26 Jun Basement Construction and the Party Wall Act
In his ‘Metamorphoses’, Ovid tells the tale of Pyramus and Thisbe; two neighbours, separated by a wall, who whisper sweet nothings to one-another and fall in love without ever having met. The outcome, when finally they meet, is not a happy one; let’s just say it’s Romeo and Juliet meets one of the more violent scenes from Gladiator.
The intention behind the Party Wall Act is to achieve the exact reverse of this tragic tale. That is, to take two neighbours highly suspicious of each other and potentially ready to disembowel one-another given any further provocation, and to reconcile their interests in a way that produces a mutually beneficial outcome.
In this article I want to discuss the advantages of the dispute resolution process provided by the Party Wall Act as applied to basement construction projects. I hope that when the advantages of this process are properly realised we can dispel the myth that, in the absence of further intervention and regulation by planning authorities, basement construction projects are likely to tear communities apart in the manner of Thisbe and Pyramus.
The Party Wall Act was introduced to enable property owners living in close proximity to develop their properties without causing unnecessary inconvenience, uncompensated damage or stress to their adjoining neighbours. Through its various provisions the Act aims to facilitate a collaborative approach to developments on neighbouring land in a way that ensures adjoining owners are appropriately indemnified against the risk of any damage resulting from relevant developments that may be undertaken by their neighbours. In this way, the Act helps to promote development, while at the same time helping to alleviate the otherwise justified concerns of adjoining neighbours.
It is my belief that the mechanisms in the Party Wall Act more than adequately deal with most of the more serious concerns people have about basement construction. Moreover, the Act does this in a way that is more likely to produce mutually satisfactory outcomes than many of the proposed amendments to planning policies that are currently being considered by various London Councils.
The key difference is that while the Party Wall Act provides a mechanism for a negotiated outcome; promoting the interests of the neighbour wanting to add a basement to their property and those of the adjoining owner, the new rules suggested by various Councils turn the matter into a ‘win-or-lose’ zero-sum game likely to exacerbate tensions between neighbours.
The process set out in the Party Wall Act operates along the following lines: First the building owner wanting to build a basement (henceforth ‘the developer’) will serve a notice on the relevant adjoining owners setting out in detail the proposed construction plans, the size of the site, the extent of any works etc. The adjoining owners are then given the opportunity to consent to the work, to appoint their own surveyor or to appoint a joint surveyor who will work for both parties.
In the normal case we would expect (and advise) the adjoining owner to appoint their own surveyor. The developer will then appoint a surveyor of their own (if they have not already done so). The two surveyors can then scrutinise the proposed development and work towards an agreed construction plan which takes into account the priorities and interests of both landowners. All of the relevant issues can be appropriately scrutinised in detail by relevantly qualified professionals so as to reassure both parties as to the quality of the proposed development. It is likely that the professional team that will have ultimate design and build responsibility for the basement will have a significant involvement in the process as well. Testing may also be carried out to ensure that all plans are adequately based on the ‘real-world’ situation on the ground.
In order to ensure that any oversight by either side is adequately accounted for and the adjoining owner’s interests fully protected, it will usually be the case that the developer will be required to pay money into an escrow account under section 12 of the Act. This sum stands as security against any damage that may be caused during the course of or as result of the works. To ensure that both parties are adequately protected there must be agreement between the two surveyors before these sums can be released. In the event that the two surveyors disagree, the Act provides for the appointment of a third, independent, surveyor to resolve such disagreements.
Furthermore, during the course of the works there will be regular inspections to ensure that they are being done to an appropriate standard. Once the works are completed the two surveyors are required to make a final inspection to ensure that no damage has been caused to the adjoining property – if any damage is caused an appropriate award can be made in compensation.
This approach achieves a delicate balance between the interests of both parties. Firstly, it provides appropriate mechanisms for the interests of both owners to be taken into account in the design and planning of the works. This helps to ensure that the works are designed to an extremely high standard and helps to minimise any risk to the adjoining owner. Secondly it provides an effective indemnity against any damage that may be caused to the adjoining owner’s property. By ensuring funds are placed into an account before any works are commenced the adjoining owner is given plenty of security to address any fears they may have. Finally the process also provides a means for inspecting the works at multiple stages to ensure that they are actually being carried out to the requisite standard.
Furthermore, because basement developments are, by their very nature, technically complex they require a substantial input from an extensive professional team including: architects, engineers, contractors, geo-technical specialists and drainage experts. It is, of course, in the interests of both owners that an appropriately qualified and experienced team is in place. As much as the adjoining owner may be concerned about his neighbour cutting corners to save costs, it is self-evidently not in the interests of the developer for an unqualified team to commence large-scale and technically complex excavation works underneath their property.
As such, it is almost universally the case that highly qualified professionals are appointed to undertake these projects and, as a result, they are typically done to the highest standard. With two surveyors (one for each owner) appointed to monitor the works under the Act, the further input of a high degree of scrutiny ensures that there is typically very little for adjoining owners to be concerned about when their neighbours begin to develop basements.
At Devonshires we recognise the importance of having the most highly qualified individuals involved throughout the course of basement construction projects. The input of such professionals ensures that the works themselves run smoothly, that the finished product is of the highest standard, and that all affected neighbours can rest assured that the integrity of their own properties will be persevered. For this reason we work closely with the best regarded experts in the construction sector in order to help manage basement construction for those of our client’s developing basements, but also to advise and assist those of our clients who are adjoining owners and have legitimate concerns about what their neighbours are proposing.
By Nick Kaplan