Neighbour disputes: is your insurance up to date?

A new law concerning neighbourhood disputes took effect on 1 September of this year. What is new is that judges now have considerably more scope to impose measures. With the previous regulation (art. 544) the outcome of a court case almost always required the guilty party to pay a certain amount to the injured party as financial compensation for the damage incurred. This measure still applies. For instance, if the walls of a house develop cracks because of major building work being carried out on an adjoining site, a judge may decide that these cracks must be repaired at the builder’s expense.

However, judges have now been given a number of additional options, i.e. they can also impose compensatory measures. For example, the court may order a developer to make modifications to a damaged property to ensure that the injured party is no longer inconvenienced by the work. Moreover, the judge may also decree that the nuisance activities be suspended in order to reduce them to an acceptable level. For example, if a construction company wakes up the residents in the houses adjoining the construction site using jackhammers and drilling machines at 6 o’clock every morning, the judge may decree that the work must not commence before a specific, more acceptable time.

These new measures consequently do not immediately result in compensation for the damage incurred, although they usually do have a financial impact. Construction work that can only commence hours later than planned each day will probably result in additional expenditure for the construction company, but legally this will not be considered damage compensation. This also has repercussions for insurers and insurance policy holders. All in all, insurance policies do not cover liability for nuisance caused by neighbours, they only provide compensation for damage arisen as a result of this nuisance. This means that an insurer does not actually have to intervene in the payment of costs if they do not constitute compensation for damage.

It goes even further, because another new measure stipulates that a judge can now also impose preventive measures to avoid neighbourhood nuisance. Suppose, for example, that a construction company wants to develop a site, but the adjoining plot contains a house that is known to have old and weak foundations. In such cases it may be decreed that the foundations must be strengthened at the expense of the construction company if the house is at risk of subsidence. Again, this is not considered compensation, although it will have a significant impact on the final cost of the construction project.

This new legislation (articles 3.101 and 3.102 of the Civil Code) now provides a more extensive definition of the concept of abnormal neighbourhood nuisance. This in turn could lead to more measures being taken to compensate or prevent nuisance. However, the financial consequences of these measures will not always be guaranteed. The need to coordinate clauses in contracts and guarantees in insurance policies has, therefore, become even greater than before. Being a specialist broker in the construction sector, Vanbreda Risk & Benefits can provide the necessary advice in this respect. We have already adapted any relevant clauses in our own policies to comply with this amended legislation. Our claims department for the construction sector is obviously closely monitoring the development of these new laws.