The following article segment by Barbara Anne “B.A.” Spignardo originally appeared in the September/October issue of Commercial Investment Real Estate magazine. To read the entire article in the digital edition of the magazine, click here.
Party walls are often seen and taken for granted. Picture row houses and commercial structures sharing walls. Which owner or owners can claim those walls? Although party walls may be quite common, Party Wall Agreements are unusual.
Often owners do not consider the party wall until a problem occurs. When an issue with a shared wall arises, the result suddenly becomes complicated, without an agreement outlining the responsibilities and obligations of the two owners.
A Party Wall Agreement provides clarification about the ownership and maintenance obligations for the shared wall. The focus is to prevent and avoid disputes before a problem with a party wall, which affects the adjacent owners.
A Party Wall Agreement between adjacent owners is a useful, effective tool in understanding the agreements and restrictions relating to the common wall. These Agreements define which party bears the obligation for the cost of maintaining the common wall, as well as the repercussions if the wall is not maintained.
Establishing Ground Rules
Consenting to a Party Wall Agreement prior to possible disputes benefits the owners. In a recent transaction, the attorneys requested an estoppel certificate relating to the Party Wall Agreement, provided by the adjacent owner, confirming no known defaults under the Party Wall Agreement or possible claims relating thereto, at the time of closing, which was received in time for closing. Those involved in the deal understood the rights, obligations, and the validity of the Party Wall Agreement.
The complete article can be found on page 18 of the digital edition of the September/October issue of Commercial Investment Real Estate magazine.