The recent Court of Appeal Case, Power & Kyson v Shah  EWCA Civ 239 confirmed that adjoining owners can only rely on the Party Wall Act where the building owner wishing to do works has served notice under the Party Wall Act (the Act).
Both the building owner wishing to do the work and adjoining owners, whose property is affected by the works, will potentially lose out if the appropriate party wall notice is not served.
What is the Party Wall Act?
A building owner wishing to work on a party wall (or generally speaking a wall/structure shared with their neighbour) or excavate near an adjoining neighbour’s wall should serve notice on their neighbour under the Act. This notice initiates a procedure enabling their neighbour to agree to the proposed works before they are carried out. This procedure provides a mechanism for resolving disputes including appointing surveyors to make awards and to determine how any works are carried out.
Click here to the Government’s explanatory note on the Party Wall Act.
The Facts of Power & Kyson v Shah
In this case the building owner, Mr Shah, did not serve a party wall notice on his neighbours, (Mr and Mrs Panayiotou) before undertaking works to his semi-detached property. Mr Shah’s neighbours believed that whilst carrying out the works Mr Shah caused damage to their property and therefore appointed a party wall surveyor who appointed a party wall surveyor for Mr Shah (which can occur if the Act applies). The two surveyors made an award for compensation for the damage to Mr and Mrs Panayiotou’s property caused by Mr Shah’s works. They also (as is usual under party wall awards) claimed their fees for dealing with the matter. Mr Shah did not pay as he claimed the Party Wall Act did not apply. So the surveyors took the matter to court to enforce their award and the matter made it all the way to the Court of Appeal.
The Court’s decision
The Court determined that surveyors have limited jurisdiction. They do not have the right to resolve any dispute between the parties just those that arise from the Act. As Mr Shah, had not served notice under the Act it did not apply and the surveyors could not make any award under it. Lord Justice Coulson stated; “the service of the notice is fundamental to the whole structure of this part of the Act”. Therefore, party wall award made by the surveyors in this case was therefore null and void.
What does the Court of Appeal’s decision mean for property owners?
A neighbour of a building owner who wishes to do party wall works who does not receive a notice under the Act, is not protected under it. They lose the ability to seek a party wall award.
The only remedies available to them against the offending building owner are common law remedies such as injunctions, nuisance, trespass or breach of statutory duty. These remedies are likely to be more expensive than using the dispute resolution procedure under the Act. For example, injunctions require fast action and the Court may require the adjoining owner to cross undertake damages which means you need a large sum of money available at the beginning of the dispute. Proving a nuisance or trespass claim can be complicated and even if you can make out your claim the remedies you can receive may not be as useful as those under the Act.
So is there an advantage to a building owner of not serving a Party Wall Notice on their neighbour?
At first glance failure to serve notice might seem to be advantageous to the party wishing to do the works. However, the Act is not just an adjoining neighbour’s friend but it can also be the building owner’s for three key reasons:
Access – a building owner who does not serve notice under the Act will also lose the benefit of it. The biggest benefit is arguably that when the building owner has complied with the Act it has the right to carry out the works and the right to enter their neighbour’s land to carry out works. Without the Act these actions are instead likely to be considered as trespass, and/or nuisance.
Evidence – the Act can help facilitate steps such as the building owner being able to obtain a schedule of condition of the adjoining owner’s property before they begin any works associated with the party wall. This can be a helpful tool if their neighbour claims that any damage has been caused to their property by the works.
Costs – resolving disputes outside of the Act is often an expensive and lengthy process. The Act governs the way disputes are handled providing certainty in relation to procedure and a streamlined and specialist process. This decreases potentially helps to decrease build delays and can be especially important where deadlines effect development finance or agreed completion dates.
It has also been suggested that, if no notice is served by the building owner and therefore their neighbour has to pursue a common law claim the building owner could be liable to pay the other side’s costs on an indemnity basis (which can be high).
For more information on the benefits of the Party Wall Act (especially in relation to listed buildings) please see the recent article from our residential conveyancing team here.