How to invoke the act and can surveyors determine that it doesn't apply
The key points to take away are:
1. The Party Wall etc. Act 1996 is invoked by serving a notice.
2. If the Act is found not to apply, matters can be closed amicably.
3. If matters cannot be closed amicably, a party wall award is required to settle the dispute. It should record that the surveyors have determined that the Act does not apply, as they are entitled to do so under Section 10(12)(a). The surveyors are also entitled to settle a fee dispute under section 10(12)(c).
4. Surveyors must understand their responsibility. Too often, parties are let down by incorrect advice and uncertainty. Surveyors must understand their jurisdiction. If a notice is exploratory, a surveyor must advise his appointing owner of the possibility of a dispute arising which may be settled by way of an award. This award can determine whether the work is in pursuance of the Act, and how the costs of making the award should be settled.
The Act is invoked when a building owner, desirous of exercising rights under the Act, serves a notice upon an adjoining owner. It is dangerous for surveyors not to understand the limits of their jurisdiction, and it is equally dangerous if surveyors are not aware of their responsibilities.
When learning about the Party Wall Act, many surveyors will remember a catchy phrase which is ‘no notice, no Act’
Surveyors have questioned whether this is correct. For example, under section 3(3)(a) if an adjoining owner gives written consent, then the building owner is not required to serve a notice:
(3) Nothing in this section shall—
(a) prevent a building owner from exercising with the consent in writing of the adjoining owners and of the adjoining occupiers any right conferred on him by section 2.
Sections 3(3)(a) and (b) are the only two sections of the Act where the rule of ‘no notice no Act’ can be said not to apply. These are the exemption clauses. 3(3)(b) relates to dangerous structures, where serving a notice takes a backseat to the safety of people and property.
The question of ‘no notice no Act’ was specifically posed in Shah v Kyson. Surveyors waited with great interest, and it is completely understandable why many people feel that the Act should be able to be invoked through other means. Put simply, why should an adjoining owner be disadvantaged and locked out of the party wall act, just because the building owner has neglected or refused to serve a notice?
Also, section 10 which is often referred to as ‘the engine of the Act’ opens with:
Where a dispute arises or is deemed to have arisen between a building owner and an adjoining owner in respect of any matter connected with any work to which this Act relates.
Some surveyors have said that section 10 can stand alone, and that if there is a dispute relating to work to which the Act applies, there exists the jurisdiction for surveyors to settle it. There is the idea that a building owner is a ‘building owner’ within the meaning of the Act, not because a notice has been served, but because as per section 20 of the Act, a building owner is defined as ‘an owner of land who is desirous of exercising rights under this Act’. A notice is necessary for the building owner to signal this intention.
There have been examples whereby a building owner has not served a notice, and so surveyors have used a unique solution which is to invoke the act by serving a ten-day request under section 10(4):
(4) If either party to the dispute—
(a) refuses to appoint a surveyor under subsection (1)(b), or
(b) neglects to appoint a surveyor under subsection (1)(b) for a period of ten days beginning with the day on which the other party serves a request on him, the other party may make the appointment on his behalf.
This section has been used (or misused) to force the building owner to engage with the Act. As per section 10(4), the surveyors are creating an environment to force the building owner to comply with and acknowledge the party wall act. This tactic is designed to replace getting an injunction and is quite a good way of trying to invoke the party wall act to ensure the fair protection of all parties involved. Injunctions can be costly, and the onus is on the adjoining owner to initiate litigation. The adjoining owner is likely to lose money, as even if the injunction stops the work and forces the building owner to comply with the Act by serving a notice, the surveyors do not have jurisdiction to award fees in favour of the adjoining owner, see Blake v Reeves .
It is understandable that people would like for the Act to be invoked by jumping straight to section 10. This acts as a safety mechanism and may reduce the likelihood of litigation. However, there are concerns that if the Act could be invoked by sending a ten-day request, this could lead to unintended consequences, with unscrupulous surveyors appointing each other to settle disputes whilst awarding themselves high fees to do so.
The law may not always seem fair, and in the case of an adjoining owner having to take out an expensive injunction to ensure the building owner invokes the party wall act, it will certainly seem so. However, wanting the law to achieve something is not enough, there must be a sound legal basis to proceed by invoking the Act via a ten-day request under section 10(4).
Shah v Kyson, referred to earlier in this article, was appealed, and it was found that the mantra of ‘no notice, no Act’ was indeed correct.
What happens if a building owner serves a notice, and it later transpires that the notice was not required? This does happen from time to time and can cause a lot of friction between parties. If a notice is withdrawn quickly, or it is found that the work identified in the notice is not in pursuance of the Act, surveyors often take a pragmatic view. This can include simply waiving any fees for minimal time incurred or submitting an invoice for settlement by the building owner which everyone agrees is reasonable and fair. Sometime though, the adjoining owner’s surveyor may wish to charge more than what the building owner is willing to pay. Also, the adjoining owner may have visited site, reviewed drawings, and commented on a draft award. This is significant work.
Many surveyors will argue that if a notice is served and it is established the work was not in pursuance of the Act, that the surveyors will not have jurisdiction to award fees. This is because, they argue, that if the work is not in pursuance of the Act, it cannot have been a notice that was served under the Act - at the very least, not a valid notice.
This would seem to ignore section 10(12)(a) which makes it clear that a surveyor’s jurisdiction is to:
(a) the right to execute any work;
(b) the time and manner of executing any work; and
(c) any other matter arising out of or incidental to the dispute including the costs of making the award;
One of the first things a surveyor should be doing, is identifying whether the party wall act applies. It may not be obvious as to whether the Act applies, and to get a clear understanding, many building owners choose to engage with a party wall surveyor to serve a notice on their behalf as an agent. Contrary to popular belief, a surveyor is not appointed until there is a dispute under the Act. Even a surveyor may be unsure. Apart from requiring professional input to determine whether a notice is needed, a building owner may have to make some assumptions that might later be found to be incorrect. To exercise a right under section 6, for example, means the building owner is excavating to a level lower than the adjoining owner’s foundations. A notice may be served speculatively on the basis that it is safer to serve a notice, than not to. The building owner may wish to avoid the risk of being on the receiving end of an injunction, which could bring work to a stop and incur some hefty costs.
Surveyors have the right to determine that the Act does not apply. There is the argument that if this is the determination made, then the Act falls away, and in fact never applied in the first place. A notice that turns out to be incorrect, is no notice at all, they will argue. This can leave all parties involved in an awkward position. If this situation does arise, most parties will resolve matters amicably, including the settlement of any fees. However, where there is a dispute, it is vital that surveyors understand that the Act does still apply, and the surveyors can determine that the right to execute work in pursuance of the Act does not exist. This does not invalidate the initial notice which invoked the Act and gives surveyors the right to determine whether or not the Act applies as per section 10(12)(a). Section 10(12)(c) specifically refers to the determination of costs of making an award, so we know that we can have an award that determines:
10(12)(a) That the Party Wall etc. Act 1996 does not apply.
10(12)(c) That fees are to be settled in a way determined by the surveyors (generally, the building owner will be expected to settle fees).
On the face of it, the award should be straightforward and give closure to all involved in the abortive process. There can be complications, and this can be where an adjoining owner’s surveyor’s fees are contested. It is not uncommon for surveyors to waiver fees if the process is aborted prior to a site inspection. Where a site inspection is undertaken, an adjoining owner’s surveyor is less likely to simply write off the fee. There can be disagreements as to whether the adjoining owner’s surveyor’s fee is reasonable, and if matters cannot be resolved amicably, the two surveyors will need to serve an award determining the fees. If they cannot come to agreement, the matter will be referred to the third surveyor who will impartially settle the matter.