What is a Party Wall Agreement?
In the realm of construction and property development, a party wall agreement is an often crucial document between neighbouring owners. It regulates the rights and responsibilities of parties with regard to works done on, or adjacent to, party walls and other boundary structures. This example of a party wall agreement has been drafted to provide background information on the associated legal principles, guidance and procedures. One of the core purposes of a party wall agreement is to help build consensus and understanding between parties about the works that are to be carried out and the effect that those works will have. In many cases, the agreement will help to avoid or mitigate a wider conflict if parties can reach consensus about essential works, programme, costs and so on. With that in mind, the party wall agreement may include a comprehensive schedule of condition , helping to protect against damage and even fraud. Under The Party Wall Etc Act 1996 (the Act), there are three types of work covered by the party wall regime, each of which needs to have its own party wall agreement. These types of work are: Each property may require its own party wall agreement and the owners may need multiple agreements if there are works affecting more than one of these wall types. While it is possible to reach a party wall agreement informally, for example by a clearly drawn and signed plan showing the works to the party wall, bordering owners may well prefer to enter into a more comprehensive party wall agreement backed up by a schedule of condition. The cost of providing notices under the party wall regime has increased for 2023, as the Government has laid new secondary legislation to ratify these increases.
Main Features of a Normal Party Wall Agreement
A typical party wall agreement will usually comprise the following details:
a) Names and addresses of both or all three parties to the agreement;
b) Whether or not the party wall agreement applies to a single or two or three storey building;
c) The effective natural boundary of each property, adjoining the party wall;
d) A description of the extent of works proposed to be carried out, including the area in cubic feet to be removed from the party wall;
e) The proposed start and finish date of the works to be carried out;
f) Whenever any excavations in connection with the development are required or proposed in close proximity to an adjoining landowner’s property, particulars of such excavations should be specified in the schedules and the agreement;
g) A detailed schedule of each party’s obligations and responsibilities in connection with the proposed works and the party wall agreement. For example, are the party walls to be kept free from all builders’ materials and any debris or rubbish, or what will be the duties of the parties in relation to the damage to the neighbouring walls in the course of any demolition, alterations or building works;
h) What statutory notices if any are required to be given to Land and Property Services, the Utility Companies and the requisite neighbouring parties;
i) The right of entry on to an adjoining owner’s property during the carrying out of the works and all necessary scaffolding and other ancillary provisions to be put in place during the course of the works;
j) The party wall agreement should also include provisions for the building owner to indemnify each adjoining owner from any expenses and costs arising from any negligence, defaults or omissions by the building owner and their contractors, workmen and servants.
When is a Party Wall Agreement Necessary?
Establishing a party wall agreement is necessary when a party wall, fence or structure is built which divides the property of two or more neighbours. In order to obtain an agreement, a notice must be served by the builder to the adjoining owners stating their intention to commence work on the shared structure, or excavate or underpin the party wall structure.
There are four occasions when a notice may be served, including:
• when building a new wall on the boundary line
• when building a wall either on or off the boundary line
• when excavating near a neighbouring property (digging within three-to-six metres of the shared wall, fence or structure), and/or
• when carrying out excavation work (including lowering) beneath neighbouring properties.
If the property owner receiving notice fails to respond in writing within fourteen days or does not consent to the works, the work can still continue but the builder should apply to an independent surveyor to agree to the party wall schedule. If there is a dispute over the work required to be carried out, the independent surveyor may carry out an assessment of the work to be completed, which will be binding on the owners. A party wall award normally takes effect on the day the work begins, or on any later date agreed upon.
How to Write a Basic Party Wall Agreement
A Party Wall Agreement is used when an adjoining neighbour wishes to carry out works on their land or build across the boundary line. However, at times, an adjoining owner may refuse consent to the works. Alternatively, consent may be given but subject to terms and conditions. In such circumstances, a "Party Wall Surveyor", as authorised under The Party Wall Etc. Act 1996 (the "Act"), may need to be appointed to determine the rights and obligations of the parties in respect of the works, the allotment of any costs, the setting of tolerable noise and dust levels, and rectification of any damages caused as a result of the works carried out. This is the case irrespective of whether such adjoining owner has taken his objection away, or imposed conditions and restrictions, in his consent to the works. The appointed Party Wall Surveyor will then adopt an inclusive approach to ensure that the final drafted Party Wall Agreement is satisfactory to both parties.
When drafting a sample party wall agreement there are a number of things that must be done. The process begins with one of the owners serving a Party Wall Notice on the adjoining owner detailing the proposed works. The adjoining owner shall in turn consider this Notice and decide whether to consent or object to the works. If no response is given within 14 days, consent will be deemed to have been given. If consent is given by the adjoining owner but subject to terms and conditions, then the Party Wall Surveyor will have to intercede. If consent is rejected by the adjoining owner, then an Adjoining Party Wall Surveyor be appointed.
The actual drafting of a Party Wall Agreement will need to encompass the following: It is crucial that all aspects of the draft Party Wall Agreement are considered carefully especially in light of the statutory defence of Reasonableness set out in section 10 (2) of the Act. It is also imperative that clauses relating to the scope of works, working hours, noise and dust levels etc., are acknowledged within the Agreement to avoid any possibility of future disputes.
It is advisable that both owners obtain professional legal advice or guidance from a surveyor and that the drat Party Wall Agreement should be completely checked to avoid any potential legal implications.
Typical Conflicts and Solutions to a Party Wall Agreement
The nature of party wall agreements requires extensive communication and respect between neighbors. Unfortunately, these requirements are not always met and disputes can arise from a failure to adhere to the particulars of the agreement, a lack of knowledge of the requirements set forth in the agreement, or because of changes to either property that impact the party wall agreement.
Some common disputes between parties that may arise from a party wall include:
Depending on where the dispute exists in the process, alternatives to an actual court case exist to resolve a party wall dispute. Mediators are often qualified attorneys, but not necessarily certified as mediators. Mediators are selected by the parties to mediate their dispute and do not require court intervention to resolve a party wall dispute. Arbitration, on the other hand , may require court intervention and arbitration organizations may have authorship over your arbitration agreement. Arbitration is also commonly used to resolve disputes among parties with an existing party wall agreement.
In arbitration, parties will ultimately select a single arbitrator to resolve their dispute. Similar to the mediator, the arbitrator is likely a qualified attorney and may be certified by an organization that requires continuing education and training to maintain the certification. Arbitration is a more formal process that encourages the use of discovery and the presentation of evidence to the arbitrator. Parties are bound to the rules and procedures put forth by the organization overseeing the arbitration process. Typically, arbitration agreements include a waiver of the right to a jury trial and are dispositive in nature. Once the process is complete, the arbitrator renders a decision and can enforce it against one or both parties through a court action based on the arbitration agreement.
Significance of Legal Assistance in Party Wall Agreement
The process of changing the structures on a party wall, sharing the cost, must be managed and carried out in a lawful manner that is in accordance both with the statutory framework and any agreements that have been reached. The Party Wall Act 1996 provides that the building owner may carry out the works under the Act and without necessarily obtaining permission from the adjoining owner. However, the building owner should always seek legal advice before carrying out the work so as to avoid potential legal repercussions. The Act sets out various requirements, some of which are referred to in the standards agreement example here, and which must be complied with. Matters such as the timescales within which to respond to notices require action within strict time limits. Failure to act within strict time limits might lead to the adjoining owner losing their rights under the Act and/or the work being carried out lawfully, despite an adjoining owners objections. The shared cost provisions need to be clearly understood, especially when calculating the costs of the work carried out and the interest to be paid on late payment.
Tools for Creating a Party Wall Agreement
The resources available for those who need to draft a party wall agreement generally depend on the specific legal context or practice discipline for which they are required. The party wall lawyer may be proficient in preparing a basic party wall agreement. Depending on the jurisdiction, the party wall lawyer may also be well-versed (or able to become well-versed) in the technical intricacies of a particular party wall agreement issue, such as where the structure, or what is to be constructed, will fall on the property line.
The litigator may prefer that the party wall agreement be left only partially drafted so that the litigant can identify for the court what issues he or she finds objectionable, and have them decided by the judge. The drafter would typically provide more guidance in what is objectionable.
A more practical solution may be the local party wall and adjacent neighbour act (PWA) association. Such local PWA associations are developed to promote knowledge about the law and access to practitioners for parties needing it. These associations originated in the United Kingdom in relation to the Party Wall Act 1996 (PWA), which was pioneered in English law. Many North American jurisdictions have their own version of the PWA. The local PWA associations can organize workshops, seminars, and provide printed and online accessible materials. In many cases an archive of previously used agreements is maintained.
If the local PWA association does not have a member in the particular discipline whose expertise is needed, the local PWA association may also have a referral service, to refer the inquiry to a member in the new location . Many PWA countries have professional associations for the different PWA practice disciplines; should there not be a local PWA chapter, one of the professional associations may serve as a referral group. Some local PWA associations seem to have expanded their services to include online referral groups, where the PWA member indicates the services he or she can provide and the range of expertise at what he or she has experience in.
It is important to remember that PWA acts are statutes designed to prevent a neighbour from having unilateral control over neighbouring land. If a PWA requires a specific form of agreement, the judge is likely to decide that a different form of agreement is inadequate. When parties or proposed parties cannot agree on the form of the party wall agreement, the neighbour may wish to seek guidance from the local PWA association. Similarly, when there is a dispute about the technical feasibility of construction on the party wall agreement, the neighbour may wish to seek guidance from the local association.
Whether or not the agreement is likely to find itself before the court, the local PWA association may be a good source of assistance in answering the following questions:
In many cases the agreement may be reflected in two partially different versions, where the agreement is signed when both parties sign the same two different papers.
Another approach to the problem of power imbalance is to have a single point draftsman, such as an architect, draw up the agreement. The neighbourhood may share the cost and pay the draftsman or the draftsman may take a more commercial approach and offer to draft the party wall agreement at no charge, because the draftsman benefits from the neighbour’s business.