What does the Party Wall etc. Act 1996 say?
“An adjoining owner may serve a notice requiring the building owner before he begins any work in the exercise of the rights conferred by this Act to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.”
But what does this mean?
Here are some key points to note:
• The adjoining owner must make their request for security in writing by serving a notice to the building owner.
• If notice is served, the building owner carrying out the construction works may be required to make a deposit to cover foreseeable expenses that may arise from the notifiable works.
• The adjoining owner and building owner can agree the type and amount of security themselves without the need of party wall surveyors. If a dispute does arise however, the appointed surveyors will agree the security on the owners’ behalf.
• The security can only be in relation to notifiable works and not any other issues that arise from the remainder of the project.
What is security for expenses?
Security for expenses is a mechanism which protects adjoining owners from foreseeable damage. This could be damage from the building owner failing to complete a construction project or to cover the cost of completing repairs caused by their notifiable works.
Previously, security in the form of money may have been held in a solicitor’s account with an undertaking that the money would only be released on instruction from the appointed surveyors.
However, in 2014 the Solicitors Regulation Authority advised that solicitors should not be providing these banking services unless there is a true connection between the parties and the legal services being provided by the solicitor. It is rare for a solicitor to be involved with a party wall matter, unless something has gone particularly wrong!
As a result, money is more commonly held in an escrow account. Some RICS Regulated firms can also hold funds in a client account. When held by an RICS Regulated Firm, the money will be protected under the RICS Client Money Protection Scheme. Alternatively, security can be made through bonds or insurance, although the use of insurance can be controversial. This is because it can potentially undermine the surveyors’ statutory authority to deal with disputes that arise as a loss adjuster would be appointed to investigate claims of damage. This could also delay the course of repairs which can be frustrating and leave the adjoining owner vulnerable to further damage.
Additionally, security for expenses is beneficial for protecting parties in the event of insolvency of the contractor or party carrying out the works during the project.
What can security for expenses cover?
The Party Wall Act is not specific on what security for expenses can cover, however it is largely agreed that security for expenses can cover:
• Repairs to an adjoining owner’s property when damage is caused by the building owner’s notifiable works.
• Expenses for making the adjoining owner’s property safe and secure should the building owner abandon the project.
• Temporary accommodation if necessary and any associated costs or fees.
• Professional fees in relation to resolving the dispute.
• Alterations or reinstatement of the works undertaken by the building owner, particularly in the event of the building owner failing to complete their works leaving the adjoining owner’s property vulnerable to damage.
What should I do if my request for security for expenses is refused?
When a building owner refuses a request for security, a dispute will arise under the Party Wall etc. Act 1996. Party wall surveyors will be appointed, whowill then determine whether security for expenses is reasonable for the situation.
The surveyors will consider whether security is required, how much security is reasonable, how the security will be held and the control mechanisms and timelines for using the security or releasing the funds back to the building owner. The surveyors’ role is to calculate foreseeable damage and they may obtain cost estimates from contractors or other professionals to assist in their determination. Once these have been considered, the surveyors will document this in a party wall award.
When will the security for expenses be deposited?
Before any notifiable works proceed, the party giving security for expenses, usually the building owner carrying out the works, will deposit the agreed sum into the agreed account.
When will a Building Owner get their money back?
Security is often released in stages as the notifiable works are complete and the two surveyors are happy that the works have been completed to a satisfactory standard. However, every situation is different, and advice should be sought from a party wall surveyor as to the release mechanism. This will also be documented in the party wall award. It is important to remember that the funds will only be released when agreed by both surveyors.
What Does the Party Wall etc. Act 1996 Cover?
The Party Wall etc. Act 1996 is a primary legislation that talks all about party walls, and excavation and construction within certain distances of neighbouring buildings or structures. Most people are a little confused by the title of the Act, especially as it isn’t clear what ‘etc.’ means. Since etc. means ‘and so forth’, the act really explains the rights and obligations to owners to all sorts of things on top of works to party walls – including excavation. If you’re not sure what’s included, we have videos on our YouTube channel that explain exactly which works are notifiable.
Basically, Section 1 of the Act relates to a new building or wall on the line of junction, the legal boundary between two buildings or land ownerships. Section 2 of the Act relates to work directly to an existing party wall, and Section 6 of the Act relates to excavation within three or six metres of an adjoining structure or building.
What Is A Party Wall?
Party walls are defined by section 20 of the Party Wall etc Act 1996, which also gives us some good definitions for other important terms used in the Act. In the Act, there are two types of party walls:
Type A: The Act defines this as ‘a wall which forms part of a building and stands on the lands of different owners to a greater extent than the projection of any artificially formed support on which the wall rests.’
Type B: A type B party wall is essentially a wall separating two buildings, which has been built right up to the boundary line wholly on the land of one owner. This type of party wall does not straddle the boundary.
Type B can get a little confusing, but not as much as part A, so we’re going to clear that up.
Firstly, to be a type A party wall, the wall has to form part of a building (not necessarily the main building of the house), and the wall must straddle the boundary line. It doesn’t have to straddle that line equally, it just has to be on both sides of the line to be considered a party wall. The second part of the definition talks about the foundations that the wall is supported or built on. Basically, this means you ignore the position of any foundations even if they go across boundaries. The concern with party walls is the position of the actual wall, not the supporting foundations.
And most importantly, when a party wall is on the line separating two owners’ land, the entire wall (full height and length) is considered a party wall, and both owners have the right to make use of the wall.
Garages on Party Walls
Often, we will speak to people whose neighbours have built a garage up to the boundary line, and want to know if that is now a party wall. If the wall is detached and not separating the two buildings, then it’s not a party wall. We’ve had situations in the past where an adjoining owner doesn’t want the building owner to knock down what they see as their garden wall, but it’s actually the neighbour’s garage. In this case it hasn’t been enclosed upon, and so isn’t a party wall as defined by the Act, so there’s very little they could do.
However, if you were to then extend your property and enclose on a wall like this one, so that it becomes the separation between two buildings, that section of wall would become a Type B party wall. It’s important to know that you can’t do this without permission from your neighbour, and if you do it without getting consent by serving a party wall notice, then it’s considered trespass.
Are Garden Walls Party Walls?
Ahh, garden walls get even trickier. Garden walls are called ‘party fence walls’ in the Act. Just to confuse things, fences aren’t actually party fence walls! To clear that up, it’s best we look at the act:
‘” Party fence walls” means a wall (not being part of a building) which stands on the lands of different owners and is used or constructed to be used for separating such adjoining lands, but does not include a wall constructed on the land of one owner the artificially formed support of which projects into the land of another owner’.
So like a Type A party wall, the second part of this definition is talking about the foundations of the wall. This means you simply ignore the position of the foundations, even if they encroach over the boundary. Again, we’re concerned with the position of the wall itself when figuring out if it’s the party fence wall or not. Simply put, a party fence wall is a garden wall that sits astride the boundary of two lands.
Wait, so What’s a Party Fence?
Don’t worry, we know it’s confusing, and we’ve had people call us many times because their title deeds state that the fences defining their boundaries are referred to as party fences, and they don’t understand what that means. All it usually means is that the maintenance responsibility for those fences is shared between both neighbours – it doesn’t mean those fences are covered by the Party Wall Act. In fact, if this phrase is included, your deeds probably preceded the Act!