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Don’t forget about section 12 of the Party Wall Act

The existence of section 12 of the Party Wall etc. Act 1996 (PWA) is often overlooked and yet its importance should not be. It confers on both a building owner and an adjoining owner the right, in certain circumstances, to require the other to give security for the expenses that may be incurred when works are carried out on their land or to their property.

Kaye v Lawrence

In Kaye v Lawrence, the High Court considered the meaning of section 12. It arrived at a common sense interpretation, but first the facts.

Briefly, a dispute under section 10 of the PWA arose after the building owner served a party wall notice under section 6. The surveyor appointed to deal with the dispute refused to include in his party wall award a requirement that the building owner take out an insurance policy in respect of the potential damage to the adjoining owner’s property. He said the issue of security could only arise if the building owner was carrying out works on the adjoining owners property, which he wasn’t. The adjoining owner disagreed, and the matter ultimately ended up before the court.

Ramsey J in the TCC arrived at a common sense interpretation:

  • A building owner who intends to carry out works that the PWA relates to can be reasonably requested to give security to an adjoining owner in respect of inconvenience, losses and damage the adjoining owner may suffer.
  • That the works are to be carried out exclusively on the building owner’s land does not mean adjoining owners will not suffer loss and inconvenience.
  • That the works are carried out under section 6(1) and 6(2) (which govern excavation within 3 or 6 metres of the adjoining owners land) rather than under any other section of the PWA, should be no bar to seeking security for those losses.

A reminder about section 12

Kaye v Lawrence is a useful reminder of the very existence of section 12, which many adjoining owners and, to a lesser extent, building owners, fail to take advantage of.

In my experience, the tail-end of many disputes under the PWA relate to:

  • The amount of compensation that the party wall surveyor has awarded to the adjoining owner under section 7(2) in respect of unnecessary inconvenience, loss and damage.
  • The adjoining owner’s claim for damages arising out of the building owner’s failure to comply with the award or the PWA itself.

If the adjoining owner has exercised his rights under section 12 and security is already in place to cover part or all of the compensation and damages sought, his negotiating position when trying to reach a compromise will be much stronger than would otherwise have been the case. Once the section 10 dispute is resolved or the party wall surveyor has made his determination, it is simply a question of releasing part or all of the security to the party entitled to receive it (which will usually, but not always, be the adjoining owner).

This is a serious advantage for anyone trying to recover compensation that has been awarded to them under section 7. It can be contrasted with what happens if the paying party refuses to pay compensation, where it is very likely that the receiving party will have to bring a claim in the County Court for breach of statutory duty before being able to enforce the party wall surveyor’s award.

3 thoughts on “Don’t forget about section 12 of the Party Wall Act

  1. A really great informative article.
    My neighbour appointed a party wall surveyor, as did I under the Party Wall Act. Before the award he sold on the property and refused to pay the surveyors fees to date.
    These amounted to £5,300 of which I had paid £1,680 on account to my surveyor. After some pressure the owner agreed to pay half of the fees.
    My surveyor agreed to this, I did not, but refused to repay me any money, despite having assured me that my money would be safely returned when I paid initially.
    I am consequently £1,680 out of pocket, through no fault of my own. It all seems grossly unfair as I am an innocent bystander in this award/debacle and only want to safeguard my important listed property.
    My surveyor is pressing on with the new owners saying that we have a contract.
    I would rather appoint a new surveyor after his poor financial management/invoicing.
    I am not very happy and wish to make sure that I have additional security in case I am required to pay more money up front. How do I stand please. Could I have asked for a section 12 security initially?

  2. I’m afraid we cannot give advice on this blog, whether that is in relation to issues that arise under the PWA 1996 or to surveyors appointed by the parties to deal with a dispute arising under the Act.

  3. Hi,

    My neighbour the building owner has started building her extension has already laid the foundations and built the wall up to ground level, she has not issued the required notices under the TPA. She and her builder agreed to repair any damage done but have we have disagreed on how they will repair the damage to my property.

    I have asked they stop the works until the damage to my property is resolved and they have advised they will wait for the building contract manager to come back and make a decision regarding this.

    They started works few weeks after receiving planning permission and did not serve any notices, the building owner advised me 3 weeks before the works started she would be begin the works.

    What are my rights as an adjoining neighbour and is there an option of us both agreeing to appoint an third party wall surveyor to draw a agreement or award for the building owner to pay for existing damage and any future damage to my property?

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