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What is an Enclosure Cost?

Apr 16, 2022

In today’s property blog post, here at Stokemont, we are going to be looking at party wall surveying procedures

In order to help our clients and appointing owners fully understand party wall procedures, we are going to be taking a look at enclosure costs, or making use payments as they are also commonly referred to.

Making use, or enclosure, applies when a building owner is undertaking construction works to their property, and as part of those works will be building off the adjoining owner’s wall. 

Enclosure costs are formally dealt with under Section 11(11) of the Party Wall etc. Act 1996, as follows:

Where use is subsequently made by the adjoining owner of work carried out solely at the expense of the building owner the adjoining owner shall pay a due proportion of the expenses incurred by the building owner in carrying out that work; and for this purpose he shall be taken to have incurred expenses calculated by reference to what the cost of the work would be if it were carried out at the time when that subsequent use is made.

Section 11(11) of the Party Wall etc. Act 1996 is in place to ensure that if a building owner does use an adjoining owner’s wall for the purpose of their own construction, they reimburse the adjoining owner for the reasonable costs that they would have incurred at the time of undertaking the works and building the wall.

The right to receive the enclosure costs, or making use payment, exists irrespective of whether it is the actual adjoining owner who built the wall in question.

This means, that even if the adjoining owner is a new owner, or has recently purchased the property and never actually undertook the works, they are still applicable to receive the enclosure cost/making use payment. 

The logic behind this is that while the existing adjoining owner may have not undertaken these works themselves, in purchasing the property, they have paid a price taking into account the works that have been done. 

They therefore have the legal right to receive the benefit of enclosure when it is undertaken, as it is effectively their wall that the building owner is building off or enclosing upon.

Section 11(11) of the Party Wall etc. Act 1996 does tend to be one of the sections and mechanisms of the Act that very few owners are aware of.  In our experience here at Stokemont, we tend to find that owners, whether they are building owner or adjoining owner, only tend to find out about this when their party wall surveyor points it out to them. 

Nonetheless, it is a legal requirement as set out by the Party Wall etc. Act 1996 and therefore the only way enclosure/making use payments are ever waived or not dealt with, is if the adjoining is specifically willing to agree to waiving the cost, or alternatively if there is some form of document, contract, or deed in place that would remove the building owner’s requirement to pay the adjoining owner enclosure cost/making good costs.

Enclosure costs are in place to ensure that the costs of construction that the adjoining owner would have once incurred are reimbursed to them.

The costs themselves are calculated as follows:

Contractor Quotation

Contractor quotation is a very common procedure for the party wall surveyors to quantify the amount of enclosure that is due from the building owner to the adjoining owner.

However, it should be noted that contractor quotation can in some cases be a touch inaccurate, as it does rely upon the contractor who is actually quoting to take into account the work that actually needs doing.

It is also difficult to expect the building owner’s contractor to give an impartial figure for the enclosure costs, as effectively they are going to be naturally working in the interest of their client, the building owner.

For this reason, contractor quotation is rarely used as it does have the potential inaccuracy in place.

Construction Cost Indices

Construct cost indices are by far and large a much more common form of quantifying a building owner’s making use payment. 

Construction indices will ensure that the party wall surveyor is able to get a market take on what the cost of the construction of the wall is, thereby arriving at a reasonable and fair figure free from any partiality or bias. 

Here at Stokemont, as we are members of the RICS (Royal Institute of Chartered Surveyors) we use BCIS costs indices. 

The BCIS is the RICS’s version of a cost indices, and over the years when comparing to other cost indices we have found it to be the most accurate and befitting for quantifying construction works. 

If you are planning on undertaking construction works to your property, and belief that the Party Wall etc. Act may be applicable.  Alternatively, if your neighbour is planning on undertaking works to their property and you believe that the party wall procedures may be applicable and, even more, there may a potential enclosure. 

Give our team of qualified and experience party wall surveyors a call today and we will be more than happy to assist and advise you.

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