The Party Wall etc. Act 1996 is a cost effective means of avoiding and resolving disputes, between neighbouring owners. The scope for the Act to apply is limited to set work and operations set out in detail within it. The Act is normally enabled by an owner who wishes to undertake work notifying their neighbour(s) of that work. If the adjoining owner agrees to the work the building owner may, after statutory timescales have expired, progress with the work. If a neighbour dissents a surveyor, or surveyors, is appointed to resolve the dispute between the owners by setting out the type of work to be undertaken, its manner of construction, methodology of implementation and timing of the work.
There have been occasions where an owner undertaking work has not served notice and progressed with work that came within the scope of the Act. Where this has occurred and the adjoining owner suffered damage it was not unusual for surveyors to be requested to resolve the dispute that has arisen if the owners could not do this directly between themselves. The alternative would be to commence legal proceedings.
In a recent case (Shah v Power and Kyson) the adjoining owner claimed to have suffered damage as a consequence of work undertaken by Mr Shah within his home. Mr Shah claimed that none of the work that had been undertaken at his property fell within the remit of the Party Wall etc. Act. The adjoining owner did not believe this to be the case and under Section 10 raised a dispute and appointed a surveyor to resolve this. Mr Shah refused to engage with the process and consequently the appointed surveyor for the adjoining owner, as set out in the Act, appointed a surveyor on behalf of Mr Shah. The two surveyors (Mr Power and Mr Kyson) prepared an award which provided for compensation to be paid to the adjoining owner. Mr Shah did not recognise the award and did not make payment to the adjoining owner or pay the appointed surveyors fees. Mr Power and Mr Kyson took enforcement action against Mr Shah to recover their fees. As the award had not been appealed by Mr Shah this would normally be a summary judgement to enforce payment of the costs. Mr Shah claimed that the award had no standing as there had been no notice served by him for the work and therefore there should not be any appointment of surveyors or award prepared under the Act.
The Act has a long history, although in various guises, and a lot of case law utilises the 1939 “Party Wall Act” which had the same principles although different wording to the “1996 Act”. A key difference between the two is the requirement in the ’39 Act for Notice to be served for the Act to apply, whereas the ’96 Act omitted this requirement, it being applicable “..in respect of any matter connected with any work to which this Act relates.” Based on this wording of the Act (being different to the ’39 Act) surveyors have been appointed and resolved disputes where initially no Notice has been served initially
There have been previous cases such as Crowley v Rushmoor Borough Council and Rodrigues v Skol, that gave the impression that resolution of a dispute to which the Act applies was not dependent on notice being issued. Up until Shah v Power and Kyson there had been no real challenge to the manner in which surveyors undertook resolution of the disputes where notice had not been issued. The recent judgment has changed this. It is of concern that rogue owners/developers in order to avoid work being scrutinised by independent surveyor(s), surveyors cost and other similar reasons, may try to ride “roughshod” over their neighbours by claiming that their work does not fall within the auspices of the Act and therefore there is no need for notice and avoid such “inconveniences” of having independent surveyors involved.
Under the Act an “innocent neighbour” would not be responsible for any costs for surveyors etc. If Notice has not been issued their only course of action will be to obtain legal advice or take direct action in court proceedings. The implications from this recent judgement are that previously when notice had not been issued the Act provided a relatively cost effective way for an adjoining owner to seek compensation and/or remedial work to be undertaken for damage suffered, it is now potentially far more expensive for an adjoining owner to seek recompense and because costs orders arising from judgements rarely reimburses a claimants costs in full they may have to meet some of the costs of taking action themselves. These costs can be disproportionate to the damage being sought to be rectified. I would hope that if an adjoining owner has to seek recompense via the court system because the building owner vexatiously tries to avoid the Act that the courts will take into account those actions and provide for reimbursement of the claimant’s (adjoining owner’s) costs on an indemnity basis (in full) as opposed to what is often the case of being 60/70% of the claimant’s costs at best.
In circumstances where an adjoining owner believes work is being undertaken and where they believe notice is required we are often asked whether it is possible to stop a building owner progressing work where such notice has not been served. Whilst party wall surveyors are required to advise on/clarify whether notice is likely to be required it is not always clear from publicly available information and letters to building owners advising of concerns can go unheeded. In some instances the only way to get a building owner to engage with the Act is having letters from solicitors or initiating proceedings for an injunction. To initiate an injunction puts the adjoining owner at risk, if unsuccessful, of meeting the building owner’s abortive costs, not only legal but the cost of stopping work on site. Costs for seeking an injunction, purely in legal costs, can be £5,000-£10,000 let alone the risk of having to meet the building owner’s legal costs and any costs for work ceasing on site if unsuccessful.
Unfortunately, not all work to which the Act applies is plainly evident without access to the property or having detail of the proposed work. Obtaining access to the neighbour’s property and requisite information is not possible without the Act being enabled. There have been a number of occasions where neighbours believe that work being undertaken comes within the Act but on review of information, I have concluded that this is not the case. All too often neighbours think of any work close to the party wall or surrounding the party wall are included within the work to which the Act should apply but this is not the case. On other occasions my advise is inconclusive as the manner in which work is to be undertaken is unclear.
A large number of issues around the applicability of the Act; and avoidance of the Act relate to small (value) matters as was the case with Shah (an end of terrace house in East London). Following the decision in “Shah” when considering what may now be legal proceedings the risk of costs exceeding the damage in question should be considered with the likelihood of being able to recover those costs. This was not such a risk previously with the Act providing a cost effective ADR (Alternative Dispute Resolution) process. There always needs to be a balance that prevents neighbours bringing spurious claims in the name of the Act but has the decision in Shah moved the pendulum more toward the unscrupulous building owner?
Care is required when looking to undertake work to a party wall or excavating within 3-6 metres of your neighbour’s property to see whether the Act applies. Whilst no-one deliberately sets out to cause damage to their neighbour’s property, if this does occur within the remit of the Party Wall Act there is a cost effective resolution to be put in place by surveyors as opposed to having solicitors appointed and issuing proceedings. A counterpoint to my comments so far is that greater care is required by the building owner to ensure they have complied with the and make good damage as potentially the neighbours remedy is to start out as if proceedings are to be issued which increases the costs that will be required to be paid in recompense in addition to the damage caused.
