Post-Repair Diminution in Value Claims: 'Stigma Damages' in Future Cases
Owners' counsel may contend, for example, that a residential condominium building's repair history should be a relevant consideration when determining damages, as a result of a stigma associated with buildings where the property's reputation has been allegedly damaged, often where there have been water infiltration or mold issues.
August 16, 2022 at 12:06 PM
12 minute read
ConstructionThe scope of an owner's claims for damages in construction defect litigation against the general contractor and its subcontractors is often thought of as the costs of repair, plus any consequential damages such as lost profits or rents if not waived in the contract. But what about the ability of an owner to seek recovery for diminution in value to the building or improvement over and above the costs of repair—so called "stigma damages"? Owners' counsel will sometimes contend that even after extensive repairs to correct construction defects have been completed to bring the condition of the building as was warranted under the contract, the owner is still entitled to damages for alleged diminution in value of the building. Such "post-repair diminution in value" claims often are asserted in relation to claims involving residential, especially condominium, projects, where state law disclosures by sellers (indeed even secondary sellers) of residential units are mandated. Owners' counsel may contend, for example, that a residential condominium building's repair history should be a relevant consideration when determining damages, as a result of a stigma associated with buildings where the property's reputation has been allegedly damaged, often where there have been water infiltration or mold issues. See, for example, Orkin Exterminating v. DelGuidice, 790 So.2d 1158, 1159 (D.Ct.App.Fl. 2001) (the court references diminution in value damages as "stigma damages").
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