Blogs
Security of Expenses
Thursday 5th December 2024
Carl O'Boyle BSc MRICS FCIOB MFPWS
Security of expenses, under the Party Wall Act, is essentially a form of financial protection for the adjoining owner (the neighbour who might be affected by construction work). When someone plans to undertake construction work that affects a shared wall or boundary, the adjoining worker can request that the person doing the work provides a sum of money upfront. This money acts as a security deposit to cover any potential damage or issues that might arise due to the construction work.
Here is a simple breakdown:
Purpose: The main idea is to ensure that there are funds available if the work leads to damages, or if the project is left incomplete, leaving the adjoining property in a compromised state.
Requesting Security: The adjoining owner can formally request his security as part of the party wall agreement process. The amount and details of how this security will be held and potentially used are usually negotiated and specified in the party wall award.
Using the funds: If there are damages, or if remedial work is needed and the party carrying out the work fails to address these issues, the funds can be used to make necessary repairs. This helps protect the adjoining owner from having to pay out of pocket for any impacts caused by their neighbour's construction activities.
Resolution: Ideally, if the work is completed satisfactorily without damage, the security is returned to the party who provided it. If there are disputes about damages or the adequacy of repairs, these might need to be resolved through further negotiation or mediation.
This provision helps to foster responsible behaviour and ensures that there are means available to remedy any problems, without leading to lengthy disputes or financial hardship for the neighbours.
