In today’s Property Surveying blog post topic we are going to be taking a closer look at the procedures that surround Section 12 of the Party Wall etc. Act 1996.
Section 12 of the Party Wall etc. Act will come into play when a building owner has served a Party Wall Notice upon the adjoining owner, the adjoining owner has dissented to that Party Wall Notice, with the appointment of an agreed party wall surveyor, or two party wall surveyors being applicable.
To start with, lets take a look at what Section 12 of the Party Wall etc. Act 1996 actually states;
(1) An adjoining owner may serve a notice requiring the building owner before he begins any work in the exercise of the rights conferred by this Act to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.
(2) Where—
(a) in the exercise of the rights conferred by this Act an adjoining owner requires the building owner to carry out any work the expenses of which are to be defrayed in whole or in part by the adjoining owner; or
(b) an adjoining owner serves a notice on the building owner under subsection (1),the building owner may before beginning the work to which the requirement or notice relates serve a notice on the adjoining owner requiring him to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.
(3) If within the period of one month beginning with—
(a) the day on which a notice is served under subsection (2); or
(b) in the event of dispute, the date of the determination by the surveyor or surveyors,the adjoining owner does not comply with the notice or the determination, the requirement or notice by him to which the building owner’s notice under that subsection relates shall cease to have effect.
In layman’s terms, the Party Wall etc. Act 1996 allows for an adjoining owner to make a request for security from the building owner prior to the construction works that fall within the realm of the Party Wall etc. Act 1996 taking place.
In practice, the security will often be a sum of money, or an insurance policy, whereby in the event of any issue, unfinished works, abandoned works or damage, the adjoining owner will have the opportunity to call upon the security in order to safeguard their property as well as rectifying any damage it has suffered.
Security for expenses claims or requests are to be made from owner to owner. In practice, this means that the adjoining owner will need to formally request the sum of money from the building owner in advance of the Party Wall Award being agreed.
In usual circumstances, this request will often come via the adjoining owner’s party wall surveyor for the building owner, or the building owner’s party wall surveyor, to either accept or refuse this.
One of the most hotly debated topics under the Party Wall etc. Act and in particular under Section 12, is how the security can be calculated and quantified.
There are a number of different options to do this, and generally speaking these will often include;
Contractor Quotation
Contractor quotation will involve the building owner often seeking the input of their appointed contractor to confirm exactly how much the safeguarding works will cost in the hypothetical situation that they needed to be done.
The issue you have with this, is that in many cases the contractor will have some form of bias towards the building owner as ultimately they are their client.
Furthermore, the practice of using a contractor’s quote in this scenario doesn’t take into account the future unknown damage that could occur.
More and more often contractor quotes tend to be thwarted by the party wall surveyors as they are often inaccurate and unbefitting of the true costs surrounding safeguarding and making good.
Structural Engineer Input
Structural engineer input is much the same as contractor input, albeit you are going to get a much more considered and informed position on the overall cost of the safeguarding works.
Again, where an engineer’s costing falls flat, is that it doesn’t take into account the hypothetical and unknown damage that can occur to an adjoining owner’s property.
Albeit, it is worth noting that there are a handful of engineers out there who are willing to give some insight into that which can be of great assistance in setting a reasonable and fair level for the security quantum itself.
Construction Cost Indices
Construct cost indices tends to be one of the most commonly relied upon sources of quantifying a security for expenses request.
Generally speaking there are two main cost indices that party wall surveyors rely upon. The first being BCIS which is the RICS’ version of the costs indices.
This will allow the party wall surveyor, or party wall surveyors to work out the total cost of both the safeguarding, usually being the underpinning as well as any potential damage.
The issue you have with cost indices is sometimes they can be slightly overkill, and boost up the overall quantum.
It is also worth noting that there tends to be a reluctance of surveyors to use these cost indices as effectively they will need to have membership to the BCIS portal.
Certainly if the party wall surveyor doesn’t have access to this portal, then it is unlikely then they are an RICS surveyor in the first place which would significantly reduce the opportunity that they would be familiar with the cost indices, but also being able to use it satisfactorily.
The second cost indices is SPONDS, however in our experience here at Stokemont this tends to be reserved more for architects and is seldom used within a party wall surveying scenario and to quantify Section 12 requests.
Security for expenses is an incredibly common vessel used via the Party Wall etc. Act 1996, and has become ever more common place in those works which carry a high structural complexity such as basement excavations, underpinning, or significant structural change.
The key thing an adjoining owner needs to bear in mind is that the request must be reasonable, and that it cannot be used as a stalling or stopping mechanism to the building owner’s works.
The key point the building owner will need to bear in mind is that an adjoining owner requesting a sum of money is simply them adding another layer of protection against the works.
Party wall surveying procedures while on the face of it are straightforward and simple, however can quickly become complicated and protracted.
If you would like to discuss your party wall surveying requirements with our team of qualified and experienced surveyors here at Stokemont, give us a call today and we will be more than happy to assist you.
