Do I Have to Pay My Neighbour Enclosure Costs When Building Off a Party Wall?

If you’re planning to extend your property or carry out construction work involving a shared or party wall, you may come across the term enclosure costs. Many property owners wonder whether they need to pay their neighbour when they build off a party wall and what the legal requirements are under the Party Wall etc. Act 1996. This guide explains enclosure costs, when they apply, and how to navigate your responsibilities while maintaining good relations with your neighbours.

Understanding Party Walls

A party wall is a shared wall between two properties, commonly found in terraced or semi-detached houses. It can be a wall forming part of a building or a boundary wall that separates two different properties. If you plan to modify, extend, or build off an existing party wall, you may be required to compensate your neighbour for previous contributions to its construction.

What Are Enclosure Costs?

Enclosure costs refer to the amount a property owner must pay their neighbour if they intend to use or build off an existing party wall that was initially constructed by the neighbour at their own expense. This cost is a form of reimbursement for their earlier investment in the structure.

Why Do Enclosure Costs Exist?

To ensure fairness in property improvements.

To prevent one homeowner from benefitting from a party wall without contributing to its initial cost.

To cover the materials, labour, and proportionate expenses of constructing the shared wall.

When Do You Have to Pay Enclosure Costs?

You may be required to pay enclosure costs in the following scenarios:

1. If You Are Building Off a Previously Constructed Party Wall

If your neighbour originally built the party wall entirely at their own cost, and you now intend to use that wall to support a new extension or structure, you must pay a fair share of the cost.

2. If the Party Wall Extends onto Your Land

In cases where the original builder extended the party wall beyond their boundary and onto your land, you may still need to compensate them for the proportionate section that you now wish to use.

3. If the Party Wall Was Not Originally Shared

If your neighbour built a wall adjacent to your property before it became a party wall, and you now wish to use it for your own construction, you may owe enclosure costs.

How Are Enclosure Costs Calculated?

Enclosure costs are usually determined based on:

• The original cost of constructing the wall.

• The proportion of the wall you intend to use.

• The current market value of similar construction work.

A party wall surveyor can assess the reasonable contribution you should pay based on these factors.

The Role of the Party Wall etc. Act 1996

The Party Wall etc. Act 1996 governs disputes and obligations related to party walls in England and Wales. Under this law:

• You must serve a Party Wall Notice to your neighbour before commencing any work that affects a party wall.

• Your neighbour has the right to dispute the works, leading to a formal Party Wall Award process.

• The Act provides a framework for determining and agreeing on enclosure costs fairly.

The Process of Paying Enclosure Costs

If you are required to pay enclosure costs, follow these steps:

1. Confirm Party Wall Ownership and History

Check property records or speak with a party wall surveyor to determine:

Who originally built the wall.

Whether costs were previously agreed upon.

If any legal agreements already exist regarding its use.

2. Serve a Party Wall Notice

Before starting work, you must notify your neighbour with a formal Party Wall Notice stating:

Your proposed plans.

Your intent to use the party wall.

Any potential enclosure costs you may owe.

3. Negotiate with Your Neighbour

Your neighbour may agree to your proposed contribution or dispute the costs. If a dispute arises, party wall surveyors can be appointed to reach a fair decision.

4. Obtain a Party Wall Award

If negotiations fail, a party wall award will be issued outlining:

The enclosure cost amount you must pay.

Any additional conditions or responsibilities.

A timeframe for payment.

5. Make the Payment

Once the amount is agreed upon, payment should be made before construction begins to avoid legal complications.

What If You Refuse to Pay Enclosure Costs?

If you refuse to pay legitimate enclosure costs:

• Your neighbour can take legal action to recover the costs.

• You may be forced to halt your construction until the dispute is resolved.

• You could incur additional legal and surveyor fees.

• It is always advisable to reach an amicable agreement and ensure compliance with the law.

How to Avoid Disputes Over Enclosure Costs

To prevent conflicts and misunderstandings:

• Communicate early with your neighbour before planning construction.

• Hire a professional party wall surveyor to determine fair costs.

• Be transparent about your plans and willingness to pay reasonable expenses.

• Keep records of all agreements and correspondences regarding the party wall.

Are There Situations Where You Don’t Have to Pay?

You may not be required to pay enclosure costs if:

The party wall was jointly funded by both property owners from the beginning.

Your construction does not rely on or affect the existing party wall.

There is an existing agreement that waives enclosure costs.

The neighbour’s wall was built without proper approvals or legal compliance.

If you plan to build off a party wall, understanding enclosure costs is essential. Under the Party Wall etc. Act 1996, you may be required to reimburse your neighbour for a proportionate share of the original construction costs if they built the wall independently. The amount payable is based on fair valuation, often determined by a party wall surveyor.

To avoid disputes, always serve a Party Wall Notice, discuss costs with your neighbour, and seek professional guidance where needed. By following these steps, you can ensure a smooth construction process while maintaining a good relationship with your neighbour.

If you're unsure about your obligations, consulting a party wall expert will help you navigate the process legally and fairly.

For more information you can call Express Party Wall Surveyor at 020 3633 0823 or contact us