Why the building owner shouldn’t settle the adjoining owner’s party wall surveyor’s fees
In relations to surveyor’s fees, ‘The Law and Practice of Party Walls’ (Bickford-Smith et al 4th edition) states that, ‘no principles are prescribed upon which they should be awarded, but the usual form of award requires the building owner to pay the adjoining owner’s surveyor’s fees in connection with the award and the inspection of the works.’
Clause 9 of the RICS suggested draft award in their 7th guidance note ‘Party Wall Legislation and Procedure’ is very presumptive:
The building owner shall immediately on the service of this award pay the adjoining owner’s surveyor’s costs in the sum of £______________ plus VAT £______________ in connection with the obtaining and making of this award, and ___________________________ subsequent inspection(s) of the works. In the event of further disputes arising, further fees shall be payable to be determined by the surveyors.
The problem with the above clause, is that it is inherently wrong. The RICS template is actually making a decision that should be for surveyors to make: the settlement of costs.
The current consensus is that the building owner should simply settle the adjoining owner’s surveyor’s fee and this is rarely if at all questioned or challenged. This casual approach has the effect of ensuring unnecessary fees are encouraged whilst accountability is off the table.
Nicholas Isaac QC in his book The Law and Practice of party Walls (2nd edition) finds ‘the basic rule under the Act is that the building owner will pay both his own surveyor’s fees, and those of the adjoining owner’s surveyor.’ He extends that this is likely to follow on from section 11(11) of the Act ‘which provides that expenses of work… shall be defrayed by the building owner.’
So far, it would seem, I am on very shaky ground when it comes to trying to convince the reader that the building owner shouldn’t settle the adjoining owner’s surveyor’s fees. So here I go…
If a notice is served, and the adjoining owner is dissents and appoints a surveyor, the Act works in such a way that the ‘agreed surveyor’ route should be open to the building owner. The failure of the agreed surveyor appointment ahs been addressed in another article, but whilst Lord Lytton intended that the agreed surveyor route was to be commonly used, the reality is that there are considerably more party-appointed surveyors than the Act envisaged.
It is accepted that the building owner should pay if an agreed surveyor is appointed. The impartial agreed surveyor has the right to apportion his costs as he sees fit. An example of where he may decide that the adjoining owner pays some of his fee may be where remedial work is done under section 2(2)(b) i.e. repair of a chimney stack or party fence wall. For a loft or extension build, the agreed surveyor would be expected to require the building owner to settle his fees. That is well-established and on the face of it, fair enough.
What happens though, where an adjoining owner doesn’t allow the surveyor he has appointed to act as the agreed surveyor, even when the agreed surveyor is happy to accept the appointment? Judge Bailey rightly addressed this in the case of Amir-Siddique v Kowaliw, where he found that the adjoining owner’s insistence that the building owner pay for the two-party appointed surveyors was unreasonable. Judge Bailey ruled that the adjoining owner should settle the building owner’s surveyor’s fee as this was an unnecessary cost. It was accepted that the adjoining owner was entitled to have a party-appointed surveyor, but not on the basis that the building owner had to settle the two party-appointed surveyor’s fees. This case is very interesting, though doesn’t seem to have impacted much on attitudes towards fees.
The reason why the building owner should not settle the adjoining owner’s fees comes down to who is insisting on the three-surveyor tribunal. It is widely misunderstood that party-appointed surveyors are required to act impartially. This helps to justify the status quo, which is that the building owner should settle all fees, though this is untenable. It cannot be the case that a building owner is required to settle the fees of two surveyors, acting impartially, doing everything that the agreed surveyor does. Nor can it be the case that the building owner has to settle the adjoining owner’s surveyor’s fee because the adjoining owner forfeits the impartial agreed surveyor in favour of having representation by his own party-appointed surveyor.
It is fine that an adjoining owner may exercise the right to have his interests represented by his own surveyor, with a view to negotiating an agreement as part of a tribunal, though as this representation lacks impartiality and encourages negotiation, it seems inherently unfair that the building owner should be obliged to pay for it. The building owner should, without question, pay for a dispute to be resolved impartially by the agreed surveyor, but as soon as the impartiality is stripped away via the adjoining owner enforcing the three-surveyor tribunal, it cannot be determined that the unnecessary additional fees are ‘reasonable’.
Many people elect to appoint their own surveyor for a variety of reasons including, as Matthew Hearsum of Morrisons Solicitors LLP says, ‘parties wanting (mistakenly) someone “on their side”.’ The building owner cannot be obliged to pay for the adjoining owner’s mistaken views.
The idea that a building owner should settle the adjoining owner’s surveyor’s fees is unchallenged and taken for granted. This approach is damaging, and ensures that many fees are awarded unfairly – just think about that award template that presumes the building owner will pay regardless of circumstances.
The difference between an ‘agreed surveyor’ and a ‘party-appointed surveyor’ needs to be better understood, both in terms of their roles and how their fees should be settled. The status quo suits those who administer the Act, because if the adjoining owner had to settle their own surveyor’s fees, we could expect to see a massive uptake in impartial agreed surveyor appointments. There is little interest to change the status quo, as the industry would be hard hit, with significantly reduced appointments and associated fees.
The ‘agreed surveyor’ role has failed, because many people blindly appoint surveyors on the long-held but misguided belief that the building owner pays. Challenging this would be a game-changer, both in terms of how the Act is administered, and in bringing fees down for the building owner – who has been unfairly subjected to disproportionate and unnecessary fees for years.