Potential Pitfalls of Digging Deep

Subterranean excavations may be an increasingly popular method of extending a property, but such developments also carry potential pitfalls.

Planning controls do not usually apply to a development that does not affect the external appearance of a property, but means of redress still exist for neighbours who are adversely affected by basement excavation works, whether by the noise, vibrations or dust while the works are being carried out, or by resulting structural damage to their property.

The creation of a new basement is likely to involve works that will fall within the The Party Wall etc Act 1996 (“the PWA”). While this means the building owner has the right to carry out such works, it also means the building owner is burdened by the obligations the PWA imposes.

Under section 6 of the PWA, the building owner must serve notice detailing the works on the adjoining owner. Such notice will also specify whether the building owner proposes to underpin or otherwise strengthen or safeguard the foundations of the building of the adjoining owner. Often a party structure notice under section 3 will also be required. If the adjoining owner does not agree to the works, or fails to serve a counter-notice within the statutory period, a dispute will be deemed to have arisen and surveyors will need to be appointed under the dispute resolution procedure in section 10 to make a party wall award. This will determine what, how and when the PWA works are to be undertaken and specify the procedures and obligations to protect both parties from potential damage or claims.

A building owner who does not serve the required notice may find himself faced with an injunction obtained by the adjoining owner that prevents the works from continuing. A court will usually grant an injunction in favour of the adjoining owner in such circumstances.

If the works have already been completed an injunction is unlikely to be an appropriate course of action, but an adjoining owner may still seek compensation through court proceedings in a claim for nuisance and trespass.

Aside from the notification requirements, the PWA sets out further obligations on the building owner. Section 7(1) requires the works to be carried out without causing “unnecessary inconvenience” to an adjoining owner or occupier. Section 7(2) requires the building owner to compensate adjoining owners or occupiers for any damage or loss as a result of any work executed in pursuance of the PWA.

Section 7(2) is defined broadly and it has been held that, in principle, it also includes compensation for an adjoining owner’s loss of earnings. This was decided in the case of Kelliher v Ash Estates Ltd and Norman Developments Ltd, a Central London County Court decision, which, while non-binding, provides useful judicial insight in an area that has little modern authority.

A claim for loss of earnings in Kelliher was made by the adjoining owner on the basis that her recovery from an illness was protracted as a result of the disturbance and delay caused by the basement excavation works. However, far greater loss of earnings can be envisaged from an adjoining owner who works from home and whose employment or business is affected.

It is worth noting that no time limit is specified in the PWA for an adjoining owner to claim compensation. A building owner could therefore find himself liable some years after the works are completed, if that happens to be when damage is identified.

Such “late” claims for compensation may be able to be dealt with by the appointed surveyor, if one was appointed to make a party wall award at the outset of the works.

Even in the absence of an award (such as where an adjoining owner consented to the works in the building owner’s notice), the section 10 dispute resolution procedure can be invoked for a surveyor to make an award (Onigbanjo v Pearson [2008] BLR 507).

A building owner who intends to embark upon a basement excavation must consider the potential application of the PWA, and, if applicable, ensure compliance with its requirements.

The broad obligation to compensate under section 7(2) means that a building owner may want to consider consulting with the adjoining owner at the outset to ascertain if any circumstances exist, such as an adjoining owner who works from home, which could result in compensation beyond what a building owner would ordinarily expect.

A building owner must similarly take great care with works that fall outside of the PWA, as common law claims from affected neighbours are a real risk.

It should be noted that an excavation to create a new basement which extends beyond the original footprint of the building, creates a new separate unit of accommodation and/or alters the external appearance of the house (for example by adding a light-well), or if the building is listed, will require consent from the local planning authority. However, as subterranean excavations often prove contentious it is recommended that a pre-application enquiry is submitted before any works are undertaken even where the proposed works appear to fall within ‘permitted development’.

This article was written by Dagmara Selwyn-Kuczera, Senior Solicitor, Real Estate, with assistance from Trainee Solicitor Arya Hussain.

This guide is for general information and interest only and should not be relied upon as providing specific legal advice. If you require any further information about the issues raised in this article please contact Dagmara Selwyn-Kuczera or your usual Goodman Derrick contact.