Where historical work falling under the jurisdiction of the Party Wall etc. Act 1996 has been conducted it is vital for those conducting a conveyance of residential property to have sight of, and regards to, statutory Notices and either Consents or determined Party Wall Awards in order to effect a smooth and efficient conveyance of land and property.
What is the position however where there is no Award or statutory documentation in place? What difficulties arise? And if difficulties arise how are they to be dealt with by solicitors or licenced conveyancers in transfers of land and property.
In the Law Society’s conveyancing protocol it is a requirement for practitioners to share information, subject to client confidentiality, to ensure efficient management of the property transaction. The process requires transparency in order to recognise the value of an efficient process and the practice of using authorised forms to achieve this process is essential to the good management of cases. It is a modern feature of conveyancing practice for both solicitors and licenced conveyancers that greater consumer awareness means that errors in conveyancing transactions can be a fertile ground for complaints and negligence claims.
When buying a property the onus if on the buyer to satisfy themselves that there are no outstanding issues with the property. The use of the phrase ‘caveat emptor’ or ‘buyer beware’ is still the legal
basis on which the sale and purchase of a home takes place. The emphasis is on the buyer therefore, and his/her advisers, to investigate outstanding issues before the exchange of contracts to purchase.
The seller’s responsibility, if they choose to provide information, is to provide complete and accurate information else the buyer may refuse to complete the purchase or even claim compensation from them.
Surveyors will of course be familiar with the physical inspection as a part of this process that leads through to what hopefully would be a successful purchase for a potential buyer. A survey may elicit the fact that works have been undertaken to a party wall, a loft conversion has been executed or that a neighbouring property has had a basement excavated. These may be noted within the survey report.
Equally, within this process, and on their own part legal practitioners will make enquires of the seller. The most obvious procedural example being the use of the form ‘TA6’, requiring the seller to respond to enquiries set out by the purchaser. Interestingly, the Law Society, in its consultation paper of 19 April 2012, recorded the fact that buyers need not respond to enquiries. It would however, at the least, raise suspicions if such answers were not provided, causing either the sale to fail, falter or require the solicitor or conveyancer to take specific instructions from the lender as to whether they were prepared to proceed in such circumstances.
The Faculty of Party Wall Surveyors, PO Box 86, Rye, East Sussex, TN31 9BN Tel: 01424 883300 Web: http://www.fpws.org.uk E-mail: enq@fpws.org.uk
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Party Wall Surveyor
Winter 2017
Form TA6, or its other equivalents in use such as Con29 (Oyez), raise queries and questions amongst other things as to works undertaken by a seller, notices received and confirmations of works undertaken.
Additionally, there are questions as to boundaries and their features, party wall notices and works carried out pursuant to the same, as well as disputes and complaints over the property or another property nearby and/or any knowledge as to a matter that might lead to a dispute on that property or nearby. There are also questions directed to alterations, planning and building control (for example loft or garage conversion). The seller is also required to reveal any breaches of planning permission or work that does not have all necessary consents.
In the context of the Act it is therefore incumbent upon a seller being a Building Owner, or even an Adjoining Owner to reveal what they know in so far as they are asked. Where a relevant party had either (i) conducted notifiable works pursuant to Notice or an Award, or (ii) conducted notifiable works without serving such Notice and having an Award in place, then in both circumstances the seller would be required to reveal the same information upon a sale of their property to any prospective buyer asking the same. This may well apply equally to a person who is considered to be an ‘Adjoining Owner’ for the purposes of the Act as well as someone considered to be a ‘Building Owner’; catching unexpectedly a person whose neighbour may well have conducted notifiable works under the Act where that neighbour had failed to serve Notice, and/or therefore had failed to obtain Consent or an Award.
In the case where the Act had been followed meticulously the sale of the property is likely to take a much more smoother path (assuming there is no ongoing dispute) for transactional purposes, especially where Notices, Consent(s) forms or Awards are disclosed to the purchaser’s legal advisers at an early stage. However, it is the latter example, where such documentation is missing, where problems may arise for both seller and buyer.
The problems are therefore apparent for both seller and buyer, and it is a problem or complication
shared. Upon completion of the required and requested information (often a ‘TR6’) both parties may face either delay, the seller a reduction in price based upon an element of ‘risk’ or the prospect of a purchaser pulling out of the transaction.
The uncertainty for a party wishing to buy is that they may face having before them a potential or ongoing dispute, the purchase of a property with no formalised paperwork in place (and this can be said for both works conducted at the subject property and works conducted at an adjoining or nearby property also), an issue as to potential latent damage, issues as to ‘retrospective’ Awards as a matter of record, delay in the conveyancing, withdrawal or difficulty with a potential mortgage or funding. These further costs may, ironically, be offset by the buyer demanding a discount.
The importance of having lawful Party Wall documentation in place is therefore paramount, and should be in the minds of those assisting and advising both sellers and buyers. In addition, mortgagors should also be advised as to the position in order to make an informed decision as to funding the purchase. The ability to produce, and in relation to purchasers to view and consider, such documentation should ensure a smooth conveyancing procedure and an efficient sale and purchase of property and land.
Those avoiding the responsibility of having proper paperwork in place are likely to find themselves in some difficulty when a decision is made as to the sale and conveyance of such property. As purchasers, and lawyers, become more alert to the issue of a party wall dispute arising or having arisen, the purchasers or their conveyancing professionals will be well advised to require statutory documentation and information that such disputes have been dealt with in an appropriate manner.
If there is no such statutory documentation, in the form of Notice, Consents or an Award in place purchasers will be, or should be, that much more cautious in any property transaction. This may well result in delay, added costs, or at worst a transaction not proceeding. A mortgage provider may also well be within their rights to pull out if concerns are noted.
In turn buyers may require a discount, in order to negate any potential future risk, or there may have to be guarantees, insurances or an indemnity provided. Protection may be given in the form of a Deed providing financial or other protection for the party purchasing in the event of a future catastrophic issue, such as a basement collapse or issue as to latent damage in a loft conversion. It is therefore the case that where the Act is avoided one who wishes to sell and who would have been considered as a ‘Building Owner’ may well find themselves in difficulty, and at some expense, further down the line when they come to sell a home or property that they own. Somewhat unfortunately, this may also potentially catch an ‘Adjoining Owner’ who knew of works upon a party wall, or who had knowledge of a basement, or other, excavation and who failed to insist on their own rights and safeguards under the Act.
Shaw Kelly
Barrister at Staple Inn Chambers