Section 12 – Security for expenses
Party Wall etc. Act 1996
(1) An adjoining owner may serve a notice requiring the building owner before he begins any work in the exercise of the rights conferred by this Act to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.
It was previously thought that security was only avaliable if the building owner was doing works on the adoining owner’s land. This view is incorrect, and security is available to adjoining owners for all work under the Act (Kaye v Lawrence). If security is requested the surveyors cannot refuse it, but they can decide the amount to be awarded (Capital & Leisure Hotels v Independant Estates Plc).
(a) in the exercise of the rights conferred by this Act an adjoining owner requires the building owner to carry out any work the expenses of which are to be defrayed in whole or in part by the adjoining owner; or
(b) an adjoining owner serves a notice on the building owner under subsection (1),
the building owner may before beginning the work to which the requirement or notice relates serve a notice on the adjoining owner requiring him to give such security as may be agreed between the owners or in the event of dispute determined in accordance with section 10.
(3) If within the period of one month beginning with—
(a) the day on which a notice is served under subsection (2); or
(b) in the event of dispute, the date of the determination by the surveyor or surveyors,
the adjoining owner does not comply with the notice or the determination, the requirement or notice by him to which the building owner’s notice under that subsection relates shall cease to have effect.