I was recently at a short course for some aspiring and some practising residential developers when the issue of party walls came up. Many of the attendees were engaged in small-scale conversions or adding additional space in existing dwellings. I asked them whether party wall disputes were a common issue. The response was pretty definite – they were. James Pickford has a good piece on them in the FT today focussing on the growing use of security deposits.
The problem is not the procedure for deciding on how a basement is to be built or safety issues, but the security deposit that neighbours are now increasingly demanding — and which the Act says they have a right to require — in case the build goes wrong. Although this is merely a deposit, which is held and returned at the end of the work, the sums being demanded are rising fast. Today, a five- or six-figure sum is not unusual, forcing the person doing the work either to find the cash upfront or dispute the amount (this also carries a cost in terms of delay and uncertainty). Advisers are convinced that in some cases, an eye-watering security deposit is being used by neighbours as a tactic to frustrate and delay work, raising costs for the owner.
Luckily, the wonderfully named Pyramus and Thisbe Group (think Institute for Party Wall Surveyors) have produced brand new guidance.