Why you shouldn't sign a party wall letter of appointment too early
A letter of appointment has many flaws, and this article does not seek to critique common templates. The aim is to look at the timing, rather than the content of these letters. It is our view that these letters are nearly always signed far too early, and this can have some negative consequences.
Members of the public are broadly unfamiliar with the party wall act and seek the guidance of specialist party wall surveyors to ensure matters are handled correctly. When presented with a letter of appointment, a building owner will often sign it, believing that this is standard procedure – which indeed it is. What people do not realise however, and party wall surveyors are included in this, is that a letter of appointment should only be signed if there is a dispute.
Building owners wishing to undertake work in pursuance of the party wall act should engage with a party wall surveyor at an early stage. Far too often, engagement happens too late, and this causes avoidable stress to all parties involved. Signing a letter of appointment nice and early can seem like a sensible and necessary thing to do, but there are some flaws that must not be ignored.
Firstly, you only need to sign a letter of appointment if there is a dispute. A dispute follows the serving of a party wall notice, where the neighbour either dissents to the work, or does not respond. The Party Wall Act is clear when a letter of appointment is required, it refers to it in sections 10(1)(a) and (b) of the Act, ‘where a dispute arises or is deemed to have arisen’ both parties shall appoint either one surveyor (the agreed surveyor) or their own surveyors. Section 10(4) requires the appointment to be in writing. The act is generally triggered by serving a notice (save for sections 3(3)(a) and (b), and there are no requirements made by the Act for surveyors to be appointed. Indeed, many building owners choose to serve their own notices.
How a neighbour / adjoining owner responds to a notice determines whether a surveyor needs to be appointed. If a neighbour consents, then there is simply no need to appoint a surveyor, and work can start. If a dispute does arise, (for example, a disagreement over damage), a surveyor can be appointed to adjudicate and serve an award. Alternatively, a neighbour can dissent and appoint a surveyor, in which case an award is served settling the ‘dispute’. A neighbour may be perfectly happy for the building owner to use the same surveyor as the one the neighbour has picked – this is known as the ‘agreed surveyor’ route. This saves the building owner having to pay his own surveyor’s fees. However, if the building owner has already appointed a surveyor, then more often than not, the agreed surveyor opportunity is lost, and either from lack of knowledge, or misrepresentation, the building owner has to pay two sets of surveyor’s fees. This is unacceptable.
Many surveyors claim that if their appointing owner asked them to, they would step aside to facilitate the agreed surveyor route. This may seem noble, but two points are made:
1. An appointment cannot be rescinded. The building owner is relying on his surveyor’s discretion to ‘deem himself incapable of acting’. If a surveyor wished to keep the appointment, he would be perfectly entitled to. If the building owner had not signed the letter of appointment too early, the whole scenario would be different. The building owner would be free to liaise with his neighbour and his neighbour’s surveyor, and would be free to appoint the neighbour’s surveyor to act as the ‘agreed surveyor’. This would not require the building owner’s surveyor’s permission, since he would not have been appointed.
2. The two-surveyor set-up is encouraged by poor notice templates and the early signing of a letter of appointment. The notice templates often state ‘in the event of a dispute I will appoint (insert name)’. This is steering parties away from the agreed surveyor, and furthermore, if the building owner has already signed a letter of appointment, it already looks to the neighbour that the agreed surveyor route is not workable. Party wall surveyors do tend to work in a way that generates and safeguards their fees. Two-surveyor appointments are ideal, as the industry can literally double its money. The main point is that parties involved turn a blind eye to the agreed surveyor route, and the signing of a letter of appointment nice and early makes the avoidance of the agreed surveyor route feel more natural. If surveyors only asked for their appointment letters when a dispute materialised, and if they gave honest advice, options would be kept open and the uptake of agreed surveyors would increase, saving the building owner money.
Another example of appointment letters being signed too early includes those sent out by the ambulance chasers. The ambulance chasers look for work by using mailing companies who send letters out to the neighbours of any person who has submitted a planning application. Neighbours are often surprised and concerned, and sign a letter of appointment straightaway ‘to protect their interests’. This is another example of a choice being made too early. A dispute cannot materialise until the building owner serves a notice (or starts work in pursuance of the Act). Any appointment prior to this is likely to be invalid. Regardless, by choosing an ambulance chaser, the neighbour has lost the opportunity to choose a surveyor of his choice, or indeed the opportunity to use the building owner’s surveyor. Panic and urgency drive people to signing these letters, and it ultimately generates money for an industry that does not wish to seriously police itself.
To summarise, it is recommended that one golden rule is followed: