When used in the context of Section 12 of the Party Wall etc. Act 1996, it applies only when a building owner wants to carry out work that must be notified to an adjoining owner under the Act.
Before any such work is started the adjoining owner may require the building owner to give security for any expenses that the adjoining owner might incur because of the works. In exceptional circumstances, the building owner may require the adjoining owner to give security for the cost of additional work included at the request of the adjoining owner or if the adjoining owner is responsible for part of the cost of works to a party structure.
A request for security for expenses must be made in writing before work starts.
Every case is different and there are many possible alternatives but in most cases the matter will proceed as follows:
The adjoining owner gives written notice under Section 12 of the Act requiring security for expenses;
- The owners or the surveyors appointed under the Act agree the amount to be provided as security and in what form;
- Before the work starts the person giving security for expenses deposits the agreed sum with us;
- When the work is complete the surveyors direct us to release the money back or to pay some or all of it to the other party and then release the balance;
- The money is released as directed and the account is closed.
The Act sets out a detailed procedure for the appointment of surveyors to resolve actual or technical disputes between the parties and any dispute over the release of money held as security will be resolved by the surveyors at a statutory tribunal.
Our role is simply to hold the security and to release it as directed by the parties or, in the event of dispute, the surveyors exercising their statutory authority under the Act.
You can download a detailed analysis, written by Michael Rust of Security for Expenses Ltd., of how security for expenses has developed under the Act here.