Alison Hardy and Chloe Meredith play sheriff in a bid to clean up the law on party wall disputes.
According to the government website, the Party Wall etc Act 1996 provides a framework for preventing and resolving disputes in relation to party walls, boundary walls and excavations near neighbouring buildings. There has not been much case law on it, and so it could be hailed a success story. But is that really true? Not in our experience. We think the lack of case law might be because the Act creates a closed shop, takes power away from the parties, and the value of disputes makes litigation disproportionate. When things go wrong with party wall matters, it can feel like you are in the wild west.
Many party wall appointments are concluded without legal advice. There is no standard-form appointment and so parties often find that they sign away powers to “their” surveyor which go beyond the original works, and authorise surveyors to serve notices without prior approval by the party. Sceptics might say this enables rogue surveyors to trigger work for each other, approve each other’s costs and make those costs payable pursuant to awards, while the parties look on powerless.
Doesn’t it only affect residential properties?
In short, no. While the Act has been largely used in the domestic sector, rarely affecting commercial developers, we see it increasingly being relevant to commercial properties. This is partially down to government support for rooftop or airspace developments, combined with more city centre developers taking on sites in confined spaces. We are increasingly seeing problems with how the Act is deployed and it is time the government addressed these problems in order to enable the delivery of much needed homes.
Does “your” party wall surveyor have to act in your best interests?
The duties of the party wall surveyors are limited. They owe a duty of care to both parties to act impartially and with care when producing awards that enable party wall works to be undertaken. At the same time, they owe a duty to ensure that the works are executed in a manner that does not cause harm to neighbouring owners.
Do surveyors need any qualifications?
Given the technical and quasi-judicial nature of the party wall surveyor’s role, one might reasonably expect surveyors to be qualified and regulated professionals. Unfortunately, there is no obligation for them to be so. All the Act requires is that the surveyor not be “a party to the matter”.
Little comfort is given by membership of the well-known Pyramus and Thisbe Society. It does not require any professional qualifications for membership and, while it encourages continuing professional development, the society is not the place to resolve a party’s concerns and should not be expected to lead reform. This is because although there is a complaints procedure, the society will not consider complaints about awards, and the most serious outcome is terminating a membership. The society itself states that it does not have formal complaint or disciplinary procedures.
Problems can arise where woefully underqualified individuals accept appointments. We have seen projects delayed, costs spiral and junior surveyors rely on the expertise of the neighbouring owner’s surveyor to the detriment of their appointing party.
This is exacerbated by lack of regulation. We would advise clients to appoint a RICS-approved surveyor, as the RICS imposes higher standards on its members than the Act requires and, if the surveyor’s service is inadequate, a complaint can be made to the RICS. However, if unregulated surveyors have been appointed and are failing to meet expectations, there is little room for manoeuvre.
Can’t you just replace your surveyor?
Again, the answer here is no. A party who feels they are simply not being heard by their surveyor cannot fire them. Once you select a party wall surveyor, you are stuck with them until they declare themselves incapable of acting or, more drastically, die. If your party wall surveyor refuses to declare themselves incapable, then there is nothing you can do to remove them.
Is the third surveyor the answer?
The third surveyor is not necessarily the answer either. A third surveyor is normally appointed at the same time as the surveyors acting for each of the building owner and adjoining owner. Their role is to act if one of them becomes unable to proceed or to mediate any differences that arise between them or between the two owners. However, the third surveyor does not have power to mediate differences between an owner and their surveyor or concerning existing awards.
Proposals
In our view, the following changes should be made:
- All party wall surveyors should be independently regulated.
- The Act should be amended to set out the duties the surveyors owe to the parties.
- Where each party has appointed a surveyor, the surveyor should be acting for that client, and representing their interests. Only where there is one joint surveyor should the surveyor be impartial.
- The Act should grant the third surveyor the power to resolve differences between an owner and their surveyor.
- Surveyors should act either as expert or arbitrator, and should be required to act reasonably, provide reasoned decisions, and for the parties to have a right of appeal.
- A party should be able to replace their surveyor by serving notice and replacing them.
- There should be an industry-approved standard appointment approved by the Law Society/City of London Law Society/RICS.
Alison Hardy is a partner and head of real estate dispute resolution and Chloe Meredith is a senior associate at Ashurst LLP