Section 12 of the Party Wall etc. Act 1996 allows either neighbour to require Security for Expenses before notifiable works begin. In plain terms, it’s money held on account to cover foreseeable damage and urgent protection/support measures if something goes wrong during the works.
What Section 12 actually says (in brief)
- Adjoining Owner (AO) can serve notice requiring the Building Owner (BO) to provide security before starting Act works.
- If the AO either (a) requires the BO to carry out works that the AO must partly/wholly fund, or (b) requests security under s.12(1), the BO can in turn require the AO to give security for the expenses relevant to those items.
- If the amount or how it’s held can’t be agreed, the party wall surveyor(s) decide under Section 10 (dispute resolution).
What is “Security for Expenses”?
A ring-fenced sum (often held by a stakeholder—e.g., a firm of solicitors—under agreed terms) to cover:
- Damage remediation
Fast access to funds if the AO’s property suffers damage caused by the notifiable works. - Protection/support
Immediate temporary or permanent measures (e.g., shoring) if the BO’s works leave the AO’s property at risk (e.g., undermined foundations, unstable excavations).
Security is not a penalty. It’s a risk-management tool sized to the actual works and site conditions.
When and how does it come into play?
- Notice served: BO serves valid Party Wall Notice(s).
- Response: After dissent (or deemed dissent), either party may request security under Section 12.
- Agree or determine:
- Parties try to agree: amount, form, holder, release triggers.
- If not agreed, surveyor(s) determine the lot via the Award (s.10).
Typical holding arrangements
- Stakeholder solicitor client account (neutral).
- Escrow account under side agreement.
- Rarely, a bond or bank guarantee (sometimes preferred for large basements).
How do surveyors size the security?
Surveyors assess scope, methodology, ground risks, proximity, and the worst-credible case. They’ll usually consider:
- Excavation/foundation type and depth (e.g., basements, piling).
- Temporary works and sequencing.
- Fragility of adjoining structures.
- Realistic make-good costs and urgent propping allowances.
- Site access constraints and programme risk.
Market reality: figures range from ~£1,000 for low-risk works to £100,000+ for high-risk basement excavations or complex structural alterations.
Smart drafting inside the Award
A robust Award will specify:
- Amount of security and who holds it.
- Clear drawdown triggers (e.g., surveyor confirmation; emergency only vs. pre-approval).
- Evidence required (photos, contractor quotes, structural advice).
- Phased release aligned with risk milestones (e.g., after underpinning sign-off, after permanent works are tied in).
- Final release conditions (e.g., practical completion + defects period or set time frame with no unresolved claims).
Practical do’s and don’ts
For Building Owners
- Budget early for possible security—especially for basements, deep excavations, or complex alterations.
- Offer sensible phased security to help cash flow (e.g., reduce the sum as risk drops).
- Provide the structural method statements, temporary works, and programme promptly—this often reduces the security figure.
For Adjoining Owners
- Request s.12 early if risk is non-trivial; specify your concerns (excavation, lateral support, party wall stability).
- Focus on proportionality: the sum should reflect likely risk, not remote worst-case scenarios.
- Ensure the Award includes clear, quick access to funds for genuine emergencies.
For both
- Keep security separate from compensation: you can still claim damages under the Act; security just streamlines urgent spend.
- Security should decrease as the project de-risks; avoid leaving large sums locked up unnecessarily.
FAQs
Does asking for security stop the project?
It can delay start until security is set, but surveyors can determine it swiftly. Phased or interim arrangements often unlock programmes.
Can security be used for any dispute?
No—only for damage or necessary support/protection arising from Act works, per the Award’s terms.
What if we can’t agree?
The matter is determined by surveyor(s) under Section 10 and recorded in the Party Wall Award.
Want a proportionate Section 12 solution that protects both sides without stalling your programme?
Email team@simplesurvey.co.uk. Simple Survey are the lowest-cost party wall surveyors across England & Wales.