Why ‘Building Next Door’ Can Be a Catastrophic Risk

With major construction projects increasingly taking place alongside existing buildings, the risks to adjacent properties can be significant. Michael De Chiara examines how excavation, dewatering, soil displacement and the loading of new structures can unintentionally affect neighboring buildings—sometimes resulting in claims worth tens of millions of dollars or more.

Increasingly, adjacent and nearby structures are inadvertently being detrimentally affected by major building projects. The damages that result from these issues, when they occur, can be substantial in terms of their physical impact and, when they occur, often result in significant monetary claims, sometimes in the tens of millions of dollars, sometimes even more.
Why does this happen? How does this happen? How can these potential risks and resultant damages be avoided? This article will address these points based upon a general review of basic engineering approaches and significant experience.

Building codes only contain limited admonitions regarding how new buildings should not impact existing structures. Based on hands-on experience with several of the most significant “building next door” construction cases in the last ten years, it is abundantly clear that this enormous risk is not well understood and most often not properly analyzed.

The “why” damages occur to adjacent properties portion of the discussion is straightforward. The why is caused by various building methodologies and techniques used for new projects that can unintentionally impact adjacent structures.

They are also caused when adjacent properties have structural or foundational issues that are not apparent or readily discoverable from an analysis of the plans of existing structures or from typical non-invasive physical examinations of the existing adjacent buildings.

Let’s start with a developer who is unaware of the potential damages its new project may cause. Why would a developer be unaware? Even the most sophisticated developers are not structural or geotechnical engineers, even if they have a few engineers on their staff.

While some developers may have a general sense of the potential impact their projects have on adjoining properties, they rely on their structural and geotechnical consulting engineers to inform them of the risks their projects present as part of the design process but fail to engage them to properly analyze this potential problem.

Often, the potential problems start even before the engineers are retained with the initial scope of services not contemplating evaluation of other adjoining properties in the neighborhood.
Further, some developers are reluctant to expand the scope of engineering services to include more robust studies of the potential impacts of a new project on adjoining properties, either due to economic concerns or due to an under-appreciation of the substantial risks most major projects may pose to adjoining properties.

Historically, the impacts that new projects have on adjacent properties has simply been ignored or under appreciated. This is reflected by most building codes which only focus on a particular project looking inward at the structure being designed and does not require formal studies or analysis of the impacts on adjoining properties. Thus, when engineers are developing plans for a new building, they are generally only focused on that structure and not on the impact that structure may have on adjoining structures.

Generally, to the extent building codes consider adjacent properties that are addressed by some limited admonitions regarding how new building codes may impact adjoining structures and are then generally silent on the subject. So, the building codes as currently written don’t adequately address this issue.

Next, unsophisticated developers are focused on controlling costs when it comes to both retaining engineers and limiting their scope of services. That focus often results in significant pressure to minimize fees for engineering services related to understanding the effects imposed by a project on the surrounding sites.

Given that the fees for professional design services are a very small percentage of the overall initial cost to construct a new building, sophisticated developers understand the clear benefit of a more comprehensive engineering analysis and potential solution before the construction gets underway.
The potential impacts a new structure might have on adjacent pre-existing structures is frequently overlooked or insufficiently analyzed and sometimes, the results of this failure to assess impacts can have disastrous results.

The “how does this happen” portion of the analysis is very apparent. The foundation of a substantial new building involves removing massive amounts of soil, which in and of itself may destabilize adjoining structures. Often, when a new foundation is being dug for a substantial structure, there are potential ramifications to surrounding properties related to dewatering which are not comprehensively investigated.

In a recent matter, the adjoining project was pumping out approximately five (5) million gallons of water per month for several years. This massive dewatering was necessary to construct the adjoining project; however, this huge amount of dewatering likely had some impact on the adjoining project, which along with other factors contributed to the well documented issues for that building. In that case, all related design teams took significant measures to address the dewatering, and there was never a definitive finding one way or the other, that the dewatering had a negative impact.
There are other physical impacts that new construction may have on adjoining properties, many of which are becoming increasingly well understood by geotechnical and structural engineers. How does not just the displacement of soil and dewatering affect adjacent properties, but once the new structure is in place, how that structure interacts with the earth and how those impacts may affect the building next door must always be properly evaluated but are often not sufficiently studied.
The “loading” of an adjoining site, that is the placement of millions of pounds of an enormous structure can negatively impact adjacent properties. This is an analysis that must be jointly undertaken by the structural and geotechnical engineers for a project but is typically not done to the full extent necessary.

So, the avoidance part of the analysis is the most obvious but also the most ignored. The prudent developer should spend the time, money and effort to properly and thoroughly investigate and analyze how a new structure will impact those structures near the new structure.

In terms of dollars, a proper analysis will not be cheap since it will necessarily involve complicated and sophisticated models and analysis.

However, the potential damages if this effort is not undertaken can be hundreds or thousands of times more expensive than failing to do so. The most sophisticated developers recognize this risk and include a substantial allotment of funds to properly address and mitigate this risk. Hand in hand with spending the money is to spend the money intelligently.

An intelligent spend is to hire high quality and experienced engineers and have them explain, before they are hired, how they would investigate this issue to best protect adjoining properties. Explore the experience of your structural and geotechnical teams in dealing with investigating and analyzing adjoining properties. Ask them about their experience in this crucial area. Then and only then, go forward with your project.

Michael K. De Chiara is senior partner at Zetlin & De Chiara.

To read the full published article: https://www.law.com/newyorklawjournal/2026/09/29/why-building-next-door-can-be-a-catastrophic-risk/