Section 5.9.2.4.4 Stigma Damages

• Library: Construction Law Practice Manual 3rd Edition 2016

§ 5.9.2.4.4 Stigma Damages

The diminution in value resulting from a perceived problem with a property is commonly referred to as “Stigma Damages.” There is no Arizona case law providing for recovery of Stigma Damages incident to properly repaired defective construction; however, there is ample case law on other diminution claims. Stigma Damage claims arose out of toxic tort cases wherein a property had been the site of toxic dumping for years. Even after clean up, the land purportedly retained the stigma of being contaminated and hence its value dropped. Contractors frequently argue that once a property is remedied there is no stigma because the property is now the way it should have...