• Ben Mackie

Ways in which a party wall surveyor can screw you over…

This article looks at the behaviour of party wall surveyors, and how this can directly affect someone wishing to undertake work in pursuance of the Party Wall etc. Act 1996. It isn’t just building owners who are affected - adjoining owners can end up in difficulties too.

Party wall surveyors do not have the best reputation, and it is important to identify poor behaviour so that efforts can be made to tackle it. Surveyors need to raise their game and work harder to improve their reputation. This can be difficult as there are often financial incentives for surveyors to act disproportionately, inappropriately and unnecessarily.


Here are some of the ways in which a party wall surveyor can screw you over:

1. Not promoting the agreed surveyor

2. Inclusion of further or final inspections in awards

3. Security for expenses (and the loophole)

4. Special foundations

5. Enclosure cost

6. Excessive fees and demands

7. Third surveyor selection and adjudication

8. 10(4) appointments

9. Poor advice on notices

10. Letter of appointment

1. Not promoting the agreed surveyor

The adjoining owner dissents to a notice and appoints his own surveyor. The building owner’s surveyor then proceeds to agree an award with the adjoining owner’s surveyor. The building owner settles both surveyor’s fees – as is customary.


The building owner’s surveyor should have advised the building owner of the possibility that the adjoining owner’s surveyor could act as the ‘agreed surveyor’. This would lead to the forfeiture of the building owner’s surveyor’s fee, so understandably, the building owner’s surveyor often keeps this option quiet. The result is that he retains his fee and the building owner is none the wiser.

The agreed surveyor route doesn’t always work out, and it isn’t always the best option, but the Act intended that this role would be much more common than it is.


2. Inclusion of further or final inspections in awards

An award typically allows for a final inspection. There are many examples where a final inspection can be a good idea, however, final inspections seem to be undertaken without thought or care. Shockingly, many final inspections aren’t even carried out, and the building owner still pays.


An award does not mean the building owner is definitely going to do the work. It just says that ‘if’ the building owner carries out the work, then there are conditions by which he has to abide. The inclusion of a final inspection and its associated fee within an award may not be legal. The building owner is being forced to pay upfront for an action that may not occur. Furthermore, the fee is often shown as one sum, and is not broken down, so the building owner cannot see the difference between work completed, and work to be carried out.


The approach to final inspections and fees needs to change. When a building owner is required to settle enclosure costs, he does so at the time that the enclosure is made. The same principal can apply with final inspections, in that the building owner can pay a further agreed fee, but only upon completion of the final inspection by the adjoining owner’s surveyor. Interim inspections can be treated in much the same way.


Surveyors also need to justify further and final inspections. Are they proportionate, appropriate and necessary? Are further inspections dispute-generating or vital in settling a dispute?


Lastly, what happens when the final inspection does not take place? The surveyor has been paid, and there is simply no motivation to undertake a further inspection unless prompted. There are many inspections that have not been carried out, either because the work did not go ahead, or because the surveyor failed or neglected to do so. Either way, the building owner has paid.


3. Security for expenses (and the loophole)

Security for expenses is one of the biggest fears that building owners face. It can very quickly make their project unviable. The Act, which is supposed to be a ‘safety net’ and not a ‘fiery hoop’ (Lytton 1996) has clearly failed on this front.


‘Requests for security used to be rare in party wall cases. No longer.’ (Isaac 2017)

The increase in requests for security shows no correlation between a rise in damage or issues associated with work in pursuance of the Act. It is becoming increasingly common, moving over from basement builds, to lofts and extensions.


Projects are starting to fall through with increasing frequency due to the burden of security for expenses. Furthermore, security for expenses can become tit-for-tat. Incredibly, a building owner can request security under section 12(2)(b) simply because an adjoining owner has served notice on the building owner under section 12(1). Further, if the adjoining owner fails to respond, he will lose his right to security. Essentially, this is a loophole by which a building owner can avoid a request for security.


4. Special foundations

It is well known that there are surveyors who use the requirement to get written consent for special foundations to the advantage of the adjoining owner. The surveyor advises that consent to special foundations should only be given on condition that the building owner waives his future right to section 11(11) enclosure costs i.e. the adjoining owner gets a free basement wall (which is worth a lot of money). Having to avoid requesting consent to special foundations has led to arguments that it is possible to ‘downward raise a party wall’ under section 2(2)(a) and that the foundations are not foundations but are actually walls. These arguments are in part due to the flawed nature of the Act combined with the unethical assertiveness of some practitioners.


5. Enclosure costs

A building owner wishing to raise the party wall or build a wall astride the boundary has the right to receive payment as per section 11(11) of the Party Wall etc. Act 1996. It makes sense, that if a building owner is paying for a wall, and an adjoining owner later makes use of that wall, that the building owner should receive a fair contribution.


Surveyors have used enclosure costs as leverage, promoting unfair behaviour. For example, they advise the adjoining owner to try their luck, by allowing a wall to be built astride the boundary, on condition that if they make use of the wall at a future date, they will get it for free. Neighbours are free to agree anything, but it is poor when a surveyor instigates unneighbourly behaviour.


6. Excessive fees and demands

Excessive fees are one of the biggest issues affecting party wall surveyors and their appointing owners. It is vital to understand that building owner’s surveyor’s fee is often cheaper than the adjoining owner’s surveyor. This is because a building owner will often charge less, to attract business. There is nothing wrong with low fees, but the building owner’s surveyor should set realistic expectations.


The building owner is misled by his surveyor, who assures him the work is simple and should be dealt with quickly and cheaply. This is an illusion, and too often, reasonable behaviour by another surveyor is portrayed as excessive, including what are reasonable fees.


However, there is greed in this industry, and fees are both high, and often unnecessary. Excessive fees cover a broad area, from unnecessary interim and final inspections, to expending many hours debating the intricacies of the Act when really the dispute is screaming out for a simple, sensible outcome. There is stubbornness amongst surveyors, whether it is snobby behaviour from chartered surveyors who will not engage with non-chartered surveyors (grinding the process to a halt), to simply refusing to budge on their position. Successful dispute resolution relies on flexibility which is too often lacking in those tasked to administer the Act.


In determining whether fees and behaviour is excessive, a great mnemonic to use is PLAN:


· Proportionate


Is the fee proportionate to the work proposed? Are the actions of the surveyor proportionate to the realistic risk posed by the building owner’s proposals?


· Legal


Interpretation of the law is vital when it comes to justifying actions. For example, if the only notifiable work is excavation for foundations, then surveyors should not be commenting on other aspects of the build.


· Appropriate


Is a proposed course of action, the right course of action for the job? Surveyors often have checklists which can include CCTV surveys, monitoring, security for expenses amongst other safeguards. In certain circumstances, all of these safeguards are fine, but surveyors should determine the appropriateness of each request.


· Necessary


A surveyor should only undertake ‘necessary’ actions which should clearly encourage dispute resolution. This ties in with understanding the law, however, there are plenty of actions such as further inspections that may be legal, but not necessary. Is it necessary for a surveyor to inspect a property when the adjoining owner can just send some photos? The surveyor will obviously pick up a nice fee if he leaves the office, but the surveyor’s actions need to be scrutinised.


If a surveyor’s fee or behaviour falls foul of just one of the above, it is likely to be excessive, and the building owner who is expected to pay is being let down. Each action needs to be proportionate, legal, appropriate AND necessary.


7. Third surveyor selection and adjudication

Selecting a third surveyor is one issue, but the process itself is questionable. An adjoining owner’s surveyor can have an excessive fee challenged, and if the third surveyor finds that his fee is unreasonable, the adjoining owner will end up paying the third surveyor’s fee, the building owner surveyor’s fee and his own surveyor’s fee, for the third surveyor award settling a dispute based purely on an excessive fee. The adjoining owner is simply punished because he has, unbeknown to him, appointed a greedy surveyor. Further, if the letter of appointment is such that the adjoining owner has agreed to pay any fees not awarded, there will be a further fee to settle.


8. 10(4) appointments

When an adjoining owner does not respond to a notice, a surveyor needs to be appointed to act on his behalf (save for building a wall wholly on the building owner’s land with no further notifiable work). This is called a 10(4) appointment and is in effect, a trade. A company can calculate that it has £30,000 worth of 10(4) appointments each year, and this is an asset which can work for the surveying practice. They can approach another practice and they can have an ‘arrangement’ where they simply refer 10(4) jobs to each other, increasing profits.


There is nothing stopping a surveyor appointing another surveyor in the same practice. Whilst this can reflect poorly, it is legal.


Where poor behaviour really comes into play is a surveyor, withholding notices, to install another surveyor, with whom he can quickly agree an award. The law is unsympathetic to those who claim not to have received mail (this can include court summons, legal letters, debts etc.). It isn’t enough for an adjoining owner to say that they didn’t receive a notice, they would have to prove it, and that is very difficult.


Luckily, this type of behaviour whilst infuriating, is likely to be very rare. Sadly, it has happened, and when it does, it can deprive the adjoining owner the right to appoint their own surveyor, or, it can result in an unnecessary fee being paid out by the building owner if the adjoining owner would have consented.


9. Poor advice on notices

The building owner’s surveyor serves a notice and asks the adjoining owner to contact him. The surveyor receives a call and encourages the adjoining owner to dissent, thus securing a fee. Many surveyors give good, clear, impartial advice, but there are many too, who are under pressure to hit monthly fee targets and generate money for their practice. It is very easy for a surveyor to plant seeds of doubt in the adjoining owner’s mind and thus do enough to generate a dispute.

Notices themselves are also questionable, and often contain a section stating that in the event of a dispute, the building owner will appoint the building owner’s surveyor. The wording can be poor, reducing the chances of the agreed surveyor route.


10. Letter of appointment

A letter of appointment is often signed unnecessarily, prior to a dispute. A surveyor can serve a notice as an agent. It ties in with the problem that the agreed-surveyor route is not promoted enough. If the building owner already has his surveyor appointed, the adjoining owner can only go with the building owner’s surveyor to act as the agreed surveyor. Often, the adjoining owner wishes to choose the surveyor, and the building owner should have the opportunity to assess the suitability of the adjoining owner’s surveyor to act as the agreed surveyor. The building owner’s surveyor can deem himself incapable of acting, to facilitate the adjoining owner’s surveyor acting as the agreed surveyor, but the damage is often already done, as the illusion was created that this would be a three-surveyor tribunal.


Some appointment letters also place an obligation on the adjoining owner to pay any fees not awarded. So it is, in effect, a contract. The adjoining owner’s surveyor can say his fee is £10,000. The building owner’s surveyor will disagree and award, say, £1,500. The adjoining owner’s surveyor, knowing that his fee is unreasonable, can take comfort in the fact that the adjoining owners will need to settle the remainder of his fee (see Dust v Marioni, Greenaway and MacNulty, 2004).


Summary:

There are lots of honest good surveyors out there. Some of the behaviour outlined in this article is rare, however, much of it is common and these issues affect almost every single party wall scenario. Professional bodies and practitioners must do more to identify poor behaviour, protect the public, and restore faith in an important and valuable profession. There is poor guidance for surveyors who know no different, so that their poor behaviour becomes habit. Professional bodies lack the will to tackle poor behaviour, and the sheer number of professional bodies shows that there is disunity in the industry. This article has had a brief look at some of the poor behaviour afflicting the industry – there are many more examples that could have made this article.


Practitioners need to work together to raise standards. Ideally the professional bodies should lead the way, but in the absence of leadership, practitioners can exchange ideas and provide information to the public to promote trust.

Change can blow through the industry.


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Reference:

Isaac N, (2017) Security for Expenses - What can security cover? Tanfield Chambers.

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