Section 12 of the act allows for an adjoining owner to require security for expenses which protects an adjoining owner should the Building Owner become insolvent or abandon the works. Security used to placed in an escrow account, however PIB Insurance brokers have come to the fore and now provide an unique security for expenses insurance. The most important assistance to the building owner is that large sums of money are no longer tied up in an escrow account and the cashflow of the project is not affected.
Kay v Lawrence – security for expenses – expenses are not compensatory damages whereby the Building Owner must put an adjoining owner in a position they would have been before the damage occurred but a choice to take financial compensation – If the expense is a certainty it can be managed by insurances, and surety bonds or of course by a payment into an escrow account. However if it is not certain it may not exist.
Bruce Spenser MSc MCIOB, Party Wall Surveyor London | Building Surveyor London | Third Surveyor | Party Wall Surveyor Ramsgate, Broadstairs, Margate and Thanet
London, Ramsgate, Broadstairs, Margate, Thanet
20 Royal Road, Ramsgate, CT11 9LE