The Impact of Property Owner Involvement in Construction Projects

Whether you are a property owner looking to start a project or a contractor hired by a controlling client, you should be aware that the property owner’s level of involvement in the project can have serious consequences in the event of a lawsuit. Regardless of whether the property owner hires someone to act as the general contractor, that owner may be found by a court as a de facto general contractor if he or she exercises a certain amount of control over the project. As a result, a property owner unfamiliar with the ins and outs of a construction project may be saddled with a legal and financial responsibility to answer for accidents and/or defects on the project.

The New Jersey Appellate Division case of Costa v. Gaccione, 408 N.J. Super. 362 (2009) provides some of the framework for considering a homeowner as a project’s general contractor. In Costa, it was alleged that the property owner defendant “performed many of the general contractor functions; he hired various subcontractors and an architect, scheduled their work, and purchased building materials which the contractors requested. [The property owner] frequented the job site, oversaw the work and performed some managerial tasks.”

In his defense, the property owner argued that he did not retain control over the means or methods of the work or work-site safety; instead he relied on the contractors’ “professional experience” to perform the work correctly and safely. The trial level court agreed with the property owner that he did not have a duty to answer for a worker’s injury and dismissed the claims against him. That decision, however, was reversed on appeal. The Appellate Court found that the property owner’s role in purchasing materials, discussing plans with various builders, frequenting the job site and overseeing the work transformed his role into that of a general contractor and were important factors that a jury must consider in evaluating his responsibility for a worker’s injury during the project.

It is entirely reasonable that a person spending a significant sum of money to build or renovate their home would want to exercise some degree of control but doing too much can expand homeowner liability in an unfamiliar field. In that same vein, the homeowner getting too involved may limit the duty and liability of the person hired to be the general contractor. As the Costa court noted, hiring various trades instead of allowing the contractor to hire his or her own trades, purchasing materials yourself and exercising oversight of the work are roles that may make you the general contractor as a matter of law. That is a result that can have a serious financial impact. An experienced attorney can assist those involved in construction projects as to the risks of their roles and the claims and defenses available to them in the event of a lawsuit.

The attorneys at Hoagland, Longo, Moran, Dunst & Doukas, LLP are well versed in handling cases involving construction accidents.  For more information please feel free to contact our General Liability Attorneys or call 732-545-4717.