Why is my neighbour’s Party Wall Surveyor’s fee more expensive than mine?

Surveyor’s fees vary hugely, and generally an Adjoining Owner’s Surveyor will charge more than the Building Owner’s. Before looking at why this happens, be sure to check that the ‘Agreed Surveyor’ route was exhausted, and that you are not needlessly paying two sets of Surveyor’s fees. The low uptake of the ‘Agreed Surveyor’ route is one of the biggest failings of the application of the Party Wall Act, and the status quo suits Party Wall Surveyors, who collectively will earn more if the public pays for the two-Surveyor route. Surveyors should mandatorily offer the Agreed Surveyor route, at least making their respective appointing owners aware that there is a cheaper alternative to having disputes resolved.

If the Agreed Surveyor route is not agreeable, then two Surveyors are required to serve the Party Wall Award. The Building Owner’s Surveyor is often cheaper than the Adjoining Owner’s Surveyor, and this article looks at some of the reasons.

Competition

Very recently, I served an Award with a well-known Surveying practice that charged ￡1,600 plus VAT when appointed as the Adjoining Owner’s Surveyor for a loft build. The process took about 6 weeks. Their fee included a further visit, but when damage was alleged, they wanted to charge an additional ￡600 plus VAT for the site visit. Luckily for the Building Owner, I reminded all parties that the further site visit was included within the Award, but the point I make, is that the price was ￡600 plus VAT for one site visit. A couple of weeks later, a prospective appointing owner had informed me that they were comparing prices for a loft build, and stated that the same company had quoted them ￡675 plus VAT to act as the Building Owner’s Surveyor. The turnround they said was 48 hours. Their duties would have included:

1.      Serving a notice

2.      Attending site and undertaking a schedule of condition

3.      Agreeing the terms of the Award

4.      Undertaking a further inspection

The company is offering much better value to one person when compared with another but this inconsistency largely goes unnoticed.

The difference in prices is not known to the public, but was clearly known to me as I work in the industry and know what different companies charge. It can be harder to obtain details of a Building Owner’s Surveyor’s fees when you are a rival Surveyor, and the public often won’t be aware of the fee differences within the same company. The public though are far more aware of fee differences between companies, though this can be a false illusion, as in the case above, where one client will perceive them to be excellent value, whilst another will see them as a rip off. Both are true.

Building Owner’s Surveyor’s fees are often lower due to competition. Put frankly, prospective clients can shop around, and many companies will compete to attract business. All sorts of things can be done to lower fees, from embracing technology to reducing profit margins on a job. Sometimes however, a low price simply means a rubbish service as companies can rely on high volume, and as many people are aware, there is a trade-off between price vs quality vs time. Many people wishing to appoint a Surveyor, particularly a Building Owner footing the bill, will choose the cheapest Surveyor who will get the Award served quickest. The Adjoining Owner however, clearly wants a Surveyor who will protect their interests and ensure that their neighbour’s build is undertaken in a way that reduces inconvenience. This can create a friction between the Surveyors, where the cheap and quick Surveyor blames the more thorough Surveyor for any delays.

The Adjoining Owner’s Surveyor does not compete on price. They can charge more, and this often does not correlate with time spent. I have had Adjoining Owner’s Surveyors charge a simple ￡1,000 plus VAT with no comments on an Award.

There is a sense of entitlement to money with little justification for actions. A fee has to be ‘reasonable’, however it can be difficult to determine what is reasonable as so many people have different ideas as to what this is. There is the fall-back of the Third Surveyor who can adjudicate on fees, but seasoned Surveyors know how to get away with charging inflated fees, and barring any obvious examples of unfair fees, the status quo of high fees remains. In many ways, the higher a Surveyor’s fees, the easier it is to be successful in a Third Surveyor referral.

Given that the Building Owner’s Surveyor’s fee is often artificially low, the Adjoining Owner’s Surveyor’s fee will look like it is artificially high. A Surveyor competing on price should warn his appointing owner that his fee is low. This will reduce friction later on and better manage expectations. A Surveyor competing for business will most likely fix his fee, whilst an Adjoining Owner’s Surveyor will most likely charge by the hour. This leads us to the next point, which is the conflict between party appointed Surveyors pushing different agendas.

Price and Time vs Quality

I have touched on this already but will explain this further. The Building Owner’s Surveyor will often charge less and promise a quick and easy resolution. There is pressure to deliver Party Wall Awards competitively, which in the eyes of the public means quickly and cheaply. This can be at the expense of quality – which is often the main aim of the Adjoining Owner’s Surveyor.

Measuring quality can actually be a difficult thing to achieve as Awards are appealed all the time, and to be frank, many will contain mistakes – there seems to be little correlation between expensive and experienced Surveyors, and quality. Case law often involves mistakes from some of the leading Surveyors in the industry who charge high fees and hold great respect (see Property Supply and Development Ltd v Verity). The same can be said of professional bodies and accreditation – there has been many a Chartered Surveyor on the wrong side of a judgement, whilst the Verity case is concerned with various high-ranking members of The Faculty of Party Wall Surveyors. All of this can simply blur good practice and greed.

There is many an Adjoining Owner Surveyor who will overcharge. From the ambulance chasers who simply want the cash, to the overzealous Surveyors ‘making a three-course banquet out of what should have been a snack’ (see Dust v Marioni Greenaway and MacNulty), there is an understandable suspicion whenever an Adjoining Owner’s Surveyor’s fee is higher than the Building Owner’s.

Sometimes however, the high fee is completely justifiable. The cheap Building Owner’s Surveyor simply sends over loads of drawings and a RICS template Award and it is simply left to the Adjoining Owner’s Surveyor to handle matters. Reasonable requests for information can be rebuffed, ignored or criticised, because it goes against the Building Owner’s objectives of dealing with matters quickly and cheaply. Very few Surveyor’s report back to their appointing owner that a lack of information can lead to higher fees. Very few Building Owners are warned of the repercussions of half-heartedly responding to requests for information such as section drawings and method statements. The friction that the clash of these objectives creates is very adversarial and is the source of fee disputes at the end of the process. This can lead to poor behaviour all round, with Adjoining Owner’s Surveyors improperly withholding the signing of an Award until paid.

Summary

The industry would do well to better educate the public as to why fees vary. The Third Surveyor can adjudicate on excessive fees, though in reality, this will only work where fees are very excessive. A Surveyor charging ￡5,000 plus VAT for a loft Award will find it very hard to justify his fee. A Surveyor charging ￡1,500 plus VAT but doing next to no work will find it much easier, and the risk of challenging such a Surveyor would make it not worth it. Surveyors know how to push fees to the point where being expensive does not mean being unreasonable.

Competition can lead to a ‘race to the bottom’ where quality is sacrificed. A lower Building Owner’s Surveyor’s fee can often lead to a higher Adjoining Owner’s Surveyor’s fee as the business model of low prices and quick turnaround can rely on the Adjoining Owner’s Surveyor doing most of the work.

The Act attempts to regulate quality as it compels Surveyors to act ‘effectively’, though this is subjective, and where one Surveyor sees overzealousness, another sees laziness. One thing both Surveyors will see however, is greed. One business model will promote low fees with high volumes of work, whilst another will have high fees with low volume. It is easy to see why both business models clash and how the blame culture that is rife has come about.

In terms of solutions, better public awareness is required to ensure an understanding of how the industry works. Management of expectations should be encouraged. Whilst there are plenty of Party Wall guides, very few actually determine or define reasonable requests and reasonable fees. The lack of any real commentary leads to confusion and general discord regarding fees. Professional bodies are silent and Surveyors will generally not wish to reveal the reasons for fee variation. The truth is, many Surveyors go cheap to encourage business, whilst many Adjoining Owner’s Surveyors know they can get away with charging more as their fee is not subject to competition and regulation – save for a Third Surveyor referral. A referral is not great, as it is simply paying more money to Surveyors to determine whether their fees are ok, and this self-regulated set-up is hardly motivated to drive down fees.

As a last point, the Agreed Surveyor route should always be offered and considered by all parties involved, as the Act intended that disputes be settle in this way. Too often, this route is bypassed and not enough information is given to the parties to make an informed decision. This leads to a two-Surveyor set-up with two sets of Surveyor’s fees which is absolutely great for Party Wall Surveyors. It isn’t so great for the paying public.