Right to Compensation - Part 2

In Part 1 of this blog (the previous blog), Icon Surveyors considered when it was appropriate under section 7 of The Party Wall etc. Act 1996, for a surveyor to award compensation to a property owner. In Part 2 of this blog, Icon Surveyors will consider the application of compensation under section 11 of the Act.

Previous Blog

Part 1- Right to Compensation Under the Party Wall Act 1996?

It should be noted that ‘compensation’ under section 7 of the Act is different from that of an award of ‘expenses’ pertaining to a disturbance or inconvenience, or, damage and losses under section 11 of the Act.

Under section 11(8) of the Act an adjoining owner or occupier is entitled to receive money in lieu of a building owner’s obligation to make good and/or repair any damage that has been caused by the works of a building owner exercising their rights under section 2(2)(a), (e), (f) (g), (h) and (j). Under the Act this is considered to be an award of expenses. A surveyor would therefore be seeking to award an adjoining neighbour or occupier with monies that equated to the actual costs of making good any damage or perhaps the loss of use, disturbance and/or inconvenience.

Under this section a surveyor might award an adjoining neighbour for damage caused to driveways, underground services such as drains and pipes or the landscaping. If damage is caused as a result of the construction of new footings on an adjoining owners land, or, the building of a new wall on or next to a boundary line, the building owner who carried out the work is legally obliged to make good any damage that may have been caused to any adjoining owner’s property. Rather than a building owner calling back contractors to repair the damage caused, it is usual practice for the surveyor to include a clause in the Party Wall Award that the adjoining owner will receive money in lieu of the building owner repairing the damage.

Under section 11(11) of the Act there is a provision for compensation to a building owner for the subsequent use of any works carried out by an adjoining neighbour. However, for a building owner to take advantage of this provision, the expense of initial works must have been met solely by the building owner. This kind of compensatory award is commonly referred to as ‘Enclosure Costs’.

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. The Act further provides how such compensation should be calculated by assessing what the wall would cost to build at the time of the newly proposed extension and dividing the figure in half. This is designed to cover any inflation in cost that may have occurred between the time of the initial build and the subsequent build. Generally speaking, enclosure costs are usually included in a Party Wall Award and are due to be paid by the initial adjoining owner at the commencement of the subsequent works. It should be noted that the initial building owner who is entitled to be compensated need not be the same person that carried out the initial works. Any successor in title would be entitled to ‘Enclosure Costs’.

Icon Surveyors are happy to provide a free consultation on party wall matters to any building or adjoining owners who may be affected by the subject matter raised in this blog.

Icon Surveyors

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