Building Owners’ future liability

The Par­ty Wall Solic­i­tor, Matthew Hear­sum, recent­ly brought atten­tion to the Build­ing Own­ers future lia­bil­i­ty to RICS Build­ing Sur­vey­ing Jour­nal Decem­ber 2013 / Jan­u­ary 2014. Often tak­en as a giv­en, it is an impor­tant point to raise in engage­ments with Par­ty Wall Sur­vey­ors and clients.

Build­ing Own­ers or those per­sons (for the sake of dis­cus­sion BO1) car­ry­ing out work in pur­suance of the Par­ty Wall etc. Act 1996 must bear in mind that they may be per­son­al­ly liable for the cost of addi­tion­al works to adjoin­ing owner’s prop­er­ty required as a result of the adjoin­ing own­er, now a Build­ing Own­er (BO2), under­tak­ing works in pur­suance of the Par­ty Wall etc. Act 1996.

This stems from S7(2) of the Par­ty Wall etc. Act 1996 which states:

“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.”

Sim­i­lar­ly, the result of which may also pre­cip­i­tate in S7(1) as a cause to incon­ve­nience.

Any loss to an adjoin­ing own­er must be quan­ti­fied in an accu­rate val­u­a­tion. Such loss­es can include per­ceived loss in val­ue to prop­er­ty as a result of the works. The costs must be paid by the BO1 2 months after the day of com­ple­tion of work by the Adjoin­ing Own­er S11(10).

This con­trasts to the pro­vi­sion in S11(9) of the Par­ty Wall etc. Act 1996 which makes the adjoin­ing own­er liable for costs incurred at the time of con­struc­tion should they make design requests in respect of mak­ing a struc­ture com­pli­ant with their future use. It is sup­port­ive of S11(10) in the con­text of spe­cial foun­da­tions (rein­forced con­crete).

Future Liability 

The lia­bil­i­ty is said to be “per­son­al” and can­not be annexed to the prop­er­ty reg­is­ter and there­fore passed to the suc­ces­sors in title. As a result of car­ry­ing out works under the Par­ty Wall etc. Act 1996 a Build­ing Own­er may there­fore encounter a claim for loss years after the prop­er­ty has been sold. Mason v Ful­ham Corpn [1910] 1 KB 631 & Carl­ish v Salt [1906] 1 Ch 335, relate to ear­li­er leg­is­la­tion but place sig­nif­i­cance on the dis­clo­sure of the served Awards and Notices under the Par­ty Wall etc. Act 1996 to pur­chasers.

That said such cas­es were heard before the Law of Prop­er­ty Act 1925, lat­er Land Reg­is­tra­tion Acts, Land Drainage Act 1991 and bet­ter defined prin­ci­ples of ben­e­fit and bur­den in free­hold estate, con­cepts your legal advis­er should be able to assist with.