I want to build off from the Party Wall, do I have to pay my neighbour enclosure costs?

Man pondering as he looing onto a brick Party wall — Staring at the Party Wall

I have just bought a house that is need of full refurbishment. My architect has drafted plans for me which include a creating a loft pod which will adjoin and enclose on a raised party (parapet) wall.

What are the considerations under the Party Wall Act and beyond appointed surveyor fees are there any additional cost consideration for me?'

To answer this question it would be prudent to break this down into two segments which broadly covers the applications of the Party Wall Act and the associated cost implications for what is known as enclosure costs.

Can I do this work under the Party Wall Act?

The short answer is Yes.

The Party Wall Act requires that the building owner serves a Party Wall Notice to the adjoining owner before carrying out works that might affect the party wall.

The Party Wall Notice will ideally include sufficient information and detail so that the adjoining owner can clearly understand the nature of the proposed work.

The Party Wall Notice must be served at least 2 months prior to commencement of works and is notifiable under section 3 of the Act for works notifiable under section 2 (2).

Unlike in the scenario a building owner wishing to construct of a new party wall (typically for an extension) under section 1(2) where an adjoining owner can simply refuse and require all new construction is contained the building owners land, works notifiable under section 2(2) for works being undertaken to an existing party wall cannot be refused.

What are the implications if any for costs associated with the proposed enclosure?

Piggy Bank sitting on Calculater — Party Wall Surveyor working out enclosure costs

Enclosure costs are an important aspect of the Party Wall Act and refer to the expenses incurred when one property owner builds a wall that another property owner later encloses upon for their own use.

Broadly speaking, this normally equates to a 50% costs basis for building the wall which might typically include its supporting foundation and associated preliminary costs.

Whilst there is a cost implication the benefit in reality is that a cost saving is made of circa 50% based on having the work undertaken and equally the more intrusive work will not be required negating a level of inherent disruption.

No Payment Required!

It's not uncommon for Party Wall Surveyors on behalf of their appointing owners to persuade an adjoining owner to consent to having a wall built as a party wall on the understanding that if consent if given that they might forfeit future enclosure cost implications.

WHY you ask?

The building owner has maximised their space which commands £m2 premium they otherwise would not be entitled too without consent of the adjoining owner and equally the adjoining owner in the first place has conceded their own space no doubt at £m2 and the subject to nuisance associated with the work being undertaken on their land.

It seems a fair trade and is often the case in practise where both neighbours are in situ for both sets of works.

Note: Ideally forfiet of enclosure costs will be prescribed in the body of the original Award (when the party wall was agreed and built) save for any future ambiguity.

Case Law and Party Wall Surveyor Interpretations

This is an interesting topic for party wall practitioners and there are two prominent cases with quite different outlooks on the matter.

Mason v Fulham Corporation

In the case of Mason v Fulham Corporation , Mason constructed a wall in 1895 and entered into an agreement with Fulham Corporation that they will be required to compensate for the benefit obtained from use the wall should they choose to enclose on in the future.

Mason sold the property and when Fulham Corporation some years later decided to enclose on the wall an Award for costs was made in favour the existing owner, Mason argued that he built the wall and was the party entitled to payment.

It was established that the conveyance of the property transferred all such rights to (the wall) onto the new owner and Masons was not successful in his claim.

This ruling supports the principle that many party wall practitioners refer when trying to establish and justify enclosure costs.

However you must never forget that each case will fall on its on its own (legal) merit and the chance of a case mirroring said scenario might not be as clear cut as one would hope.

Consider...

a) one of the owners (Fulham Corp) were still in situ, and

b) still in obligation under the former agreement

c) if the agreement would have prescribed Mason specifically being beneficiary (rather than building/adjoining owner) than this might have been a different outcome.

d) clear benefit was realised in use of wall.

Food for thought for practitioners.

Re Stone vs. Hastie

In the case of Re Stone vs. Hastie, which is in complete contrast to percieved outcome in Mason vs Fulham Corporation, the court determined that the existing owner was not liable for enclosure costs if they were not the original party who constructed the wall.

This case sets a conrtasting precedent that liability for enclosure costs does not necessarily transfer to the new owner of the property where the wall was originally built.

The ruling highlights that the right to claim enclosure costs might be personal to the original builder of the wall and does not necessarily extend to subsequent owners.

This interpretation affects how enclosure costs are handled under the Party Wall Act 1996.

Conclusion on Current Practice

Although the Party Wall Act 1996 establishes procedures for handling party wall matters, including the determination of enclosure costs, the principles from Re Stone vs. Hastie would still influence interpretations of liability. This case suggests that unless there is a specific agreement or contractual obligation, new owners may not be liable for enclosure costs incurred by previous owners.