An Overview of Section 12 of the PWA – Part 2

In the first half of this post I looked at how Section 12 of the Act, relating to Security for Expenses, is administered. I explained how such a request is made and the logistics of setting up a fund.

In this final part I will look at when it is appropriate to make a request and how the level of security should be determined.

The purpose of Section 12 is to protect an Adjoining Owner from being left exposed should their neighbour commence building works that he is unable to finish.

I don’t believe that Section 12 was ever supposed to cover potential damage to an Adjoining Owner’s property unless damage is clearly unavoidable. One such scenario may be where a party wall is constructed in such a way, or is so thin, that it would be impossible to cut a pocket in it without causing damaging the plaster and decorations on the Adjoining Owner’s side.

In all normal circumstances the surveyors should look at the potential for damage, do their best to put safeguards in place, but if damage still occurs deal with it as set out in section 11(8) of the Act.

In my experience there are 4 types of work covered by the Party Wall Act for which Security for Expenses in accordance with Section 12 could justifiably be requested.

Underpinning a Party Wall – covered by Section 2(2)(a) of the Act

By its nature underpinning is carried out in a sequence lasting several days, bays must be excavated, cast and then left to cure before starting the next phase. Should a Building Owner or their contractor run in to financial difficulties the likelyhood is that the Adjoining Owner will be left with a partially underpinned wall or even open excavations below the party wall.

The level of security should therefore be equal to the cost of completing the underpinning as a partially underpinned wall may give rise to further problems.

Demolishing and re-building a Party Wall or demolishing a Party Fence Wall and re-building it as a Party Wall – covered by Sections 2(2(e) & (l) of the Act

It’s very common these days for a Building Owner wanting to maximise the floor area of their side return extension to demolish an existing Party Fence Wall and re-build it as a Party Wall. Such work carries the risk that having completed the demolition works the Building Owner goes bankrupt and is unable to complete the work; leaving the Adjoining Owner exposed.

The security should equate to the cost of reinstating the original wall although in reality it way be used for completing the new wall if that is the cheaper option.

Exposing a Party Wall to the elements that was hitherto enclosed – covered by Section 2(2(n) of the Act

Consider a pair of semi-detached houses on a large plot. One of the Owners may decide that the detached life is for them and decide to demolish their existing house and build new. The problem is that the wall dividing the semis was never meant to be exposed and as a result could be prone to penetrating dampness. For that reason the Act only permits such work if the Building Owner commits to providing adequate weathering.

An unscrupulous Building Owner faced with rising costs on his new build may decide that the exposed party wall (complete with wallpaper) looks just fine and that his money would be much better spent on a swimming pool to go with his detached house. That wouldn’t be an option if a security fund had been set up.

The level of security should be equal to the cost of upgrading the weathering (e.g. rendering) to the newly exposed wall to that of the other external walls and implementing any strengthening measures that have been agreed.

Excavation on a Building Owner’s own land – covered by Section 6 of the Act

Until the recent case of Kaye v Lawrence it was believed by the majority of surveyors that Security for Expenses could not be requested by an Adjoining Owner where a Building Owner was excavating on his own land. That perception was turned on its head when the Adjoining Owner in that case went to court to argue the point and the judge agreed.

It is important to stress that although the judge gave the green light for Adjoining Owners to request security for Section 6 works it is still up to the appointed surveyors to decide whether they will actually get it.

Surveyors will consider questions such as the scope of the excavation, proximity to the Adjoining Owner’s structure, the ground conditions, how long temporary supports will be in place and the potential effect on the Adjoining Owner’s property if there was a prolonged pause in the works.

The level of security would depend upon the cost of permanently stabilising the ground, be that by completing the works as proposed or some other method.

In all cases it would be reasonable to make a small allowance for surveyors’ fees in the event that the Adjoining Owner must draw on the expenses.