Navigating construction works near party walls can be tricky—especially when it comes to compensation for the inconvenience and damage caused. If you’re a Building Owner or Adjoining Owner, it’s essential to understand the legal framework surrounding party wall compensation and the potential for disputes. The key legislation here is the Party Wall Act 1996—specifically section 7(2), which often comes under scrutiny in legal matters.
What Does Section 7(2) of the Party Wall Act Say?
Section 7(2) is one of the most commonly contested aspects of the Party Wall Act. It mandates that the Building Owner—the person carrying out the work—must compensate the Adjoining Owner for any loss or damage caused by the construction activities. In other words, if building work impacts your neighbour’s property or causes significant inconvenience, compensation may be due.
Inconvenience and Loss of Business or Rent
While typical building works generate noise, dust, and general disruption, the law expects Adjoining Owners to tolerate “reasonable” disturbance. However, when the disruption leads to quantifiable losses—such as lost rental income, lost customers, or reduced business profit—compensation becomes a valid claim.
The Building Owner is also required to carry out the work in a manner that minimizes inconvenience, adhering to health and safety and environmental laws. If the work is done improperly or without regard for the Adjoining Owner’s property, compensation may be sought for any resulting damages.
How Do Party Wall Surveyors Assess and Handle Compensation?
Here’s where the role of a party wall surveyor comes into play. Surveyors are responsible for ensuring that compensation claims are handled correctly.
Compensation Calculation:
If damage is confirmed, surveyors will obtain quotes for repairs. The compensation amount is typically based on these repair costs. If the loss extends beyond physical damage—such as lost rental income or a decrease in property value—the surveyors may need to bring in other professionals, such as accountants or property valuation experts, to calculate the loss.
When Can Compensation Cover Loss of Rent, Business, or Property Value?
In addition to physical damage, compensation can also be sought for:
- Loss of Rent:
If the building work makes it impossible to rent out the property as expected, compensation for lost rental income may be awarded. - Loss of Business:
If the disruption affects an ongoing business, leading to a loss of customers or profits, the Adjoining Owner may be entitled to compensation for this loss. - Reduction in Property Value:
If the construction work causes a permanent reduction in the value of the property, compensation could also cover the lost value.
What Happens If a Dispute Arises?
If there is a dispute over the compensation amount or the cause of the damage, the appointed Party Wall Surveyor(s) will step in to resolve the issue. They will usually prepare a Party Wall Award, which outlines the following:
- Specific details of the work to be done
- Any agreed compensation amounts
- Timeframes for the payment of compensation
If the Building Owner fails to pay the agreed compensation within the stipulated time, the Adjoining Owner can seek enforcement through the courts.
Additional Compensation Scenarios
- Delays:
If the Building Owner doesn’t finish the party wall works in a reasonable timeframe, compensation may be due for ongoing inconvenience. The Adjoining Owner may also be compensated if the work delays their ability to sell their property at a fair price. - Court Enforcement:
If the Building Owner fails to adhere to the Party Wall Award or doesn’t pay compensation, the Adjoining Owner has the right to seek legal action to enforce the decision in court.
Summary of Party Wall Compensation
In summary, the Party Wall Act ensures that the Building Owner is held accountable for any damage or inconvenience caused to the Adjoining Owner. If a dispute arises over compensation, the appointed surveyors will assess the situation, determine the appropriate amount, and create a Party Wall Award to resolve the matter.
If you find yourself in a situation where compensation is necessary, it’s important to consult with professional party wall surveyors to ensure that your rights are protected.
At Simple Survey, we’re committed to helping both Building Owners and Adjoining Owners navigate the complexities of the Party Wall Act, including compensation matters. If you’re dealing with party wall issues, don’t hesitate to reach out for expert advice and support.
Contact us today at team@simplesurvey.co.uk. We’ll help ensure a smooth and legally-compliant resolution to your party wall concerns!