How much of your work these days is to do with party walls?
15-20 years ago, it was a small part of our business. Now it's roughly about 22, 23%. We do a lot of licences to alter and we still do a lot of construction work. We deal with dilapidations. So we do most things that building surveyors do. We’ve dealt with Party Wall matters for a long time but I’ve specialised to a greater degree over the last 10, 12 years.
[As just one example, Murray Birrell is acting for neighbours adjoining the house in Kensington that got quite a bit of media coverage after the owner had it painted in red and white stripes. It was then boarded up and work includes excavating a basement for a swimming pool.]
What is the payment process for party wall work?
A Party wall matter, whether it involves an existing structure, erection of a new boundary structure ('line of junction works') or excavations which have the potential to interfere with the stability of an adjacent building or structure ('adjacent excavations'), begins with the property owner who wants to undertake the work (the 'building owner'), serving an originating notice to an adjoining owner whose property may be affected by it.
If not consented, the two parties will usually each appoint a surveyor and the two surveyors will publish a joint award to regulate the conduct of the works. It used to be the case that legally, the adjoining owner’s surveyor’s fees would be paid by the building owner to the adjoining owner, who would pass them on. In the past, if the building owner decided he didn't want to pay them there could be complications for the surveyor to get paid since a direct debt didn’t exist between the building owner and the surveyor representing the adjoining neighbour. The debt would have to be transferred for the surveyor to pursue the fee.
Since the Farrs Lane case ruling in 2015, you can state that the building owner will pay the adjoining owner's party wall fees direct to the surveyor (or whoever else may have been involved), so non-payment is a simple debt and you can pursue it if it's not appealed.
However, complications can still arise if the adjoining neighbour’s surveyor asks for additional payment for work that the building owner or their surveyor doesn’t agree was relevant or necessary - “works technically in pursuance of the Party Wall etc Act 1996.” Side agreements with the adjoining neighbour to charge for work outside the Act, separately are becoming more common to cover these eventualities to avoid confrontation later on.
What are reasonable fees for party wall work?
This is a much more difficult question to answer and it does depend on the type of work you’re doing. Obviously where in the country you’re working makes a difference as well. The fees have not just got to be correct in, for example: “I spent this amount of hours and that’s my hourly rate and that’s what it is.” I think they have to feel right.
But on a wider picture as to what is a reasonable hourly rate, the government - in their wisdom - got rid of scale fees. So there are people who treat it as what they can get away with.
I believe if you’re going to charge an ‘enhanced’ hourly rate, you’ve got to add value. It’s wrong to charge say £250 an hour and then work like an assistant would for £120. You should do it quicker; you should add value so it balances out. I’m not sure everybody does that.
Let’s consider you’re working for an adjoining neighbour and the building owner’s surveyor is very slow coming back to you. There’s a problem when he comes back to you after three or four weeks because you’ve been working on other jobs and you have to reacquaint yourself with the files. I guess you need to charge for that?
Yes, of course you do. It usually happens when you ask for some reasonable information that’s not available and it takes weeks when it should have taken days because the building owner is not in a rush. You have to accept that’s going to happen, and it’s reasonable to charge.
Though what really irritates me is when you get a building owner’s surveyor who’s working on a fixed fee with no definition of their roles. There is a general acceptance of what a building owner’s surveyor and an adjoining owner’s surveyor do as part of the process, but there’s nothing written down that says the building owner will take the schedule of condition, adjoining owner will check it, all those things... So sometimes they’re getting a fixed fee and want to get away with doing next to nothing.
So then in order to meet deadlines the adjoining owners surveyor ends up doing a lot of work that you would normally expect the building owner’s surveyor to do. It’s wrong and it’s what’s wrong with fixed fees. If you’re going to quote a fixed fee, you’ve got to do the job. You can’t get a fixed fee and then tailor how much time you spend depending on what you’re charging. That is becoming more commonplace and it’s worrying. It would be nice if we could define who does what. But I’m not sure that you really could as you’re both part of a tribunal, you are working together supposedly.
Are more and more people offering fixed fees for building owner work?
Yes, there seem to be, especially on domestic work. If you’re building a small extension and you get caught up in the Party Wall Act you want to control your costs. People are putting in fixed fees. There’s nothing wrong with it, it’s completely a commercial decision. If you’re running a business, you choose to do it. Having done it, you just have to accept you’ve still got to do the job. You can’t go in low and then expect the Adjoining Owners surveyor to do your job. It’s not correct, but it’s happening more and more.
There’s downward pressure on fees. There’s no restriction on who can be a party wall surveyor. Anybody apart from the owner himself can be a party wall surveyor. There’s no definition, criteria or anything. As more and more people become involved, you're getting people who are not experienced and just there as a way to make an easy buck. I think it’s going to become a bigger problem. We need to find a way of defining what is a competent party wall surveyor and someone who possibly isn’t.
The big developers will use the people they want to because there is value in getting things sorted out properly and quickly, as opposed to saving a few hundred pounds. But I do think downward pressure on fees will continue, no question about it at all.
Having said that, I think it will still be profitable business for Murray Birrell and there’s always going to be room for people who are competent. There’s a premium to be charged for somebody who’s good.