LADBROKE ASSOCIATION

The conservation society for the Ladbroke Conservation Area of  the

Royal Borough of Kensington and Chelsea

   

 

 

 

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BASEMENT DEVELOPMENT AND PARTY WALL MATTERS

 

GUIDE TO WHAT CAN BE IN A PARTY WALL AWARD

 

                                                                                  

 

   The recent fashion for excavating basements and sub-basements below houses in residential areas has brought misery to many adjoining owners because of the noise, vibration and dust during the often lengthy construction period. A high propertion of adjoining buildings also suffer cracks and other damage.  Some of these problems are unavoidable. But some could be prevented or mitigated by ensuring that appropriate provisions are included in the in party wall award.

 

   This following is intended to explain to those unfortunate enough to live next door to a basement development what can be in a party wall award, so they can discuss it with their surveyor. It is up to the surveyors, however, to decide what should be in the party wall award, rather than the owners who appoint them. The surveyors are effectively acting in a quasi-legal capacity and they must, in drawing up the award, consider what is reasonable and fair to both parties.

 

In drawing up this document we are indebted to the help and advice that we received from Fresson and Tee Chartered Surveyors.

 

 

 

Building Owner = the party undertaking the works.

Adjoining Owner = the party in the neighbouring premises (including long leaseholders).

 

                  

 

INDEX

 

 

 

 

 

 

1. General clauses

             

Party wall awards normally include a number of standard general clauses:

 

  • A clause stating that the wall separating the Building Owner’s and the Adjoining Owner’s premises is a party wall within the meaning of the Party Wall Act or that the Adjoining Owner’s building stands close to or adjoins the Building Owner’s premises within the meaning of the Act. This is important as only works on the party wall or (in the case of excavations) within certain distances of the party wall fall within the party wall award system. If there are problems with any other works on the site, they have to be dealt with under common law.

 

  • A clause noting that a “schedule of condition” signed by both surveyors is attached to the award.  In the case of a major excavation, it is advisable for a full schedule of condition to be done of the entire adjoining building and any structures belonging to the property, together with photographs. There should also be a photographic schedule of the contents and state of the garden and plants where appropriate. These days, the photographic record is often stored electronically on a file to which reference is made in the award itself.

 

  • A clause noting that the party wall as described in the schedule of condition is sufficient for the present purposes of the adjoining owner. This is to make clear that there has been no request from the adjoining owner for additional work to be done on the party wall on his behalf. If such work is required, see clauses in Section 7 below.

 

  • A clause noting that drawings of the agreed works are attached to the award and have been signed by both surveyors.

 

  • A clause making clear that the surveyors will not take responsibility for any designs.

 

  • A clause declaring that the award will be null and void if the permitted works do not commence within 12 months from the date of signature. This 12-month cut-off is laid down in the Party Wall Act.

 

  • A clause declaring that nothing in the award shall be held as conferring, admitting or affecting any right of light or air. This again reflects a provision in the Act (Section 9) and is to make clear that, although the Act may give the Building owner the right to do the works he is doing, it does not affect any other rights.

 

  • A clause undertaking that signed the signed versions of the award will be given to both owners immediately and an unsigned copy to the Adjoining Owner’s surveyor. In practice, the Adjoining Owner’s surveyor usually gets a photocopy of a signed version.

 

  • A clause declaring that the Surveyors reserve the right to make any further awards that may be necessary. The party wall award concluded at the beginning of the works sets out the agreement of the two surveyors as to how the work shall be done and other ancillary matters, such as the requirement to put right any damage. If circumstances change – e.g. an unexpected problem arises during the building works requiring a deviation from the agreed works – the surveyors will normally make a supplementary or addendum award. Similarly, if a dispute between the owners arises which cannot be decided under the terms of the existing document, for instance if there is an argument over the amount of damage, the surveyors have to get together and make a judgement. They must then set out their judgement in a supplementary award. If they cannot agree, a third surveyor must be called in to decide the matter. There may be several addendum awards during the course of a big and complicated project like a basement excavation.  

 

 

 

2. Fees

 

The award has to make provisions on who should pay the fees of both the surveyors. The Party Wall Act does not lay down who is responsible for the fees, so theoretically the surveyors have the right to determine any allocation between the owners as they see fit. However, as the building works are for the benefit of the building owner, it is standard practice for the party wall award to provide for all the fees to be met by the building owner. This includes fees for the work in connection with the preparation of the award; inspections of the works; and, if necessary, checking the schedule of condition on completion to check whether there has been damage. If the work benefits the Adjoining Owner as much as the Building Owner – for instance if a party wall needs to be rebuilt because it has not been properly maintained – then for the costs would normally be shared between the owners.

 

   The Adjoining Owner does not normally have to pay his surveyor’s fees for advice given after a party wall notice has been served but before a party wall award has been signed. But any advice sought by the Adjoining Owner before a party wall notice has been served must be paid for by him.

 

   The fees will normally cover periodic inspections of the work. They will not, however, cover constant supervision of what is happening on the site, as this is not the job of the party wall surveyors but of the supervisory personnel employed by the Building Owner. However, if a problem arises, such as undue damage to the Adjoining Owner’s property, then the latter can reasonably expect his surveyor to look at it, even if an inspection is not due.

 

   The award may also provide for a further fee to cover any work required by the surveyors if for some reason different or additional works are required – e.g. if an unforeseen snag emerges such as unexpected flows of water or ground conditions that make the planned building methods unsuitable, and an addendum award needs to be prepared.

 

   In the case of major basement excavations some damage is probably inevitable. So an award dealing with a basement excavation might also provide for a further fee to be payable (again by the Building Owner), to cover the reasonable costs of the preparation of a schedule of damages and if necessary a schedule of works to make good the damages, as well as any necessary inspections of the remedial works to ensure that they have been adequately carried out.

 

   The award will also normally provide that, in the event the event of a third surveyor being called in to resolve disputes, his fees shall be met by the Building Owner, the Adjoining Owner or both of them as the third surveyor sees fit. Usually the third surveyor will decide that his fees are payable by the party whom he finds against.

 

   It is likely to be reasonable in any complicated structural works for the Adjoining Owner’s surveyor to employ a structural engineer to advise on the proposed work and on their execution, and it is normal (although not specifically required by the Act) for the reasonable fees of the structural engineer also to be met by the Building Owner. This needs to be covered in the Party Wall Award. 

 

   The award may also provide that, if there are disagreements at the end of the work over the damaged caused, any independent advice needed from a structural engineer shall be given by a structural engineer other than the one involved in overseeing the works on behalf of the building owner, and his reasonable fees will be met by the Building Owner if the damage is found to have been caused by works covered by the Act. This is to cover the situation where the Adjoining Owner has not employed a structural engineer but one is needed because of a dispute on damage.

 

   The case of van Maanan v. West Greenwich Developments LLP (2009) has raised some doubts over the direct recoverability of surveyors’ fees from the Building Owner. Although these are likely to be ultimately recoverable as a civil debt (for instance the courts could put a charge against title), to avoid arguments over the Building Owner’s obligation to pay the fees awarded, a separate exchange of letters with the Building Owner can be arranged to place the matter on a clear contractual basis.

 

 

 

3. Description of the proposed work and method statement

 

   The award normally includes a “method statement” or detailed description of the work to be carried out, including any under-pinning, together with appropriate plans and diagrams.  Although the decision on the works to be carried out lies with the Building Owner, Section 7(1) of the Party wall Act requires the Building Owner to avoid “unnecessary inconvenience” to any Adjoining Owners or occupiers; and Section 10(12) says that an award may determine “the time and manner of executing any work”. On the basis of these sections, if the Adjoining Owner’s surveyor considers that the same result can be achieved without delay or extra cost by methods or in a sequence that would cause less disturbance to the Adjoining Owner, he may seek to negotiate changes to the original proposals as part of the preparation of the award.  Changes would only be agreed, however, if they were considered “reasonable”. Anything that added substantially to the costs or the time the project would take would be unlikely to be considered reasonable.

 

   In some cases, there may still be uncertainties making it desirable that further investigation of certain issues, e.g. potential groundwater problems, should be undertaken. In such cases, the award could require these extra investigations to be done – and any necessary extra design work – before work begins, or at certain points in the work. But it would be unreasonable to hold up making an award before every issue has been investigated if work not affected by the issues can be started before the investigations are complete.

 

   The award also normally provides that no material deviation from the agreed works shall be made without prior consultation with and agreement by the Adjoining Owner or, in the event of a dispute, by the appointed surveyors. So although the Adjoining Owner can object to changes, it is ultimately up to the surveyors to decide if they are reasonable or not.

 

   The main problem for Adjoining Owners tends to be the appalling noise, vibration and dirt caused over a long period by basement developments. Normally, the building owner moves out for the duration of the works and so does not suffer any noise nuisance. But the neighbours cannot do so and have to put up with what can be quite horrendous noise from pile-drivers, compressors, drills and construction traffic. As the Party Wall Act specifically binds the Building owner to avoid “unnecessary inconvenience” and the surveyors have powers to “determine the manner of executing any works”, it is tempting for the lay person to think that restrictions can be placed to control noise etc. in the party wall award. Unfortunately, in practice it is not so easy for various reasons:

 

  • It is generally accepted by the Courts that construction is necessarily a noisy, dirty business and that neighbours have to accept this. The party wall system was originally devised to facilitate construction, not to make it more difficult. It is not considered reasonable to slow the work down or to do it in a more expensive way just because it reduces the inconvenience to the neighbours – although a responsible Building Owner may well be prepared voluntarily to do things in a way that reduces the ordeal of the neighbours, especially as he will be living among them.

 

  • The courts also take the view that there is other legislation in place to deal with problems of noise pollution, traffic etc. This is of course true, although many would consider much of the legislation both hard to use and inadequate.

 

  • There is also the problem that the party wall award system applies only to work covered in the Party Wall Act, i.e. work actually on (or under or over) the party wall, or – the case of excavations – within a specified distance of the Adjoining Owner’s building. In practice, it is impossible to distinguish which noise or other nuisance factor is caused by the work covered by the Party Wall Act and which by other work on the site – a compressor and construction traffic, for instance, will probably be serving work on various parts of the site.

 

 

   Nevertheless, there is some scope for dealing with these matters in the party wall award. It is, for instance, fairly standard for the method statement to include a clause requiring the Building Owner to remove any temporary screens, hoardings or scaffolding as soon as they are no longer required and to clear away dust and debris from time to time as necessary. It would also be possible to include reference to any Council code of best practice.

 

   The method statement could include other measures to minimise nuisances such as noise if it is clear that the nuisance comes only from the work within the ambit of the Party Wall Act. It could for instance require noise monitors or specify the use of sound reduced compressors, electrically powered machinery (as opposed to petrol or diesel), appropriate acoustic enclosures,  “silent” demolition techniques, no sheet piling with diesel or air driven impact or drop hammer, the removal of plaster from pre-20th century brickwork by hand held hammer and bolster, etc. Again, however, a test of reasonableness must be applied by the surveyors – i.e. they must be satisfied that it is really necessary and appropriate to specify any of these for that particular project. 

 

 

4. Timing of commencement and completion of the proposed work

 

   The award will normally provide that the Building Owner may start work fourteen days after completion of the award, although he is not obliged to do so – i.e. he can decide not to proceed at all, or only with some of the works. If he does not start within 12 months, the award lapses.

 

   There is nothing specific in the Party Wall Act that requires the Building Owner to give advance warning of the works (except that work may not begin less than 14 days after the party wall award unless the Adjoining Owner agrees). But much potential friction can be avoided if the Adjoining Owner is kept fully in the picture as regards the expected timing of the works (and also as regards when they are complete, which is not always obvious). So it may be appropriate to ask the Building Owner to inform the adjoining owner say one week in advance of the day on which the works will commence and of their expected duration and the timing and duration of the main stages. It is also helpful if the Building Owner provides a programme of the different stages of the works, and of any changes to the programme as the work progresses.  But all this can normally be done informally.

 

   It is not always clear when work has been completed. So it could be useful to include a clause requiring the Building Owner to inform the Adjoining Owner and his party wall surveyor when the works are complete.  Note, however, that the work under the Party Wall Act may in some cases be completed before other work on the site.

 

   The Act (Section 6(9)) requires the Building owner, if requested on completion of the works, to supply the Adjoining Owner with plans and sections of the works done. This can be useful in the case of subsequent problems and it may be worth reiterating this requirement (i.e. making it a formal requirement) in the party wall award. If the works could interfere with some future building plans of the Adjoining Owner, there may be a case for the plans, together with a signed copy of the party wall award (including any addendum awards) and any consents obtained to be kept with the deeds, or possibly even registered against them, so as to facilitate any claim for compensation in the future.  See also the section on special foundations.

 

   The Act requires works to be prosecuted “with due diligence” and the party wall award ceases to have effect if this does not happen (s.3(2)).  A clause is often included in party wall awards to reflect this requirement, although strictly it should not be necessary. It is up to the surveyors to judge whether there has not been due diligence. There is an old court case (Joliffe v. Woodhouse) which provides a precedent for unreasonable delay being considered unnecessary inconvenience and for damages to be payable if it happens.

 

 

5. Hours of work

 

   The Royal Borough of Kensington and Chelsea, when granting planning permission for a basement development, normally includes an “Informative” on restricting the works to certain hours (usually 8.00-18.30 Monday to Friday and 8.00-12.30 on Saturday). Although the Council is often prepared to take action under noise pollution legislation if the hours are not observed, it has no other legal power to enforce these restrictions, so there is advantage in having the restriction set out in the party wall award as well.

 

   While noise is unavoidable, it can be rendered a lot more tolerable if particularly noisy work such as pile-driving and drilling can be restricted to certain hours when it least inconveniences the adjoining owner, for instance when the neighbour is out at work or away from home; or only in the mornings if the neighbour works from home in the afternoon; or outside a regular rest period for children or the elderly or infirm. The City of London, for instance, expects developers to sign up to refraining from noisy work between 10.00-12.00 and 14.00-16.00, thus giving neighbours at least four hours of peace during the working day. It is worth considering, therefore, a clause restricting the noisy work to certain days or hours where this would not impose unreasonable costs on the building owner. It needs to be borne in mind, however, any restriction on when noisy work can be performed risks delaying the completion of the works as a whole. Moreover, hours that suit one Adjoining Owner may not suit the one on the other side.

 

   It should be noted that any restrictions on timing in the award would bind the building owner only in relation to work under the Party Wall Act; works on other parts of the site could proceed outside any agreed hours. But the noisiest works are likely to be those covered by the Act, and a considerate building owner could normally be relied upon to restrict noisy work over the whole of the site.

 

 

6. Special foundations

 

   The Building Owner may not install reinforced concrete foundations, called “special foundations” in Section 7(4) of the Party Wall Act, extending under the Adjoining Owner’s land (including under the party wall) without the Adjoining Owner’s express consent. It may in some circumstances be in the Adjoining Owner’s own interest to have his wall underpinned by special foundations, as they may provide greater stability, and if consent is given, this should be recorded in the award. However, if the Adjoining Owner does agree to special foundations, there may be future cost consequences, so agreement should not be given lightly. In particular:

 

  • if the Adjoining Owner, or a subsequent owner of his house, at some time in the future wants to build his own basement extension or do work adding to the load on the party wall, he may find that his costs are increased as a result of the existence of the special foundations. In such circumstances, Section 11(10) of the Act gives him a right to claim the extra costs back from the Building Owner. This right has no time limit, but if several years have passed and the Building Owner’s house has changed hands and there is no readily available evidence, it may not be that easy to exercise the right. So it may be advantageous for a condition of consent to be that the Building Owner should attach to the title deeds and or register with the Land Registry both the plans of the foundations and the agreement to allow them. This could form part of the party wall award. The Adjoining Owner should similarly attach this information to his deeds.

 

  • Another situation arises if the Adjoining Owner wants later to make use of special foundations for his own purposes, for instance for putting in his own extra floor. Section 11(11) of the Act provides that if the special foundations have been financed solely by the Building Owner, he may then claim back a due proportion of the cost.  If, therefore, the Adjoining Owner decides to consent to special foundations, he may wish to negotiate as a quid pro quo an agreement that the Building Owner and his successor will not exercise this right. Again this should be registered against the deeds.

 

   If the Adjoining Owner does agree to special foundations, he has a right under Section 4(1) of the Act to require that they be placed at a greater depth than proposed, and/or that they be built to a greater strength than proposed to accommodate any building he has in mind to build later, using the foundations. He will need to serve a “counter notice” on the Building Owner to assert this right, and a description of what has been agreed should be recorded in the award.  However, he would normally be expected to bear the cost of any work done purely for his convenience rather than because it is necessary for the stability of his building. The allocation of costs will normally also be dealt with in the party wall award.

 

 

7. Extra work on the party wall

 

The Party Wall Act (Section 4) also allows the Adjoining Owner, once he has been served with a party wall notice, to serve a "counter notice" to require the Building Owner to undertake additional works on the party wall, such as repairing or renewing chimney copings, breasts, jambs or flues, for his (the Adjoining Owner's) convenience (in oractice decisions on such works will normally be taken by the surveyors when they are negotiating the award, but it will be for the owner to serve the "counter notice"). The party wall award should describe the agreed works and also set out how the costs (including the surveyors' fees) are to be allocated between the two owners. Generally, anything that is of benefit only to the Adjoining Owner is charged to him.

   In the case of excavations, the Act (Section 6(3)) also provides for the Building Owner, either of his own volition or if required by the adjoining owner, to underpin or otherwise strengthen the foundations of the adjoining owner's building “so far as may be necessary”. This must be done at the Building Owner's expense. It is up to the surveyors to decide whether such work is necessary. If they do, the party wall award will describe the works that have been agreed.

 

 

8. “Laying open” the adjoining premises

 

   If the Building Owner intends, as part of his works, to “lay open” the adjoining premises, for instance by demolishing a party wall so as to leave the adjoining owner’s building temporarily exposed to the elements, under Section 7(3) of the Party Wall Act he is required to take measures at his own expense to protect the Adjoining Owner’s building (for instance by hoarding or some other temporary construction, and possibly some arrangement for heating the Adjoining Owner’s premises).

 

   He must also under Section 11 (6) pay a “a fair allowance in respect of disturbance and inconvenience” to the adjoining owner or occupier, and this should be provided for in the party wall award. It is rare for such laying open to be necessary, and there is no guidance as to what a fair allowance might be. If the Adjoining Owner can show that he will incur actual loss – e.g. that he needs to rent accommodation elsewhere because he cannot carry out some normal activity because of the laying open, it might be appropriate to base any allowance on the actual rental costs. Otherwise an amount might be awarded based on a notional rental value for the part of the building laid open.

 

 

9. Security for funding repairs

 

  Section 12(1) of the Act provides that an Adjoining Owner may require the Building Owner to give security (e.g. in the form of funds in escrow) so as to provide protection if for example the Building Owner leaves the work unfinished, and the Adjoining Owner has to pay for expensive reconstruction work.   Section 12(1) refers to work by the building owner “in the exercise of the rights conferred by this Act”. Until recently, this was thought to exclude excavations on the Building Owner’s own property, even if they are covered by Section 6 of the Party Wall Act. The case of Kaye v. Lawrence (2010) has however established that an Adjoining Owner can request security against any works under the Party Wall Act, including adjacent excavations.

 

   Until recently the provision on giving security was little used. But following the Kaye v. Lawrence case, and with the increasing popularity of basement extensions in residential areas carrying the very real risk of damage to neighbouring properties, they have become increasingly common in party wall awards dealing with such extensions. The Act is not very clear on what exactly the security can cover, and some surveyors have taken the view that it applies only to dealing with the consequences of the work on the site being left unfinished or badly done – e.g. leaving the adjoining building no longer weatherproof. However, many surveyors are comfortable with providing for the funds to be released only after any damage to the neighbouring property (as established by the surveyors) has been put right.

 

   Security will not be appropriate in all cases. Such a request must be reasonable – i.e. there must be a good reason for supposing that such security may be needed, as there normally is in the case of underground excavations which carry a relatively high risk of damage to the adjoining buildings. Such security is likely to be particularly important when basement excavations are carried out by developers or companies rather than individuals, especially if they are based overseas.

 

   There are various forms of security that can be considered. The most usual would be for the Building Owner to pay a sum into an independent bank account held jointly by the party wall surveyors or a firm of solicitors, so that the Adjoining Owner can be compensated for damage out of these funds should the Building Owner or his contractor be made bankrupt or be otherwise unable or unwilling to pay any sums awarded. It is usual for the party wall award to specify that the Building Owner will be responsible for any charges or fees arising from the administration of the account, and will also be entitled to any interest accruing on the funds lodged in the account.

 

   The sum would need to be agreed between the surveyors, and will depend on the individual situation, but should represent a realistic estimate of the possible cost of remedial works. For potentially damaging works such as basement excavations under terraced houses, it would be reasonable to consider a worst case scenario of the work being abandoned and the neighbour having to enter the site to carry out works to protect against damage, or a major subsidence of the party wall. It should also take account of the state of the Adjoining Owner’s property. For instance, if the owner has recently had his house expensively redecorated to a very high standard, a greater provision would be appropriate than where the Adjoining Owner’s property has old and shabby decoration that is due for renewal anyway. Over the past few years it has become quite common for high value security to be provided in central London, in some cases in sums running to the hundreds of thousands of pounds.

 

   When a firm of solicitors holds funds, the funds are normally releasable on demand by the person providing the security. So if the surveyors decide that the funds should be held by solicitors, it is advisable to ensure that there is a binding agreement that the funds cannot be released until at least two of the three surveyors agree.

 

   Some damage may not become apparent until after completion of the works. It could be appropriate, therefore, to keep a portion of the funds in escrow for six months or a year after completion of the works if such subsequent damage (e.g. widening of cracks) is thought at all likely – although not all surveyors will agree to this. It would also be appropriate in such cases to provide for monitoring to continue during that period.

 

   Where the work is being undertaken by a subsidiary company, if the parent company is a large and well-resourced firm, an alternative to a bank deposit or escrow account might be to require a parent company guarantee.

 

   It should be noted that, where an Adjoining Owner requires the Building Owner to carry out extra works for his convenience, the Building Owner can ask for similar security under Section 12(2) of the Act.

 

 

10. Insurance

 

   Especially (but not only) when no security has been arranged, it is usual in party wall awards to require the building owner to have appropriate insurance in place. This should be an All Risks policy and should cover not just the main contractor but any works undertaken by sub-contractors (as in complicated basement developments some of the work is almost invariably sub-contracted out).  It may be worth specifying that the policy should be a “JCT 6.5.1 or 21.2.1” policy under the JCT Standard Building Contract for minor works, which avoids the need to prove negligence by the contractor, although there is no right to insist on this.

 

   In cases of potentially damaging works, it may also be advisable to provide for the Adjoining Owner to be able to claim directly on the insurance policy taken out by the Building Owner or his contractor to cover the works, so as to avoid having to rely on the Building Owner having to make a claim before the Adjoining Owner can be paid.   There has been at least one case where a Building Owner based outside UK jurisdiction simply refused to make a claim under his policy. This again can form part of the party wall award.

 

 

11. Execution of the works: general clauses

 

   It is usual for the party wall award to include a number of general clauses specifying that the Building Owner must

 

  • execute the works so as to avoid any unnecessary inconvenience to the adjoining owner or occupier. The words “unnecessary inconvenience” reflect Section 7(1) of the Act which says that “A building owner shall not exercise any right conferred on him under this Act in such a manner or at such a time as to cause unnecessary inconvenience to any adjoining owner or occupier.”

 

  • pay all the costs of the works, including any statutory fees; observe the Building Regulations and any other statutory requirements;

 

  • undertake all work in a in a proper and workmanlike manner in sound and suitable materials in accordance with the terms of the award, to the reasonable satisfaction of the appointed surveyors.

 

  • take all reasonable precautions and provide all necessary support to uphold and retain the adjoining owner’s land and buildings.  

 

  • hold the adjoining owner free from liability for any injury or loss of life to any person or damage caused by, or in consequence of the execution of the works.

 

   Particularly in the case of subterranean development, some more specific clauses may be judged appropriate, for instance requiring the Building Owner to

 

  • arrange monitoring of the effect of movement as a result of the works on the adjoining owner’s building (for instance monitoring any cracks in the neighbouring property) both before the works begin (to establish a baseline) and during the course of the works and for a period of say six months following completion of the works, The results of the monitoring should be made regularly available to the Adjoining Owner’s surveyor;

 

  • make good the faces of any walls of the adjoining building which are exposed by pulling down and not covered by rebuilding;

 

  • fill any voids occurring under foundations with concrete;

 

  • [Where there is any risk to drains] arrange for a CCTV survey to be prepared of the adjoining owner’s drains before the work begins and then again on completion of the works and make the report available to us the said surveyors. In some cases it may also be appropriate to require all old drains, wells and cesspools to be traced and emptied;

 

  • [Where works are in a flood-risk area, or near the water table, or near local underground springs or streams] take appropriate measures to protect the adjoining owner’s property from water damage during the construction.

 

   Although it is impossible to guarantee that any works will cause only minimal damage, as so many unexpected factors can arise during the construction phase, most surveyors would expect that the project should be designed to avoid other than “very slight” or “level 1” damage (1mm) on a recognised scale of structural damage. For particularly large and risky subterranean developments, however, there is always a risk that events during construction will cause greater damage. It may be sensible, therefore, to insert into the party wall award a requirement for monitoring and for trigger points which would require the works to be reassessed if damage exceeded a certain level, say +/-5mm.

 

 

12. Access

 

   The Act (Section 8) provides for certain rights of entry for both parties, and this is normally dealt with in the party wall award.

 

   During the works, the Building Owner or his workmen and contractors can during normal working hours enter the adjoining owner’s land insofar as this is necessary for the execution of the works or for removing “furniture or fittings” – this could be anything from removing flowerpots out of the way of the work to erecting or dismantling protective screens. It is generally accepted that the Building Owner can erect scaffolding on the neighbour’s land if it is necessary, but must remove it as soon as it is no longer needed.. Before entering the Adjoining Owner’s property, notice must be given. Details of access should be determined by the appointed surveyors when agreeing an award, and should include such restrictions and safeguards as are necessary to protect the adjoining owner. Note that the right of access only applies to works under the Act; if the neighbour needs access to the adjoining owner’s premises for works on parts of his property not covered by the party wall award, he will need to proceed under the Access to Neighbouring Land Act 1992. This allows a person to apply to the county court for an access order allowing him to enter his neighbour's land to carry out repairs – although normally the necessary access is negotiated in a friendly fashion between the neighbours.

 

   The party wall surveyors appointed by the two owners (including the third surveyor) must also be given access to the adjoining owner’s premises to carry out their duties, again after giving appropriate notice (Section 8(5) and (6)), and this too should be dealt with in the award.

 

   Given that there have been complaints about contractors unnecessarily entering the Adjoining Owner’s premises  (e.g. taking a short cut across a garden), and about contractors blocking access to garages etc., it is sensible for the party wall award to spell out the requirement on the Building Owner to carry out the works, so far as is practicable, from his side of the boundary; and to give reasonable notice when access is required to the Adjoining Owner’s premises (the standard notice is 14 days except in emergencies). Note that a reasonable right of access cannot be refused under the Act.

 

   Other standard clauses should make clear that the Building Owner’s surveyor shall be permitted access to the Adjoining Owner’s property from time to time during the progress of the works at reasonable times and after giving reasonable notice in accordance with the Act (again 14 days is normal); and that the Adjoining Owner’s surveyor shall have access to the Building Owner’s premises at all reasonable times during the progress of the works.

 

 

13. Making good, costs and claims

 

   In accordance with the Act, the party wall award will include a clause requiring the Building owner to make good all structural and /or decorative damage to the Adjoining Owner’s property in materials to match the existing works and of at least the same standard. It is normal to specify that the manner and timing of any such making good shall be agreed by the Adjoining Owner. If the Adjoining Owner so requests, payment can be made in lieu of carrying out the work to remedy the damage. It is for the surveyors to agree on what damage has been caused by the works and also, if payment is to be made in lieu, to decide how much this should be.

 

   If the party wall has a window or vent or other opening in it, or for instance eaves, this may constitute an easement which cannot be interfered with under the Act, so the building owner is obliged to reinstate these features if the adjoining owner wishes to retain them. In such circumstances the party wall award may specifically require the Building Owner to reinstate all windows, vents and eaves in the party wall

 

    Normally, damage to the Adjoining Owner’s property is repaired only when the works are completed. There may be a case, however, for certain types of damage to be repaired immediately they occur. It may therefore be appropriate to agree that, if the works cause damage to doors or windows so that they no longer function effectively or if the works cause any part of the adjoining owner’s property to cease to be weather-proof, or if any part of the adjoining property is left in a dangerous condition, the building owner shall, if the adjoining owner so requests, effect the necessary repairs to restore full functionality, weatherproofing and/or and safety, including making good, as soon as is practicable after the damage becomes apparent.

 

 

14. Protecting and restoring the Adjoining Owner’s garden

 

   If the Building Owner needs to use the neighbour’s garden to get access to his works, he may cause quite a lot of damage to the garden. Even if he does not need access, the dust and noise from building works can kill plants and render the Adjoining Owner’s garden unusable for extended periods of time. So it is appropriate for the award to include provisions to protect the garden as far as possible, e.g. by moving flower-pots or even transplanting plants in advance of the works (although again there could be problems about including such a clause if other work is being done on the site and that is partly responsible for the dust etc). It would also be appropriate to provide that any plants, flower-pots or other garden furniture damaged as a result of the works should be replaced by like plants, shrubs and trees, or other plants or furniture, a of equivalent cost as agreed by the adjoining owner, at  the completion of the works . Provision should also be made if appropriate for lawns to be reinstated and topsoil replaced. But the surveyors would as always apply a test of reasonableness in deciding what should be required.

 

  

15. Compensation for loss or damage

 

   Section 7(2) of the Act which requires the Building Owner to compensate Adjoining Owners and occupiers “for any loss or damage which may result to any of them by reason of any work executed in pursuance of this Act.” To reflect this, it is standard practice for awards to include a clause to the effect that the Building Owner shall pay the Adjoining Owner’s costs for loss incurred as a result of the Building Owner’s works, the costs to be determined by the surveyors. This clause covers loss or damage other than the damage to the Adjoining Owner’s building, which is covered by the “making good” provisions.

 

   However, proving loss or damage is not straightforward. First it has to be proved that it is due to the works carried out under the Act and not those for instance on another part of the building site (although in practice, if the main work is the construction of a basement within the distances laid down by the Act, it can be argued that without the work falling within the Act the project would not have gone forward and therefore the loss can be attributed to it).

 

   The authorities are also divided on what constitutes loss. The RICS guidance suggests that the adjoining owner must have experienced an actual loss or damage rather than simply an inconvenience, and that the loss must also be capable of quantification (i.e in financial terms) by the surveyors. Bickford-Smith and Sydenham (Party Walls: Law and Practice), on the other hand, tentatively suggest that it might be possible to claim for non-tangible losses such as loss of a beautiful view when a wall is raised. The Pyramus and Thisbe Club (The Party Wall Act Explained) suggests that it is not possible to claim, for example, for loss of trade caused by the building site next door, but a claim could be made for the closure of a business (this view is presumably based on the 1907 case of Adams v. Borough of Marylebone where the judge said that loss of business was not good enough). Frame (Party Wall etc. Act 1996 – Misunderstandings and Guidance), on the other hand, considers that loss of business could be covered and Bickford-Smith and Sydenham consider the provision wide enough to cover “interference” with a business carried out next door, or loss of a chance to sell a property advantageously.

 

   Not surprisingly in the light of these differing views, different surveyors adopt different approaches. But the following are the sorts of cases where some surveyors may feel that it is appropriate to provide for compensation for loss, albeit only in extreme circumstances. In all cases, however, it would need to be proved that the problem arose because of the work being carried out under the Party Wall Act.

 

  • Compensation for Adjoining Owner or occupier normally working from home having to rent an office or suitable alternative accommodation elsewhere. However, this would normally be awarded only in extreme cases. Frame (Party Wall etc. Act 1996 – Misunderstandings and Guidance) quotes a case where the adjoining owner was a writer who needed a very quiet environment in which to work. The surveyors awarded compensation in recognition of the fact that he had to move to alternative accommodation during the noisy part of the works. A reasonable Building Owner should accept that this is necessary, at least for certain types of work, and might be prepared to reach a voluntary agreement with the Adjoining Owner, as the extra expense would be small compared to the costs of the work.
  • Compensation for loss of earnings. Eileen Kelliher v. Ash Estates Ltd and Normand Developments Ltd [2013] established that in principle loss of earnings can be claimed (the claimant’s case was that unnecessary delay and disturbance had delayed her recovery from convalescence after a serious illness; the judge did not consider her claim proved on the facts of the case, but agreed that loss of earnings could be claimed under s.7(2) of the Party Wall Act).

 

  • Compensation for alternative accommodation. This is not normally provided, but might be considered by some party wall surveyors in extreme circumstances, for instance in the case of particularly frail occupants of adjoining property such as invalids and the very elderly (we know of at least one case where the two years of noise associated with a basement development is believed to have hastened the death of the elderly lady living next door).

 

  • Compensation if the adjoining premises would normally have been rented out but where for instance the tenant has terminated his lease as a result of the work, and the property cannot be relet or can only be let at a lower than normal rent because of the works. This would be based on an assessment of the rental income foregone.  To prove what that income might be, it might be necessary to put the premises on the market at a normal rent and to show that there were no takers. If a tenant gave notice because of the noise, that also would be a good proof of the problem.

 

  • Compensation for loss of use of adjoining owner’s premises for some regular purpose for which the owner is paid (examples might be where the premises are rented out to film companies for use as a set, or the garden is regularly opened for charity). Again, proof might be required. If there was an actual advance booking that was cancelled because of the works, or it can be shown that the garden is regularly opened at a certain time of year, the situation should be reasonably simple. It would be more difficult if it cannot be proved that there definitely would have been a booking.

 

  • Compensation for losses associated with not being able to sell the property while the works are going on. There would need to be evidence that the owner was planning to sell, or that an event had arisen during the works making a sale imperative. The compensation could also only cover the costs of the sale being delayed – e.g. interest foregone on the sum for which the house would have sold – unless it can be proved that the Adjoining Owner had been deprived of an opportunity to sell the property at a higher price than he would otherwise have achieved. In the case of an unoccupied property, e.g. one that has been recently inherited by the Adjoining Owner, it might be possible to claim expenses associated with the delay of the sale – e.g. Council Tax and maintenance. Generally, however, there would be considerable difficulties in working out what compensation would be appropriate.

 

  • Compensation at a weekly rate for loss of use of the garden as a result of the works, for instance because of noise or dust. We know of at least one case where this has been awarded. The compensation could be restricted to those parts of the year when the owner could reasonably expect to be using the garden, e.g April to October. It could also be restricted to for instance the back garden, as most people do not use their front garden for sitting etc.

 

 

   This is difficult territory, however. It is often better, therefore, to appeal to the better nature of the Building Owner and to come to a separate arrangement over compensation for such losses – the cost of which would only be a tiny fraction of the cost of a major basement extension. Compensation for Adjoining Owner to live elsewhere if his house is rendered temporarily uninhabitable by works to repair damages caused by works under the Act is likely to be more easily negotiated and could be covered in an addendum award.

   One minor problem is the setting off of burglar alarms on adjoining premises by vibration from the works. The costs to the Adjoining Owner of calling out a key-holding company are something that could be claimed.

 

    It is normal for the award to make clear that the Building Owner shall bear the costs of the making of any justified claims by the Adjoining Owner under the party wall award. Note that there is court authority that surveyors cannot award costs of legal proceedings, or of draft proceedings for nuisance which have not actually been issued. However, the Adjoining Owner’s costs of taking legal advice in relation to the party wall aspects is capable of being validly included in an award.  

 

    Unfortunately one item for which no compensation is payable is the time that Adjoining Owners need to spend on administration dealing with the works next door. This can be enormous and can really interfere with someone’s working life.

 

 

Last updated 6.11.2014                                                                     

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