Security for expenses is an important but often overlooked protection under Section 12 of the Party Wall etc. Act 1996. It gives an adjoining owner the right, in certain circumstances, to ask that money be set aside before works begin, so that they are not left exposed if a project stalls or a building owner cannot meet the cost of making good.
What Security for Expenses Means
Section 12 allows an adjoining owner to request that the building owner provide security, usually a sum of money held in a designated account, to cover the cost of works that affect the adjoining property. The purpose is to protect the neighbour against the risk that works are started and then abandoned, or that the building owner becomes unable to pay for reinstatement, leaving the adjoining property in a vulnerable state.
Equally, a building owner may request security from an adjoining owner where the adjoining owner has required additional works to be carried out for their benefit, for example through a counter-notice. The provision therefore works both ways, though in practice it is most often invoked by adjoining owners.
When It Applies
Security for expenses is not automatic; it must be requested, and the amount is determined by the surveyors and recorded in the party wall award. It is most commonly considered where the works carry a higher risk to the neighbouring property, such as:
- Basement excavations and deep digs engaging the 3 and 6 metre rule
- Large or structurally significant projects
- Works where the building owner is a company or developer rather than a resident
- Situations where there is genuine concern about the works being left incomplete
| Factor | Relevance to security |
|---|---|
| Depth and scale of works | Deeper, larger works raise the potential reinstatement cost |
| Nature of the building owner | Developer-led schemes may warrant greater protection |
| Risk of abandonment | Security guards against works left part-finished |
Typical Use in Basement and Large Projects
Security for expenses is most frequently discussed in the context of basement construction, where excavation beneath or beside a neighbour’s property carries a meaningful risk if works are interrupted. In such cases the surveyors may agree a sum that reflects the likely cost of making the adjoining property safe should the project not be completed. The amount must be reasonable and proportionate to the actual risk, not a punitive figure. Where the works are completed properly, the security is released. This safeguard complements the schedule of condition recorded before works begin, and adjoining owners can find broader guidance on their rights on our adjoining owners page.
How It Is Arranged
The request for security is made through the party wall process and dealt with by the appointed or agreed surveyors as part of the dispute resolution under the Act. The surveyors assess what, if any, security is appropriate, fix the amount, and set out in the award how and when it is to be provided and released.
FAQs
Can any neighbour demand security for expenses?
An adjoining owner can request it, but it is not granted automatically. The surveyors decide whether security is justified and, if so, in what amount, based on the risk the particular works present.
Does security for expenses apply to a simple loft conversion?
It is uncommon for modest works such as a straightforward loft conversion. Security is far more likely to be considered for basements and large structural projects where the potential reinstatement cost is significant.
Is the money kept forever?
No. Security is held only until the relevant works are satisfactorily completed, after which it is released to the building owner in accordance with the terms of the award.
If you are an adjoining owner concerned about a major project next door, or a building owner planning a basement anywhere in London, our RICS-accredited surveyors can advise on security for expenses. Contact us for tailored guidance.