Get your security!


Author:


Mr Lawrence wished to carry out excavations on his land at Sandbanks. The excavations did not adjoin a party wall but were within six metres of his boundary. The Party Wall etc. Act 1996 extends to cover certain excavations within three or six metres of a party boundary (depending on depth), and so Mr Lawrence served notice on his neighbour, Mr Kaye, pursuant to the Act.

As the name Sandbanks might suggest, the soil under both properties was sandy and therefore excavation of Mr Lawrence’s land posed a bigger than normal threat of causing damage to Mr Kaye’s property. Mr Kaye requested some form of security against possible damage to his property, under section 12(1) of the Act.

Section 12(1) is a little used provision which entitles an adjoining owner to require security against potential compensation claims before work pursuant to the Party Wall Act can be carried out. The section is so little used that the case of Lawrence v Kaye [2010] EWHC2678(TCC) was the first time the court had considered it. However, there was a commentary on the section in the “bible” on the Party Wall Act which stated that security was only applicable to works being carried out either to the party wall or on the adjoining owner’s property.

It was believed that no security was available where the work involved excavation away from the party wall. Based on this belief, Mr Lawrence refused to provide security and, when the dispute went to the third surveyor appointed under the Party Wall Act, the third surveyor also stated that he had no authority to order security for the work.

The matter then came to court on appeal from the third party surveyor’s award.

The Hon Mr Justice Ramsey in the Technology and Construction Court considered the meaning of section 12(1). The arguments were evenly balanced as to whether security only applied to work being carried out to the adjoining owner’s property or whether security could be required for any work authorised by the Party Wall Act, including excavations away from the party wall. But Ramsey J concluded that security was available for all work carried out pursuant to the Party Wall Act, because all work authorised by the Act, whether to the party wall or excavation within six metres, potentially makes the building owner liable to compensate the adjoining owner if the works cause damage. Ramsey J also confirmed that it was within the jurisdiction of the third surveyor hearing a dispute to be able to order that security be given where appropriate.

This case serves not only to show that security is available for a wider range of work under the Party Wall Act, but also as a reminder that security is a useful comfort to an adjoining owner in any event.

If you are an adjoining owner in receipt of a party wall award, you should consider whether it is appropriate to request security, in what form and for how much. If you are a building owner, you should be prepared for a request for security for work covered by the Party Wall Act. If there is a dispute over whether or not security should be given, its form or its amount, this can be resolved by the third surveyor appointed pursuant to the Act.

Frances Alderson, Partner, Fladgate LLP (falderson@fladgate.com)

View by author:


Would you like to hear more?