Practical Law

In my previous two posts I provided an introduction to the Party Wall etc. Act 1996 (PWA 1996) and a brief outline on the agreement of a party wall award where a dispute arises.

In this third post I address some of the more complex aspects of the PWA 1996, including access rights, costs, expenses and special foundations.

Access

Development work often requires temporary access over a neighbour’s property. Such access can take a number of forms, including an oversailing crane or the erection of hoarding and scaffolding. Formal licence agreements for access are normally required because utilising another person’s land without obtaining their permission would constitute a common law trespass.

The PWA 1996 states that the building owner may enter onto an adjoining owner’s land “for the purpose of executing any work in pursuance of this Act”. This means that any notifiable works could allow a developer rights of entry regardless of their neighbour’s objections.

In fact, where access is unavailable, the building owner has the right (in the presence of a police officer) to break open any fences or doors to gain the authorised access. Further, any person who hinders or obstructs this access could be found guilty of a criminal offence and fined.

Making use of the PWA 1996’s access provisions requires the building owner to comply with the procedure in section 8. Entry onto the adjoining owner’s land or premises is only available if notice of the requirement is served at least 14 days in advance or, in case of an emergency, as much time as is reasonably practicable.

It is usually the appointed party wall surveyors who agree the extent of any access, taking into account whether the request for access will cause the adjoining owner unnecessary inconvenience (in which case they would consider whether there was any reasonable alternative way to carry out the work).

However, the PWA 1996 cannot grant access rights for works that are not notifiable. The distinction between what is and what is not notifiable can be small. For example, a scaffold erected to install a flashing (deemed notifiable) is likely to be permitted, but the same scaffolding remaining for any other purpose would require separate permission.

Where works are not notifiable under the PWA 1996, developers will find little to help them in the Access to Neighbouring Land Act 1992.  While it gives building owners certain rights to enter onto adjoining land, this is only for repairs and maintenance (not development). In addition, building owners need to go to court to obtain an access order. Hence it is rarely used.

For non-notifiable work, securing access over neighbouring land may well include negotiating financial consideration with the land owner. In cases where the access is essential to a developer’s scheme, an adjoining owner can effectively hold the developer to ransom, and increasingly larger sums are being demanded from commercially aware neighbours.

Cost and expenses

In simple terms, the building owner is most commonly responsible for the cost of the works. However, the PWA 1996 does set out situations where costs may be apportioned differently. For example:

• The costs may be part payable by the adjoining owner if they have served a counter notice requiring certain additional works to be undertaken.
• The costs for the repair of a party structure can also be shared between the building and adjoining owner, depending on the:
  • use which the owners make of the party structure; and
  • the responsibility for the defect or want of repair.

Similarly, the surveyor’s costs for preparing a party wall award are normally included as an obligation to be paid by the building owner. However, this principle is not expressly enshrined within the PWA 1996, and the actual wording allows costs to be defrayed between the owners as the surveyors determine. For example, where an adjoining owner acts in such a way as to increase the cost of preparing an award, it should not necessarily be reasonable for that cost to be attributed to the building owner. This may come as a surprise to an adjoining owner, who may erroneously believe that the developer will meet all the costs.

If the surveyors require any specialist advice in order to complete their award, the principle of defrayment of cost also applies. This could be the engagement of an engineer or perhaps, in very limited circumstances, legal advice.

The general principle of including any legal fees within a party wall award appears to be supported by the judgment in Onigbanjo v Pearson. However, the main test is whether the costs are “reasonable”. In the majority of cases, this is unlikely to be the case. The administration of the PWA 1996 is placed in the hands of surveyors rather than solicitors and there is an expectation that they are able to fulfil the duties required of them without seeking legal counsel.

Enclosure costs

There are some scenarios where one owner may wish to make use of part of a building that their neighbour previously constructed and paid for. A common example is where one owner has erected a party wall, and the adjoining owner subsequently encloses upon the wall to facilitate their own development.

In such cases, the PWA 1996 makes an allowance for a fair proportion of this cost to be reimbursed. The enclosure cost (as it is called) should be based on current construction rates regardless of when the original structure (being enclosed upon) was first built. It is generally derived by calculating how much the entire wall would cost to complete and then splitting the cost evenly between the two owners. This figure should also make provision for any preliminaries, access and design costs.

Security for expenses

The PWA 1996 allows an adjoining owner (prior to the commencement of works) to serve a notice on the building owner requiring them to provide such security as may be agreed between them.

Security should be limited to situations where an adjoining owner may be exposed to costs as a result of the building owner’s works. Its purpose is to provide a safety net against liability, not to cover the ordinary possibility of damage. For example, security could be requested where the work involves the demolition and rebuilding of a party wall. It will protect the adjoining owner from the cost of rebuilding the structure following demolition, should the building owner fail to do so.

Although the request for security must come from the adjoining owner, it is often prompted by their appointed surveyor who should ensure that the adjoining owner is aware of their rights, highlighting where security is applicable, and how to facilitate a request. In the event of any dispute the matter is passed to the surveyors for determination.

The PWA 1996 does not specify what form of security should be used but, in practice, it generally takes the form of a cash sum placed in an escrow account under the authority of the two surveyors. Other less common forms could include:

• Specialist insurance policies.
• Bonds or guarantees.
• Property charges.

It is worth noting that security for expenses can also be requested by the building owner from the adjoining owner where the cost of the works is being split between them.

Special foundations

Section 20 of the Act defines “special foundations” as:

“… foundations in which an assemblage of beams or rods is employed for the purpose of distributing any load…”

In layman’s terms, this means that any foundation containing reinforcement will fall within the definition. It should be noted that the presence of dowels between underpinning bays would not constitute a foundation being “special”.

The difficulty with special foundations is that the PWA 1996 states they cannot be placed on an adjoining owner’s land without their express consent in writing. If that consent is withheld, the building owner must find alternative and often less practical methods of construction (such as a mass concrete foundations). In fact, a more slender reinforced foundation will often be beneficial for both owners, providing more valuable floor space within the building owner’s development, and that of the adjoining owner too if they subsequently also decide to make use of the wall.

In cities like London, with space at a premium, and the growing popularity of basement developments, reinforced foundations are becoming ever more common. Adjoining owners are also increasingly threatening to withhold consent as a means to frustrate a building owner’s proposals or to seek certain concessions.

The PWA 1996’s definition of “special foundations” is now generally considered to be outdated. The law was developed at a time when large grillage foundations were used. Consisting of a complex arrangement of steels, such foundations could create difficulties if the adjoining owner later wished to develop their own land.

Recent case law has cast some doubt on whether or not special foundation consent is required in every scenario. In Chaturanchanda v Fairholme, it was held that the adjoining owner’s express consent was not required for a section of reinforced concrete beneath the adjoining owner’s land. However, this decision was based on the specific method of construction and is not considered by the majority of surveyors to circumvent the requirement of consent generally. (For a more comprehensive review of the subject and the case in particular, see Stephen Bickford-Smith’s excellent review.)

Just the beginning

In most situations, the PWA 1996 can be applied in a straightforward and simple manner, despite the many nuances and peculiarities that can arise. Engaging a competent party wall surveyor is not just vital to avoid any potential pitfalls but they will also ensure that the developer (and their neighbours) make the most of the rights available to them.