Making use and enclosure costs are formally dealt with under Section 11(11) of the Party Wall etc Act 1996.
Where use is subsequently made by the adjoining owner of work carried out solely at the expense of the building owner the adjoining owner shall pay a due proportion of the expenses incurred by the building owner in carrying out that work; and for this purpose he shall be taken to have incurred expenses calculated by reference to what the cost of the work would be if it were carried out at the time when that subsequent use is made.
https://www.legislation.gov.uk/ukpga/1996/40/section/11
The Act sets out that one owner, must pay another owner, a sum of money to take into account the making use of a previously-built wall that forms part of the neighbouring owner’s extension.
As the owner who borders this extension will now be planning to undertake their own construction works, which will encompass and use that wall, they will need to reimburse their neighbour for 50% of the wall’s cost.
Making use payment applies to, loft conversions, rear extension and basements. However, it will only apply to walls that have been built astride the boundary line, or in other words half on the land of each owner’s property.
The agreed making use amount will either be paid by one owner to the other, or can often form part of a Party Wall Award’s wording.
Making use or enclosure payments are made up of the following:
- Excavation for the planned foundation to any extension wall or basement conversion.
- Removal and carting away the excavated from site.
- Concrete required to fill the foundations for the flank extension wall or basement conversion.
- Brickwork or blockwork costs to build the wall. This will include the material costs, labour costs, wall ties, and insulation.
It is important to bear in mind that a making use payment should be looked at as a saving as opposed to a cost.
Ultimately by the neighbouring owner having built the flank wall of their extension in the past, the owner who is now completing the construction works will be able to build directly off that.
This not only results in a lower cost extension their side, but equally it is going to be easier to construct on site, while also resulting in a slightly larger or wider extension.