Construction risks associated with "new urbanism" projects such as high-rise condominium towers are different than those for single-family homes, a building consultant said.

But developers can learn from some of the mistakes made by home builders that have led to a mountain of construction defect litigation in Las Vegas, said Don Neff, president of Irvine, Calif.-based La Jolla Pacific, a third-party quality assurance service.

They can use what they learned to be more proactive with risk management strategies, Neff said Thursday during a trip to Las Vegas in which he spoke to insurance company representatives.

"We're training them on what to look for in midrise and high-rise inspection protocols and to help their builder clients build better projects," he said. "For example, there's a lot of new acoustical issues. That's not a problem with single-family detached homes but becomes much more critical in the midrise and high-rise products."

Major risks of construction defect litigation on these types of projects include water intrusion, acoustical soundness, common wall and ownership separation issues and mechanical, electrical and plumbing problems, Neff said.

"These are all much more critical concerns for both residential occupants and retail tenants," he said.

Insurance premiums have doubled in the past couple of years, with some builders paying about $650,000 a year on a $5 million to $20 million project, Neff said.

Perry Vandenberg, a broker for Willis Insurance in Las Vegas, said one of the major differences between single-family housing and high-rise, mixed-use development is legal exposure.

"The issue is that claims are so much higher, especially on these $80 million high-rise condos," he said. "The other difference is even though it's a residential project, it's actually of commercial grade with experienced commercial (subcontractors) doing the work. The inexperienced labor ends up on the residential side, rather than commercial. That's why insurance is so expensive."

There are also challenges with building products, Vandenberg said.

For example, the exterior finish insulation system that's used on a two-story home is different than that of a 38-story high-rise because the scaffolding needed for the work can't be built that high.

Buyers of luxury high-rise condos generally have a different expectation than buyers of single-family detached homes, said Terry Buckner, president of The Buckner Group, a Salt Lake City-based insurance brokerage.

"High-rise is a little different animal because you have architects in place before they break ground and there's detailed designs to give clearer expectations of what the buyer's getting," Buckner said. "The other thing is you probably have better construction materials on a high-rise."

Neff said concrete and steel buildings require more exacting standards of performance than nonrated, wood-framed homes. He likes to focus on the design of building components, such as floor-ceiling assemblies and common-wall assemblies that are a big part of the acoustical issues.

Buildings need to be commissioned with heating, ventilation and air conditioning equipment.

Fire protection systems and elevator conveyances must be programmed, tested and proven to be up and running before a building is "turned over" for occupancy.

"The downside is you have a concentrated group of buyers who are screaming for a class action lawsuit," Buckner said. "For an attorney, you have one pocket of owners and all you have to do is go the president of the homeowners' association, not all 200 owners. So there's a huge financial incentive for attorneys to chase class action suits."

Vandenberg said condominium conversions are tricky projects to insure because they were built as apartments so it will not be unusual for residents to hear sounds from adjoining units.