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Party Wall Questions #8

Thursday, 25th August 2011 | by: Peter Barry

Question

An Adjoining Owner is served with a notice just days before they are due to exchange contracts on the sale of their property.

Do they have a duty to make the incoming Owner aware of the notice and if they consent is the incoming Owner bound by that consent?

This is another question that was raised at a recent FPWS North London forum meeting which I helped to organise. I would welcome the views of other surveyors. If you are a surveyor involved in party wall matters and would like to attend future meetings please email me at justin.burns@peterbarry.co.uk and I’ll keep you updated.

Comment

Unfortunately there is no guidance in the Act on how procedures are affected by a change in ownership so we must rely upon case law and what the courts are likely to consider as fair and equitable.

The first point to make is that notices are served by and on owners rather than properties. We must therefore look at the question from the owners’ point of view.

The most relevant case law that I could find on the ‘duty to disclose’ part of the question is Carlish v Salt (1906). In that case the judge decided that a Party Structure Notice is a material fact which an owner has a duty to disclose. It should be noted that in that particular case there was a substantial potential liability for the incoming purchaser (50% of the repair costs) so it is possible that the court’s view would be different were that factor not present.

It could also be argued that a notice constitutes a latent defect in the title of an Adjoining Owner’s property as the Building Owner’s work could affect his right to quiet enjoyment.

Undoubtedly the safest course of action would be for an Adjoining Owner to disclose the existence of a notice.

The question of whether an incoming owner is bound by their predecessor’s consent is likely to hinge on whether or not the works have commenced.

Technically, the notice and any consent to that notice becomes invalid once ownership of the adjoining property changes so there will be a duty on the Building Owner to serve a new notice. That should not cause any problems if the works have not commenced. If the incoming owner has been made aware of the original notice they will hopefully have given the situation some thought and, if they choose not to consent, selected a surveyor.

The situation will be different if works have already commenced. I don’t believe it would be reasonable to expect a Building Owner that has followed the procedures set out in the Act to have their works delayed while surveyors are appointed and an Award agreed.  My advice to both Owners in that scenario would be for a new notice to be served and consented to. In that way the works would not be delayed but the proceedings would be brought within the scope of the Act and the Adjoining Owner would have a right to appoint a surveyor if a specific dispute arose later on (Onigbanjo v Pearson & Pearson (2008)).

Although not mentioned in the question an incoming Owner is also likely to be bound by the proceedings to date where their predecessor has dissented to a notice and appointed a surveyor. A Building Owner is only expected to pay the reasonable costs of making an Award and it would be hard to argue that that should extend to the fees of two surveyors.