The Party Wall etc. Act 1996 provides a clear framework for neighbours to undertake construction works while minimising disruption and resolving disputes fairly. As part of this framework, the Act allows surveyors to award compensation or expenses in certain circumstances.
In this blog, Icon Surveyors considers when it is appropriate under section 7 of the Party Wall Act 1996 for a surveyor to award compensation to a property owner, and also the application of compensation under section 11 of the Act.
When can a surveyor award compensation to a property owner under section 7 of the Party Wall Act?
Section 7 of the Act exists to ensure that a building owner exercising their rights does so without causing unnecessary inconvenience, damage or injury to the adjoining owner or occupier. While some disruption is inevitable during construction—such as noise or dust—compensation is only payable where the inconvenience is unnecessary or excessive.
For an adjoining owner to receive compensation under this section, the inconvenience must be serious and directly attributable to the works carried out under lawful authority through a Party Wall Notice or Award.
There are situations in which the level of inconvenience goes beyond what is considered reasonable. For example, if a building owner’s works creates excessive dust that renders an adjoining owner’s garden unusable—particularly where the garden is essential to a childcare business—this may constitute unnecessary inconvenience.
Similarly, if a neighbouring owner must temporarily vacate their property due to the works, compensation may be justified, although awards under this section tend to be modest and assessed on a case-by-case basis.
Additional Read:
The Party Wall Act Section 7 – Compensation
Expenses – The Party Wall Act Section 11
What Constitutes a Breach of the Award?
Section 7(2) also provides that an adjoining owner or occupier must be compensated for any loss or damage resulting from works carried out under the Act. This entitlement only applies to damage caused by works conducted lawfully within the scope of the Act. If damage results from a breach of the Award or unauthorised actions, it falls outside the surveyor’s jurisdiction and must instead be pursued through a common-law claim, usually in the County Court unless the damages exceed £350,000.
Compensation under section 7 aims to restore the affected party to the position they were in prior to the works. This may include financial losses that continue after the works are completed, such as reduced property value due to a narrowed footpath or loss of business, such as in the case of the childminder described earlier.
Application of Section 11 – Expenses and Damage
It is important to distinguish compensation under section 7 from the award of expenses under section 11 of the Act. Section 11 relates to the building owner’s obligation to make good or repair any damage caused by works undertaken through their rights under section 2.
Under section 11(8), the adjoining owner may receive money instead of repairs being carried out by the building owner. This award of “expenses” usually covers the cost of making good physical damage, loss of use, disturbance and other directly related inconveniences.
Typical examples include damage to driveways, drains, pipes, landscaping or boundary features resulting from the construction of foundations or a new wall. Rather than requiring the building owner to return contractors to repair the damage, it is standard practice for the Party Wall Award to specify that the adjoining owner receives funds equivalent to the cost of carrying out the repairs themselves.
Section 11(11) – Provision for Compensation
Section 11(11) introduces the possibility of compensation in the opposite direction—payable to the building owner—where an adjoining owner later makes use of works previously funded entirely by the building owner. These payments, known as “Enclosure Costs”, typically arise when a building owner has constructed a party wall as part of an extension, and at a later date the adjoining owner uses that wall as part of their own extension.
An example of what would trigger an enclosure cost would be when a building owner builds an extension with a party wall separating both of the owner’s properties and at a later date the adjoining owner uses the newly built party wall to build their own extension.
How is Compensation Calculated?
The Act specifies that the cost contribution should reflect the current cost of constructing the wall at the time the adjoining owner builds their extension, with the figure usually divided in half. This ensures fairness by accounting for inflation or changes in construction costs since the initial works.
Enclosure Costs are usually included in the Party Wall Award and are payable at the commencement of the new works. The entitlement to receive such compensation passes to successors in title, meaning it applies even if the original building owner has since sold the property.
Contact Us for a Free Consultation
Icon Surveyors are pleased to offer a free Party Wall consultation to any building or adjoining owners who may be affected by the issues discussed in this blog. Please don’t hesitate to contact us to find out more.
Notice: This blog is not an authoritative interpretation of the law and is intended only as general guidance.
