The New York State AVOID Act, effective April 18, 2026, dramatically shortens the time defendants have to bring third parties into a lawsuit. This means your ability to shift liability to subcontractors, vendors, or other responsible parties now depends on acting very quickly.
For real estate owners and property management firms, this affects risk transfer, insurance claims, and litigation strategy.
What the AVOID Act Actually Does:
- Creates strict deadlines for bringing in third parties – Defendants generally have 90 days after serving their answer to file a third‑party action. After 90 days, you need a court order to add anyone else. No third‑party claims are allowed after the note of issue (when the case is certified ready for trial) unless the court finds “good cause.”
- Special 90‑day rule for claims against a plaintiff’s employer – The 90‑day clock starts when the employer’s identity becomes known, or you know or should know the plaintiff suffered a “grave injury.”
- Late filings are automatically severed or dismissed – If a third‑party claim is filed late, the court must sever or dismiss it without prejudice.
- No consolidation if you have to file a separate action – If your late third‑party claim gets severed and you file a new lawsuit, you cannot consolidate it back into the main case.
As a property owner or property manager, it is imperative to have all contracts, COIs, and additional insured endorsements ready immediately. Because the deadlines are so short, your insurer and attorneys will need everything as soon as a claim is filed. If your insurer cannot identify responsible third parties within the new deadlines, you may lose indemnification rights or additional insured coverage and face increased litigation costs for late filing. This can leave your policy paying for losses that should have been transferred elsewhere
Early reporting is now critical. Waiting to notify your broker or insurer, even for what seems like a minor incident, can jeopardize your ability to bring in other responsible parties.
Review your subcontractor and vendor agreements for proper indemnity and insurance language as soon as possible. Our Contractor Review department is here to help.
Please don’t hesitate to reach out to us with any questions.
