Security for Expenses

April 1, 2024In Party Wall Advice
April 1, 2024|In Party Wall Advice


In the intricate realm of property development and construction, the Party Wall etc. Act 1996 plays a pivotal role in regulating works that may impact the structural integrity of adjoining properties. One crucial aspect of this Act is Section 12, which empowers an adjoining owner to request security for expenses from a building owner planning works that could compromise their property. In this comprehensive guide, we will delve into the nuances of security for expenses, exploring its purpose, common scenarios, and the intricate process involved in safeguarding the interests of both parties.

Understanding Security for Expenses:

  1. Definition and Purpose:

Security for Expenses involves a building owner depositing a sum of money, typically in an escrow account.

This deposit acts as a financial assurance that, if the building owner fails to complete the planned works, the adjoining owner has funds available to rectify any structural compromise left by unfinished works.

  1. Structural Integrity Concerns:

The primary purpose is to protect the adjoining owner from potential harm to their property resulting from incomplete works.

This is particularly common in situations where basement works and underpinning are involved, as failure to complete such works could compromise the structural integrity of the adjoining property.

Scenarios Requiring Security for Expenses:

  1. Basement Works and Underpinning:

Security for Expenses is prevalent in projects involving basement works and underpinning.

The potential impact on the adjoining property’s foundation makes it imperative to secure funds for remedial action in case of incomplete works.

  1. Requesting Security for Expenses:

Typically initiated by the adjoining owner after receiving a notice from the building owner.

The request is made to ensure financial protection in case the works are not successfully completed.


III.        The Process of Requesting and Resolving Security for Expenses:

  1. Adjoining Owner’s Request:

The adjoining owner, having received a notice, may request security for expenses from the building owner.

This request is prompted by the potential risks associated with the planned works.

  1. Building Owner’s Response:

The building owner may agree to provide Security for Expenses willingly.

If disagreements arise, the matter is escalated to a resolution through party wall surveyors.

  1. Party Wall Award:

In cases of disagreement, party wall surveyors prepare a party wall award.

This award outlines the terms, conditions, and amount of the Security for Expenses, providing a formal resolution to the dispute.

The Complexity of Security for Expenses:

  1. Importance of Experienced Surveyors:

Security for Expenses is a complex area, requiring expertise to navigate effectively.

Appointing experienced surveyors ensures a thorough understanding of the legal and structural aspects involved.

  1. Legal Compliance:

Surveyors play a crucial role in ensuring that the process adheres to the legal framework outlined in the Party Wall Act.

Compliance with regulations is essential for the validity and enforceability of the security for expenses.

Practical Considerations and Best Practices:

  1. Timely Response and Communication:

Building owners should respond promptly to requests for Security for Expenses to avoid disputes.

Open communication between parties fosters understanding and collaboration.

  1. Documentation:

Thorough documentation of agreements, requests, and responses is crucial for future reference and legal compliance.

Clear records contribute to a transparent and regulated process.


Security for Expenses under Section 12 of the Party Wall Act is a critical mechanism to safeguard the interests of both building owners and adjoining owners. Understanding its purpose, the scenarios that trigger its necessity, and the intricate resolution process is vital for a smooth construction journey. By following this comprehensive guide, property owners, and developers can approach Security for Expenses with confidence, ensuring compliance with legal frameworks and fostering positive relationships in the realm of shared property construction.

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