On shaky grounds

Most of our towns and cities have huge areas of dwellings and other property with shared walls and structures. So the Party Wall etc Act 1996, which applies to commercial as well as residential properties, has enormous importance.

You will be familiar with the main points of the act – it deals with serving notice, it regulates excavation and the construction of foundations and resolves disputes by the appointment of a party wall surveyor. It's main purpose, however, is to reduce the number of disputes referred to the courts, and so is a useful piece of legislation.

But the act has shortcomings and this article focuses on one major difficulty: that of stabilising shared foundations, where two or more properties have a common foundation that is moving.

Section 6 of the act sets out a procedure for building owners to follow when they wish to excavate, or excavate for and erect, a building or structure within 3 m horizontally from any part of their neighbour's building and extending to a lower level than the bottom of the neighbour's foundations. The section also deals with excavation within 6 m of a neighbour's property. In either case, the building owner shall serve on their neighbour one month's notice indicating their proposals and stating whether they intend to underpin, strengthen, or safeguard the foundations of the adjoining owner. The adjoining owner serves notice of their consent within 14 days. If they do not, they are deemed to dissent and the matter will be referred to resolution by a surveyor.

Section 6 (3) of the act says that if the adjoining owner requires them to do so, the building owner shall at their own expense underpin or otherwise strengthen or safeguard the foundations of the adjoining owner.

A practical problem arises in the case of properties that have a shared foundation, and which are built in inherently unstable conditions. Both houses in a semi-detached unit, all the houses in a terrace, or all industrial units in a block may suffer some degree of movement. Let us imagine that, in one particular year, the movement becomes pronounced, and one of the property owners contacts their insurer. The insurer consults a structural engineer who advises that underpinning or other stabilisation to the foundation of that property is required. Notice is served on each adjoining owner. In some cases, a notice of work within 6 m may be needed and in the case of terraced houses, this notice may have to be served on next-door-but-one as well as on the next-door neighbour.

The neighbours may fear differential movement. If the foundation of one property is stabilised, but the other properties are not, then the shared foundation may hinge and crack. The adjoining owner may require the underpinning or safeguarding of their foundations.

The building owner must pay the cost of underpinning his neighbour’s property where it is necessary to avoid differential movement. Is this fair?

If merely by relying on section 6 (3) an adjoining owner can have their property stabilised at their neighbour's expense, then there is likely to be tactical warfare between neighbours who inhabit dwellings with a common foundation. There will, in effect, be a game of "who goes first?". The first neighbour to serve a section 6 notice, indicating that they intend to carry out foundation works, will inevitably bear the cost of any stabilisation work to their neighbour's property to prevent differential movement from occurring.

In many cases, it is insurers who pay the costs of stabilisation. Where the insurers' structural engineer advises underpinning, insurers may be reluctant to go ahead if they know that the consequence is that they may have to pay for the stabilisation of several properties.

According to section 11 (9), where works are carried out at the request of the adjoining owner, they shall pay the expenses of carrying out the work requested. However, Stephen Bickford-Smith and Colin Sydenham in their book Party Walls: The New Law, are quite clear that section 6 (3) overrides section 11 (9). If so, the building owner must bear the cost of underpinning the neighbour's property. But is this wise, and fair?

Section 11 (11) states that where use is subsequently made by the adjoining owner of work carried out solely at the expense of the building owner, the adjoining owner shall pay a due proportion of the expenses incurred. The adjoining owner would certainly make use of stabilising work to prevent differential movement, but the precise relationship between section 11 (11) and section 6 (3) is not clear.

Section 6 (10) states that the building owner is liable for injury to any adjoining owner in respect of any work they have executed. If the adjoining owner did not specifically require the building owner to undertake measures to safeguard their property against differential movement, and such movement subsequently occurred, then it would be arguable that the building owner was liable under section 6 (10) for the movement. On the other hand, it would be arguable that the movement in the adjoining property was occurring not because the building owner had stabilised their property, but because the site was chronically unstable and the adjoining owner had simply failed to stabilise their own property.