Where an Adjoining Owner suffers loss or damage arising from works within the scope of the Party Wall etc. Act 1996 and the statutory procedures have been followed, the Act provides a framework for how that damage is to be made good or compensated.
Why “procedures followed” matters (No Notice, No Act)
The Act requires the Building Owner to serve valid notices and (if there’s dissent or no reply) obtain a Party Wall Award before carrying out notifiable works. Following Power & Kyson v Shah [2023], if no notice is served, the Act isn’t engaged—there is no remedy under the Act. The Adjoining Owner must instead look to common-law routes (trespass, nuisance, negligence) and/or injunctions.
Grey area: Where some steps were taken (e.g., notice served but works started before an Award), seek legal advice; outcomes can be fact-sensitive.
The statutory indemnity (s.7(2))
Section 7(2): “The building owner shall 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.”
Key points:
- This is a strict statutory duty to compensate for loss or damage caused by Act works.
- Common-law principles guide quantum: typically cost of repair or diminution in value, whichever fits the facts (and avoids over-compensation).
“Make good” obligations for certain Section 2 rights (s.2(5))
Where the Building Owner exercises specific Section 2(2) rights (works directly to a party structure—e.g., cutting in, raising, etc.), Section 2(5) adds a make-good duty:
Section 2(5): Rights falling within (f), (g) or (h) are exercisable subject to making good all damage occasioned by the work to the Adjoining Owner’s premises (including internal finishes and decorations).
In these cases the default is physical reinstatement (make good). However:
Payment in lieu (s.11(8))
Section 11(8): The Adjoining Owner may require that the expense of making good be determined under s.10 and paid to them in lieu of physical reinstatement.
Why this matters:
- Make-good ≠ loss. If the Adjoining Owner hasn’t suffered a loss (e.g., a structure earmarked for demolition), there may still be a make-good obligation—and the Adjoining Owner can elect for payment in lieu of that reinstatement.
Sections 1 and 6: compensation only
For Section 1 (new walls at the line of junction) and Section 6 (adjacent excavation), the Act does not impose a make-good duty; the remedy is compensation under s.7(2) for loss/damage caused.
Practical guidance on assessing and agreeing quantum
Evidence & causation
- Map alleged damage to activities/methods (e.g., breaking-out, piling, temporary works).
Measuring loss (two main approaches)
- Cost of repair (like-for-like reinstatement, including access, prelims, reasonable contractor OH&P, VAT where applicable).
- Diminution in value (where repair is impracticable/disproportionate or where market value impact is the better measure).
Betterment: avoid upgrading at the other owner’s expense; apply reasonable allowances for age/condition where relevant (e.g., decorations due for renewal).
Typical heads of claim
- Building fabric repairs (cracks, spalling, water ingress).
- Finishes/decoration (whole surfaces where patching would be visibly inferior).
- Access and enabling (towers, temporary protection, clean-down).
- Professional fees proportionate to scope (e.g., specialist reports, not full design teams).
Process under the Act (when engaged)
- Parties exchange quotes/schedules; appointed surveyor(s) determine quantum via Award (s.10(10)).
- Adjoining Owner may elect payment in lieu where make-good applies (s.11(8)).
- The Award should state method, amount, time frames, and who pays.
Example scenarios (how outcomes can differ)
- Party-structure cut-in causes plaster cracking (s.2 rights):
Default: Building Owner makes good; Adjoining Owner can require payment in lieu (s.11(8)). - Excavation within 3m causes garden wall movement (s.6):
Remedy: Compensation under s.7(2). No automatic make-good duty; quantum may be repair cost or diminution depending on condition/feasibility. - Minor hairline settlement to a room due for redecoration:
Apply betterment sensibly—perhaps fund a full wall redecorating where patching is inadequate, but not a wholesale upgrade of the entire property.
Owner checklists
Adjoining Owner
- Gather evidence: photos, dates, areas affected; keep copies of the Schedule of Condition.
- Obtain clear, itemised quotes (scope, method, access, prelims).
- Decide if you want make-good or payment in lieu (where s.2(5) applies).
- Present a concise claim with a response deadline to crystallise any dispute.
Building Owner
- Acknowledge promptly; request any missing detail once.
- Where causation is clear, offer making good or fair compensation early.
- Check for betterment and propose reasonable adjustments, not blanket rejections.
- Keep the Award terms in view (time/manner, protections).
Key takeaways
- s.7(2) provides a statutory indemnity for loss/damage caused by Act works.
- Certain s.2 rights carry a make-good obligation, with Adjoining Owner’s option for payment in lieu (s.11(8)).
- s.1 and s.6 routes are compensation-only (no make-good obligation).
- If no notice was served: No Notice, No Act—remedies are common-law.
- Quantum follows common-law principles: cost of repair vs diminution, adjusted for betterment and proportionality.
Want a calm, evidence-based settlement?
Email team@simplesurvey.co.uk—the lowest-cost party wall surveyors across England & Wales—for clear advice on structuring claims, choosing between make-good or payment in lieu, and securing robust Awards that resolve damage fairly and fast.