Party Wall Agreements

[Troy Stoehr]

Does anyone have any experience with Party Wall Agreements? I own 1/2 of a duplex that was sold in an auction and the other half was sold to another person (unfortunately...). Anyway - I just refinanced the property and ALMOST lost the loan because a lot of banks would not take the loan because there is no party wall agreement recorded with the state/county. I just was told by my lawyer that he'd do it for $1,000 which seems rediculous considering how straight forward and simple this agreement would be. Is this something I should get done right through a lawyer or should I just grab a doc off of legalzoom.com and do this myself? Thoughts?

[Bill Gulley]

Wow, a grand, it's usually boilerplate might take 5 minutes to find it, 5 minutes to print it, 10 minutes to fill it in, 10 minutes to sign it, 2 minutes to notarize it and maybe $2 to mail it to the Recorder of Deeds or you could take it there and file it. Liability is very remote. Consider that the attorney will likely hand this off to a secretary as well and then act like he sat there all morning drafting it. LOL

These agreements address maintenance and improvements to a common wall.

You need to state the parties to the agreement and provide the legal description of the properties subject of the agreement. This agreement is made in consideration of the mutual covenants and agreements contained, no other consideration is required.

Basically saying that neither owner shall make any improvement or perform any construction activity that penetrates the center of any common wall or beyond any property line of common improvements to the subject properties.

That in the event any construction, repair or maintenance is required to the wall that the expenses thereof shall be shared equally. That in the event any repair or improvement be required for any utility service that such expense shall be paid by the party served by that utility in order to restore both sides of any common wall to its original state.

The parties generally further agree that access shall be granted, by either party to the other, upon reasonable notice given which may be necessary to facilitate the repair or improvement of any common improvement, such access not being unreasonably denied. In the event of any emergency either party may gain access required being liable for any damage related to gaining access. The means of giving notice being agreed as well.

Throw in a hold harmless and indemnification paragraph, that each party shall, each to the other, hold harmless the other as to any accidental damage arising from or out of any insured peril, and indemnify, each to the other, for any loss, cost, damage or expense or judgment arising from or out of any repair required to include, but not limited to, reasonable costs of collection, attorney fees and costs of court in enforcement of this agreement. It also being agreed that any amounts owing from any non-payment for any work required shall become a lien, as may be provided by law, upon the premises of the defaulting party until such liability is fully cured.

You need to say too that this agreement shall run with title as an encumbrance upon title to all current or future owners, their heirs, successors and assigns, forever unless terminated or modified in writing and executed by all in title to the properties described.

I'm not an attorney and this isn't legal advice, but this is basically what a lender will be looking for; who pays for what, how to get access for repairs, how they can collect for expenses, that the agreement runs with title and extends to all who may acquire an interest to the properties. It's not just the wall, but the property line referenced extends the common wall below the foundation and into any common attic and roof.

You can certainly make one that is more involved, including liabilities, types of improvements like a fireplace, noise might be addressed, insurance loss proceeds for damages may be claimed or assigned and other issues.

Just a basic overview, so you might negotiate with that attorney, take him a rough draft maybe or get other bids. The neighbor will also need one, if they sell and their buyer needs a loan that transaction will likely require the agreement, so split the cost. :)