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Buying a property? Don’t forget about the Party Wall Act 1996

When buying a property, the Commercial Property Standard Enquiries (CPSE.1) (enquiries 1.3 and 2) provide standard form, specific enquiries about party walls. However, those enquiries only ask about breaches of the Party Wall etc. Act 1996 (PWA 1996) relating to party structures on the boundary of the site, and to provide copies of any notices, awards and agreements that might exist in connection with those party structures. The answers to those enquiries will not provide any illumination as to works yet to be carried out, or liabilities and expenses that are still to accrue following a sale of the land.

If the PWA 1996 may apply to works that have been or are in the process of being carried out (or are planned), what should a buyer be looking out for?

First, some basics

The rights granted under the PWA 1996 are personal to the original parties, that is to the original building owner (who exercised his rights under the PWA 1996 and served a party wall notice), and the original adjoining owner (who received the notice and had the option of consenting to the works, serving a counter notice or triggering a dispute).

When the PWA 1996 applies to works a buyer wants to carry out

A buyer with the benefit of a contract for sale of the building owner’s land can say that he is sufficiently “desirous of exercising rights under the Act” to be a building owner  (section 20, PWA 1996). As such he can serve a valid party wall notice on an adjoining owner before the transfer is completed. The subsequent transfer will not invalidate the notice.

In the absence of a contract for sale, the seller and buyer could serve a party wall notice in their joint names, so that the building owner’s rights following the notice would also benefit the buyer once he has purchased the building owner’s interest. If the parties do so, they should agree (in writing) how liabilities under the PWA 1996 will be carved up. That is, if the party wall procedure obliges the building owner to pay compensation to the adjoining owner or to pay the party wall surveyor’s fees, the buyer and seller should ensure that the buyer (who is carrying out the works for his own benefit) picks up the majority of that liability.

What if the adjoining owner has consented to the works?

If the works fall within section 2 of the PWA 1996 (repair of a party wall), the building owner can dispense with the statutory notice and award procedures if he obtains the adjoining owner’s written consent to the works (section 3(3), PWA 1996). If the adjoining owner has consented, this raises the question of whether a buyer of the building owner’s interest can rely on that consent and carry out the works without having to serve a fresh notice.

The PWA 1996 is silent on whether consent is transferrable, but the sensible answer must be to assume the consent is personal to the seller (the building owner) and to get the buyer to seek consent again on the same terms. Assuming that the neighbour (the adjoining owner) found the proposals unobjectionable once, he will probably consent again.

What happens if the property is already subject to PWA 1996 procedures?

There are two aspects to this: buying from the building owner and buying from the adjoining owner.

Buying from the building owner

Broadly speaking, liabilities can arise in two ways:

  • Under section 7 of the PWA 1996, to pay fees and pay compensation to the adjoining owner.
  • At common law, liability for damages and costs may arise out of works carried out contrary to the terms of an award or notice, or if works are carried out without complying with the PWA 1996.

A party wall surveyor may award compensation to the adjoining owner for unnecessary inconvenience and (it is generally accepted) all economic and physical damage arising out of works carried out in compliance with an award, whether that loss arises in the course of the works or once they have been completed.

Because PWA 1996 rights and liabilities are personal to the original parties, the party wall surveyor can only order the building owner named in the original PWA 1996 notice and award to pay compensation. Unless the buyer was a party to the original notice or had contracted to indemnify the outgoing building owner for compensation payments arising after the date of sale, he should be able to buy the property free from this liability.

If the building owner’s works have departed from the PWA 1996 procedure to the physical or economic detriment of the adjoining owner, the common law principles of nuisance, trespass and breach of statutory duty come into play. The key question is whether the incident giving rise to the loss was a one-off or an ongoing tort:

  • Liability for losses caused by a one-off incident (such as works that are in themselves a nuisance but are completed before the building owner sells his property) is likely to rest with the building owner who carried out the offending works.
  • Liability to rectify a trespass (such as building a wall on the adjoining owner’s land so as to create a permanent trespass) and pay damages to the adjoining owner may rest with whoever owns the building owner’s land from time to time.

If the party wall surveyor has not finalised his award, the buyer should obtain an indemnity from the seller for any trespass and ongoing liability that might subsequently arise out of works carried out unlawfully.

Buying from an adjoining owner

Anyone buying property from an adjoining owner where party wall works are ongoing should ensure that they agree to apportion the compensation awarded by the party wall surveyor (under section 7 of the PWA 1996) in his final award.

If, on buying the land of the adjoining owner, the buyer discovers that the building owner’s works breached the PWA 1996 and caused damage and loss, the new adjoining owner will be able to rely on common law remedies to recover its losses.

13 thoughts on “Buying a property? Don’t forget about the Party Wall Act 1996

  1. Tim,

    We are planning a loft extension. Our neighbour has instructed a rogue surveying company to act on their behalf (the internet is littered with bad stories about them).

    We’re hoping that we can find a way for the neighbour to replace this rogue firm with a legitimate firm. There are two avenues that I hope might help with this, but would appreciate your expert view.

    1. The original notice was served to the neighbour almost a year ago. Will this notice expire after 12 months, and therefore become void?

    2. The neighbour may be selling. Presumably the contract between the surveyor and our neighbour will cease at the point that the property changes hands (giving the opportunity for us to work with the new neighbour)?

    Many thanks
    George

  2. Although we cannot provide advice through the blog, you are correct that the original party wall notice will expire. Regardless of which notice is served under the PWA 1996, the relevant works must begin within 12 months. Also, if the property is sold, you will have to start the party wall process again with the new adjoining owner. That adjoining owner will be free to appoint its own surveyor or agree to a joint appointment of your surveyor.

  3. Is a party wall agreement in a town home automatically transferred to the new owner when the property is sold?
    Is a party wall agreement required to be disclosed at the time of sale, to the buyer?
    My adjoining neighbor informed me that they had a party wall agreement with the previous owner of my property, allowing specific parking space in our driveway.
    We have no association or board directing.
    No documentation or disclosure occurred during my purchase.
    I was informed a few years after buying, during random discussion with my adjoining neighbor.
    Thank You.

  4. While we cannot answer specific queries on the blog, we address some of your questions in the above piece (such as the non-transfer of the agreement and disclosure at the time of sale).

    It is worth remembering that the PWA 1996 is a piece of legislation that allows parties to carry out works to a party wall (or excavate within set distances from foundations), it is not designed to determine access or ownership rights. In that respect, I cannot see how an agreement entered into several years ago between previous owners can affect a parking space (other than when works were carried out in the vicinity of the parking space).

  5. hi just brought a ground floor flat, need to higher the lintels above doors and move a small wall, create a new door way. take out a stair case and make good ceiling floor.

    the stair case goes from mine and the last step is in the upstairs flat (used to be one house)

    the problem is the flat above me is under offer, do I wait until I find out who the new owners are, or do I submit a PWA now,

    I have to notify the management company, im part of it and the flat above which is under offer.

    whats the best and cheapest way forward please, I need a structural engineer for drawings and a surveyor for the act I think

    many thanks

    Dominic

    1. Hi Dominic

      As we say above, we can’t provide advice to specific queries on the blog. Many of the issues that arise in a situation such as the one you describe are detailed in Tim’s original post (even if it is written from the building owner’s perspective). If time is not an issue for you to carry out the works, you may feel that waiting until there is a new adjoining owner is the prudent thing to do.

      The RICS has a helpline that offers advice on party wall issues, which may be of assistance.

  6. Hi,

    We are just about to serve the Party Wall Notice to our adjoining neighbour with regards to our loft conversion. The loft conversion falls within permitted development and does not need planning permission but obviously all the work will be needed to conform to building regulations. Our adjoining neighbour’s house has just gone under offer. What happens if they do not consent and then try to string it out so no Award is agreed before they exchange contracts with their buyer, would we have to issue a Party Wall Notice to the new owners and are our curent neighbours the owner until just the exchange of contracts with their buyer or only on completion?

    Many thanks

    Spencer

  7. As we say above, we can’t provide advice to specific queries on the blog. However, you may find some of the information in Blog post, Introduction to party wall issues, helpful, particularly the sections near the end of the piece. As you will see, the Party Wall Act 1996 does provide a procedure in circumstances where the adjoining owner fails to respond to a party wall notice or is slow in responding. We also provide more information in Practice note, The Party Wall etc. Act 1996 (PWA 1996): Section 10 dispute resolution procedure.

  8. Hi,

    Our neighbours are planning to start building a rear ground floor extension. We know a party wall agreement is needed as their foundations will be less than 3m away from our property. Our first thought was to allow them to build their extension without having to get a party wall surveyor involved but now I’m concerned that not having a party wall agreement in place could be an issue when we sell our house. Can you please advise?

    Many thanks,

    Fabiana

  9. Michelle,

    I understand that you cannot give legal advice. However, I was wondering if you could give some practical tips? We are almost ready to exchange on a house purchase that has an extension. All building regs and planning consents were complied with but it appears the seller did not serve the party wall notices or cannot find copies of these docs (or the consent). Is this an insurmountable problem for me as a buyer? I am considering pulling out especially as I worry about how easy / difficult it may be if I wanted to sell the house in the future.

    Must be a common problem.

    Kind regards
    Glenn

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