Property Surveying Blog
Here at Berry Lodge we deal with numerous Party Wall Agreements each month, one of the most common elements we see is enclosure costs.
Enclosure costs arise when a Building Owner uses or encloses upon a wall that was previously built by the Adjoining Owner.
This blog post aims to provide transparency to the determination, measurements and valuations behind enclosure costs.
What is an enclosure cost?
An enclosure cost is a payment to be made from the Building Owner directly to the Adjoining Owner as per the requirements of Section 11(11) of the Party Wall etc Act 1996.
The cost applies when a Building Owner makes use of a Party Wall that an Adjoining Owner has previously built.
Why the payment is due
The logic behind the payment is that as the wall was previously constructed and paid for by the Adjoining Owner, or their predecessors, if the Building Owner would like to use it to form the flank wall of their proposed extension, then they will need to pay 50% of the build cost of the wall at today’s rates.
In doing this the Building Owner is paying their equal share of the construction cost of the wall.
Our view here at Berry Lodge is that the enclosure payment should be viewed as a saving rather than a cost, as it saves the Building Owner having to pay to construct an entire wall, instead they only paying for half of the cost.
So really it’s a saving of 50% rather than an extra cost of 50%!
How is an enclosure cost calculated?
The cost of the enclosure is based on the area of wall that is to be used by the Building Owner, therefore the higher the area, the higher the cost.
Below we will run through how we complete our enclosure cost calculations in a step by step guide.
Step 1: Drawing Review
Firstly, before we go to site we would have reviewed both the existing and proposed plans thereby allowing us to determine whether or not there is the potential for an enclosure cost.
Above you can see both the existing and proposed drawings, thereby clarifying that an enclosure is indeed due.
Above you can see the area of the wall that is actually being enclosed upon.
Step 2: Site Visit
Once we have confirmation of the enclosure, we would carry out the Schedule of Condition Report of the Adjoining Owner’s property. At that time, we will also be able to get a feel for the size of the enclosure and determine whether or not there is a Party Wall that can be enclosed upon.
Step 3: Scaling the Plans
Once we get back to the office we would then overlay the existing and proposed plans at A3 size, thereby determining the exact area that is being enclosed upon. to get a feel of the size of the area to be enclosed upon.
Sometimes these areas are an unusual shape, however we try to divide them into more regularised shapes such as triangles, squares or rectangles to make the area easier to work out using simple formulas. Although, we do have to get our thinking caps on and scientific calculators out for more complex shapes!
We would then measure the dimensions of the shapes using a scale rule at the correct scale for example; 1:50 at A3 or 1:100 at A1.
Now that we have the dimensions of the shapes, we determine the areas and add them together thereby giving us an exact and combined area of enclosure.
Above you can see the actual area of wall that the building owner intends to enclose upon.
Above you can see the area of enclosure separated into different areas so that we can arrive at a precise total area.
Step 4: Determining the Enclosure Cost
There are a number of different ways to determine the enclosure costs, here at Berry Lodge we use the Building Cost Information Service (BCIS) rates.
This ensures we have an accurate and comprehensive cost of constructing the wall at today’s rates and also ensures that the cost is impartial.
An enclosure payment takes into account everything from material costs, to the mortar in the joints, the brickwork, the labour for construction of the wall, the foundations and even the insulation.
The final cost also takes into account non visible costs, such as professional fees, Value Added Tax (VAT) paid on materials and the location specific rates of the property.
Above you can see our workings!