condo board alleges that this revealed inadequate and dangerous fireproofing.
The condo developers have asserted that the condo owners are simply trying to “squeeze a wealthy real estate tycoon because of some minor construction flaws,” while some homeowners are reportedly so concerned about the safety issues in their condos that they have stopped letting their children spend the night and have put a fire extinguisher and easy-escape ladder in their rooms.
While the specifics of the dispute are going to play out in court, homeowners are complaining that news of the trouble has resulted in a reduction in property values. The fact that the homeowners are being forced to temporarily move out; concerns about the quality of repairs; and worries about special assessments adding thousands to condo fees are all possible reasons why property values of affected condo buildings may be adversely affected.
Litigation is public record, even if court transcripts are sealed (which does not always occur) and even if a confidential settlement is eventually reached. This means that while people may not know the details of how litigation or settlement plays out, news of the lawsuit can hit the news or can become well-known in real estate circles. This has serious consequences for property owners of expensive condos and houses who may hope to sell some day.
An experienced real estate litigation lawyer will work hard to resolve real estate disputes as quickly as possible in order to reduce the adverse impact of protracted litigation on property values. A qualified and experienced real estate attorney can also help homeowners and developers to argue for their preferred outcome in litigation arising from allegations of construction defects.