Sara Burr, Chair of The Pyramus and Thisbe Club warns of the potential under the Party Wall etc Act 1996 of escalating fees should a dispute arise…
In the main, The Party Wall etc Act 1996, when followed correctly, is an effective means of allowing works to proceed and can protect both the owner and adjoining owner. However, as I explain here, both parties do need to be aware of any escalating costs whereby they are agreeing to pay any shortfall that is not awarded. Knowing what you may be liable for could mean the difference between a harmonious solution or one where the costs far outweigh the work being undertaken.
The general consensus is that the building owner that is doing the work should therefore pay the adjoining owners costs. This makes perfect sense and is all well and good until the adjoining owner sees the process as an exercise to stop the works rather than to facilitate them. Surveyors and engineers have the ability to rack up fees unreasonably if the process isn’t carefully controlled, and the adjoining owner should be aware that if fees aren’t agreed as part of the award process, they could become liable.
Adjoining owners should be very wary of signing Letters of Appointment whereby they are agreeing to pay any shortfall that is not awarded. This is a means of surveyors creating a contract between themselves and the adjoining owner where there would not, under normal circumstances, be one. The majority of party wall matters end in harmony but some don’t. Some surveyors try to use the issue of fees to delay matters unreasonably which then leads to building owners giving in to unreasonable fees to get the award that they need to be able to start, or some owners starting work because they have got fed up with the delays and cannot afford the time/cost implications.
So the implications of starting work without an award, the risk of injunction, not being able to sell the property and what happens if damage is caused are all areas that could see fees increasing. Some surveyors use all of these threats to obtain unreasonable fees and these situations are often the subject of third surveyor referrals. Again, third surveyor referrals add to the costs and the potential delay. Who wants to pay for a third surveyor award and who will the third surveyor award fees to in order to see what the award says. I expect there are many third surveyor awards still not been served.
Sara Burr BSc (hons) FRICS
Chair of London Committee and Vice-Chair of National Committee
The Pyramus and Thisbe Club
Tel: 028 4063 2082