I'm putting in a brick patio in the back of my Victorian twin. There is a drain to the water main at the base of the house next to the foundation (the gutter pipe empties right into it). The drain pipe then runs through an unfinished basement on its way to the main at the front.

My contractor wants to grade the patio toward this drain, and thus towars the house. I was always told that everything should grade away from the house. If the patio does grade away from the house, I'm not sure where the rain water would go. The patio is surrounded by brick/stone walls and my neighbor's patio.

Thoughts anyone?

Your instincts are right. If the drain becomes clogged, which isn't totally out of the question, then water will begin to pool by the house and that can eventually make its way inside. It also depends how far this drain is away from the house. If its 12+ inches away from the foundation, it is possible to slope that portion from the house. Essentially you just want to avoid the possibility of water pooling up against the house.

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As George said, definitely it should drain away from the house. I have (2) drains near my house where my garage is, which constantly get clogged with mud / leaves / neighbor's trash / etc., and anytime there is a significant downpour I get water in my basement (my garage is basement level). I would have the contractor install a new drain at the other end of the patio, or in the center somewhere, and connect into the existing drain.

I third the motion. I recently noticed I've got significant erosion going on below the sidewalk behind my house because of how the yard slopes.

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It sounds like the best option is moving the drain to the far side of the patio. It's an unfinished basement (and it never will be finished--we love having the exposed wiring and pipe for when things go wrong) but I don't like the idea of anything seeping in from the outside.