The Party Wall etc. Act 1996: Intention vs Reality
The intention of the Act, and the actions of those who administer it, are two very different things.
This article looks at the intention of the Act, and it is vital that this is understood, so that the surveyors who administer it can be held to account. Relying on surveyors who have forgotten the intention of the Act is dangerous. It leads to excessive fees, unnecessary fees, overzealous behaviour, dispute-generation and abuse of process.
In order to best consider the intention of The Party Wall Act, it is good to go back to 31st January 1996 when the Party Wall Bill was introduced to the House of Lords by the Earl of Lytton of stated:
‘The Bill is a safety net and not a fiery hoop’.
This does not sound familiar to many building owners, builders and developers who often feel frustrated by a costly and complicated process. The question is, who is making it complicated? Adjoining Owner surveyors have requested monitoring and security for expenses for loft builds. A surveyor has asked for a brick to be sent to his office for analysis prior to the commencement of work, so he could be sure that the party wall would be raised in material to match existing. For many, the Party Wall Act is very much a fiery hoop with spectacular acrobatic manoeuvres required to get that elusive award.
‘It rests upon a principle of voluntary agreement between parties wherever possible; it provides for notice to be given where works are proposed; there is an opportunity to respond and comment; it sets out to protect existing structures; there is a clear liability for damage and making good; there is provision for the resolution of disputes, other than by going to law; it sets out how costs of works and fees arising from them shall be dealt with; and clarifies the extent of rights over common structures…’
The principle of voluntary agreement has long deserted the party wall process. Party wall surveyors generally work on the basis that they will take care of matters, without consultation with their appointing owners. Too often, appointing owners are excluded from the process, which becomes costly and can end with third surveyor referrals, ex parte awards and litigation. The term ‘surveyor-driven disputes’ is being used with increasing frequency.
Section 10 of the Act concerns ‘resolution of disputes’ and the Earl of Lytton stated:
‘Clause 10 deals with the resolution of disputes. In this particular instance both parties can agree on the appointment of one surveyor. That is a step to be recommended most strongly…’
The appointment of one surveyor is certainly not recommended ‘most strongly’. An article titled ‘The failure of the agreed surveyor appointment’ (Mackie 2020) looks at why there is a low uptake of these one-surveyor appointments. It concludes that the uptake of agreed surveyor appointments needs to be increased, but that this is difficult, as those who administer the Act will lose out financially if agreed surveyor appointments become more common. The industry stands to lose considerable money, and there is little incentive for a surveyor to advise parties honestly, when that advice leads to the forfeiture of their fee.
The duty of party wall surveyors is quasi-arbitral. Once appointed they have a duty to act properly in the interests of both parties as statutory surveyors, which is a most important safeguard. Experience indicates that the great majority of disputed cases are dealt with by agreement between surveyors. ‘The building owner generally meets the cost of the adjoining owner's surveyor. But that is not a licence to charge excessive fees…’
Excessive fees are one of the biggest problems the industry faces. Excessive fees include unnecessary fees, from unnecessary final inspections, pointless comments on draft awards, to charging £300 plus vat an hour for travel and 11 pence per piece of paper to cover printing costs. Sometimes the only surprise is that the building owner hasn't been charged for the office cookies.
Party wall surveying is lucrative, and many surveyors do not miss a trick when it comes to charging the maximum fee they think they can get away with. The safety net of the third surveyor is supposed to prevent extremely high fees, however, that too costs, so more money goes into the pockets of the surveyors who are asked to adjudicate on whether one of their fellow peers is being greedy. Explaining that logic is challenging.
It is disheartening to see this huge gap, from what was intended to what the public actually experience. Some commentators will refer to the low appeal rate of awards, but it costs anywhere from £15,000 to £35,000 to win an appeal, and significantly more to lose (Nicholas Isaac QC). Safe in the knowledge that appeals are costly and rare, surveyors can behave in a way that makes a mockery of the Act. Professional bodies, surveyors and the public should work together to better understand the intention of the Act and how best to bring its intention to fruition. It needs to become that safety net it was intended to be.
Click on the link below to see details of Mr Lytton’s introduction of the party Wall Act to the House of Lords on 31st January 1996: