Chris BeltonBy Chris Belton|September 1, 2023|In Party Wall Advice

The Party Wall Act can take people by surprise when they discover they need to pay their neighbour for using existing structures. These payments are known as “enclosure costs.” In this straightforward guide, we’ll explain what enclosure costs are all about, when they apply, and how they are calculated.

Introduction

Section 11(11) of the Party Wall etc. Act 1996 introduces the concept of ‘enclosure costs.’ These are payments that a building owner must make to their neighbour when they plan to use work that was previously done at the neighbour’s expense. Two common examples where they will likely apply include:

  1. When you want to build an extension and enclose on an existing wall built by the neighbour to become part of the new extension’s structure.
  2. When you want to create a loft conversion and will subsequently make use of a wall that was raised by your neighbour when they carried out their own loft conversion.
Party Wall Enclosure Costs

How are enclosed costs claculated

When a building owner utilises construction work that their neighbour previously paid for, they must pay a fair share of the costs for the work they’re subsequently making use of. Typically, this is half of what it would cost to build the wall today. For instance, if a wall cost £100 to build in 1900 and would cost £10,000 today, the building owner owes the neighbour £5,000 for making use of the wall. This calculation considers current construction costs and includes materials, labour, fees, and any other relevant expenses.

Who is entitled to receive payment for enclosure costs?

It’s essential to note that the current adjoining owner is entitled to payment, regardless of when the wall was originally built. This remains true even if the current owner had no part in the wall’s construction or funding.

How are enclosure costs paid?

Surveyors appointed for the project will calculate the payment amount, which will be detailed in a party wall award. The building owner must then directly compensate the adjoining owner for this established sum. Typically, payment is made via bank transfer, although specific preferences will be confirmed by the adjoining owner. Payment is usually due when the wall is enclosed upon, but the timing can be determined differently by the surveyors and will be specified in the award.

Conclusion

Enclosure costs can be a complex and potentially contentious aspect of the Party Wall Act. It’s crucial to rely on experienced party wall surveyors for accurate calculations and guidance. At Archway Party Wall Surveyors, we specialise in handling enclosure costs and can provide expert advice and representation to help resolve such matters.

If you are undertaking works which may involve the Party Wall Act, why not contact Archway Party Walls for free impartial advice.

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