City looks to clarify rules on who pays for property damage from construction work

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City looks to clarify rules on who pays for property damage from construction work

Homeowners with unexpected property damage from construction projects may have a clearer path to compensation if the city rewords its contracts and revamps its website.

Those were two out of four recommendations found in a report approved by the city's executive committee Monday. 

Council committee heard that in most cases, the city is not liable for property damaged during projects such as drainage replacements or LRT construction. In those cases, the contractor is on the hook.

"We do have some sort of fiduciary responsibilities to at least let people know what their rights are," Coun. Mike Nickel said. "If you're going to sue somebody for example, or if you have a complaint against somebody, is it the city or is it the contractor?"

Administration also recommended that the city make it mandatory for contractors to report any private property damage.

"What happens when a private individual has a concern with a contracting company and how is that solved?" Coun. Tim Cartmell questioned. "We have no way of tracking that because we're not a party to that disagreement."

Coun. Nickel said the data could allow the city to monitor contractors' performance better.

"Weed out the bad contractors by just getting the record," Nickel said. "If they've been sued or not and by whom." 

Claims against the city, such as damage from potholes, icy sidewalks and flooding damage due to drainage culvert, have gone down since 2014.

The city paid $3.1 million for third-party claims in 2017 down from $5.1 million in 2016 and $4 million in 2014.

In 2017, 98 per cent of the claims were resolved in the city's favour, up from 80.6 per cent in 2016.

Using the new data

If approved, any information collected from property damage claims could help the city evaluate companies on future bids for projects.

"We might then build up a store of information that says 'ought you to get the next job?'" Cartmell said. 

The report by the city's finance and corporate services branch also proposed giving the city authority "to settle low-value construction-related claims" by reimbursing the residents first. Then the city would charge the costs back to the contractor.

But more information will need to be added to the city's website to make it clear for the public as to "why a claim might be appropriately denied by the city or its contractors," reads the report. 

City administration is expected to report back to councillors in the summer on implementing the proposed contract changes.