PARTY WALL ETC ACT 1996 


Section 12(1)

An Adjoining Owner may serve a notice requiring the Building Owner, before he begins any work in the exercise of the rights conferred by this Act to give such security as may be agreed between the owners or, in the event of a dispute, determined in accordance with Section 10.

What are expenses?

The actual cost of carrying out the work ie prime cost of the work including reasonable incidental fees and insurances (preliminaries).

What are the works “in the exercise of the rights conferred”? 

The rights are set out in Sections 1(6) and 2(2)

Definition of Building Owner

“Means an owner of land who is desirous of exercising rights under this Act”.  In the case of Section 6 whilst the Building Owner is exercising rights he is not exercising ‘conferred rights’ he already has the natural ‘right’ to excavate on his own land (non-conferred right).

What is security?  “An assurance.”  “A document held by a creditor as guarantee of his right to payment.”  (OED).  

Security is given for “expenses”.

How are expenses defrayed?

Expenses are generally defrayed in accordance with the provisions set out in Section 11 (Expenses) and in particular paragraphs 1, 3, 4, 5 and 9.

What if the Building Owner causes damage to the Adjoining Owner’s property?

Where damage is occasioned to an Adjoining Owner’s premises the Building Owner is required, under Section 7 (2),  to compensate any Adjoining Owner and any adjoining occupier for any loss or damage which may result to any of them by reason of any work executed in pursuance of this Act and under Section 11 (8) where the Building Owner is required to make good any damage under this Act the Adjoining Owner has a right to require that expenses of such making good be determined in accordance with Section 10 and paid to him in lieu of the carrying out of the work to make the damage good.

Interpretation of Statute

Statute must be construed by reference to precedent and the ordinary and natural meaning of the word or phrase. “Where Parliament has continued to use words of which the meaning has been settled by decisions of the Court, it is presumed that Parliament intends the words to continue to have that meaning”. (London Corporation –v– Cusack Smith 1955).  

The Court of Appeal in Saul –v- Norfolk County Council concerning the Agricultural Act stated that “in pursuance” should be interpreted as “in exercise of the authority conferred by”.

The word “confer” is synonymous with “to give, bestow, grant or confer.” (OECD). One cannot sensibly grant a right to do something which the Grantor is already empowered to do, for example, excavate or build on his own land.  

Kaye –v- Lawrence

Mr Kaye sought security by way of a £2 million bond or project specific insurance policy against potential damage to his property by the Building Owner’s works.

Ramsey J found:- ….. “that in accordance with the authorities cited above, the common law rights are supplanted and substituted by the provisions of the Act and that this applies as much to Sections 6 (1) and 6 (2) as it does to Section 6 (3) or any other provision of the 1996 Act.  I do not consider that this is a proper distinction between rights that only exist under the 1996 Act and rights that exist at common law and which as regulated by the 1996 Act.”  There is no difference between “conferred” and “natural” rights.  This begs the question why in the drafting of the Act a variety of terms are used in reference to “rights”?

In taking this line the Court ignored the fact that Sections 1, 2 and 6 are disparate – each having its own notice and dispute resolution procedures in 1(8),5 and 6 (7). 

Sections 1 (5), 6 (1) and 6 (2) relate to the exercising of common law rights for which the Act imposes a statutory notice and without which the Adjoining Owner would be unaware of building work likely to affect him in some way.


In Kaye –v- Lawrence the Court was not asked to deal with the real concerns of the Adjoining Owner ie that his building was going to collapse into the Building Owner’s excavation ie ignoring Section 6 (3).which confers on the Building Owner the right to underpin etc the Adjoining Owner’s building and to the Adjoining Owner the right to have his property underpinned if necessary.

 It appears that the Third Surveyor in making his Award called for a different method of construction than originally proposed and that the Building Owner and his professional team should effect adequate insurance, requirements that did not satisfy the Adjoining Owner who then sought security for expenses.  

The Court did not consider the reason for giving security (which is for “expenses”).  Generally in accordance with Section 11 expenses for work under the Act are to be defrayed by the Building Owner and if there is a dispute as to responsibility it has to be settled in accordance with the provisions of Section 10.  If we look carefully at how expenses are to be defrayed we see that in Section 1 (3) (b) the two owners of a party wall defray the expenses of construction as set down in the clause.  Similarly in Section 11 (4) expenses are to be defrayed in accordance with the use made of the structure or wall or the responsibility for the defect requiring repair.  A similar provision is found in Section 11 (5).  In Section 11 (9) where an Adjoining Owner requests work to be carried out on his behalf he is required to defray the expenses.  The pattern established here is that the Building Owner generally pays but where the Adjoining Owner is liable for the cost of works to a party wall he is required to contribute payment.  These are very different situations from a Building Owner excavating his own land in proximity to his neighbour’s property where in Section 6 ‘conferred’ rights are not granted.

Mr Kaye was apparently living in fear of his neighbour’s potential actions.  He wished to ensure that if something went wrong on the adjacent construction site he had sufficient funds to deal with the remedial work, however, it is submitted that he would not have had a right to enter the Building Owner’s site in order to, for example, prop up a retaining wall or perhaps install fulltime drainage.  His only potential remedy, if sufficient space allowed, would perhaps have been to install sheet piling, or something similar, on his own land.  That may not have been technically practical thus presumably the request for security was based upon an assessment of how much it would cost to rebuild Mr Kaye’s house in part or in whole if it collapsed. Was that a reasonable assumption?  Are all Section 6 works now to be subject to the presumption to a cataclysmic outcome?  Will Surveyors, regardless of all other circumstances, now advise their appointing owner to require security? 

The Act is specific that where a Building Owner causes damage to the Adjoining Owner’s premises the latter has an optional right to seek the “expenses” of repair. This is an expense to be defrayed by the Building Owner (see Section 11 (1). It is not a “right” conferred under Section 2 of the Act.  The Section 11 (8) provision can be contrasted with Sections 1 and 6 where damage occasioned to the Adjoining Owner’s premises as a result of exercising non-conferred rights is to be settled by the payment of “compensation”.

“Security” is not given for compensation but for “expenses”.  The conditions attached by way of clauses in Section 11 to “conferred” rights in Section 2 require any damage occasioned by the Building Owner to the Adjoining Owner’s premises to be made good.  They do not give the Building Owner a right to damage the Adjoining Owner’s building so that security may be requested.

Ignoring the personal standing of the Building Owner the second limb for seeking security relates to the proposed work and if this poses a risk to the Adjoining Owner’s property the Surveyors should first take steps to eliminate or ameliorate that risk.

Resulting from Kaye –v- Lawrence it is likely that Surveyors will be confronted with requests for security that hitherto had been rare and generally confined to offshore companies and individuals wishing to carry out potentially risky work to party walls and in this regard one immediately thinks of excavating and underpinning for sub-basements? In practice these risks are managed by insurance and Surety Bonds.

It is submitted that security for expenses can only be properly given when a “conferred” right is to be exercised and that the terms of that right have been settled, the Surveyors having decided that security may be appropriate and has been properly quantified; all before work commences.  The County Court decision in the case of Kaye -v- Lawrence has not altered this procedure.