Commercial Investment Real Estate September/October 2017 | Page 20

LEGAL
BRIEFS
Peace 2.0
Preserve the harmony between owners sharing a party wall.
n a recent transaction for a lender financing the acquisi-
tion and operation of a commercial real estate property, an
unusual exception to title appeared, which is called a Party
Wall Agreement. A review of the title insurance and property
survey indicated that the acquisition property shares a wall with
the immediately adjacent property.
Party walls often are 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 sud-
denly becomes complicated, without an agreement outlining the
responsibilities and obligations of the two owners.
I
Clarifying Responsibilities
A Party Wall Agreement provides clarification about the owner-
ship and maintenance obligations for the shared wall. The focus
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is to prevent and avoid disputes before a problem with a party
wall, which affects the adjacent owners.
In addition to shared walls, party walls also include those
attached and adjacent to the property, walls belonging to a single
building structure, dividing walls between adjoining units, and
those standing on the land of two or more owners. Traditional
party wall principle dictates that each owner possesses as much
of a party wall as is located on their land. Essentially, each owner
acquires title to one-half of the wall, and each owner also secures
an easement for the support of the party wall.
A Party Wall Agreement between adjacent owners is a use-
ful, effective tool in understanding the agreements and restric-
tions 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.
Typically, a Party Wall Aagreement requires the owners to
maintain their portion of the wall consistently and harmoniously.
COMMERCIAL INVESTMENT REAL ESTATE
by Barbara Anne Spignardo