Who Should Pay for Homes Damaged by Public Works?

A common scenario: While conducting a public works project on a city road, city workers punctured a water pipeline that eventually flooded a home and caused structural damages and mold contamination. The family had to be relocated to a rental unit because the home was uninhabitable. The home also had to be decontaminated and repaired. Who should pay for these damages?

The homeowner has the right to recover damages from the government agency that owns or operates the public project. The homeowner is entitled to the following damages:

  1. Repair or restoration costs. These would be the costs of putting the home back to its original condition before the damage. For repairs and restorations, it is best to hire reputable contractors with proven track record for this type of work. Pick a bonded contractor that has an excellent history with the Better Business Bureau.
  2. Replacement costs. These are costs to replace damaged personal items such as appliances, furniture, artwork, and other valuable items. To determine this amount, the homeowner must do an inventory of the items so damaged. (In fact, it is advisable for homeowners to keep an inventory of items that they own, the dates and costs of purchase, particularly if they keep important and valuable items. Such an inventory will be useful if a loss occurs and a claim needs to be filed.)
  3. Diminution of Value. Sometimes, the damage to the property may be permanent such that no amount of repair can restore it to its original value. This loss in value must be established by experts. The lost value is part of the homeowner's damages.
  4. Appraisal, engineering and other expert fees. The services of experts, such as engineers (structural and soil experts), real estate appraisers (for reduction of property value), environmental consultant (for mold and asbestos) and other professionals may be required in establishing the full extent of the damages caused by the project. The experts' fees are part of the homeowner's damages because these services would not have been needed had it not been for the damage.
  5. Additional Living Expenses (ALE). These are expenses incurred when the property owner is unable to live at the property due to the damages or ongoing repairs. These expenses would include rental and other additional living expenses that the homeowner would not have incurred if they were at their own property.
  6. Physical Injuries and Emotional Distress. The homeowner or family members may suffer illness, injuries or emotional distress because of the damage to the property. If so, they are entitled to recover medical expenses as well as general damages for pain and suffering.
  7. Attorneys fees and litigation costs. The law allows property owners to recover attorneys' fees and costs should it become necessary for the homeowner to pursue a claim by litigation.
  8. Legal interest. The homeowner is also entitled to interest at 10% of the total repairs or replacement costs.

To protect their rights, property owners whose properties have been damaged by public works, must file a claim with the proper government agency concerned. The claim must be filed in an official claim form within 6 months from the time the damage was caused.

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