What is a Colorado Party Wall Agreement?

A party wall agreement is a legally binding agreement between two or more buildings that are on adjoining lands. A party wall has been jointly built by two adjacent homeowners. A party wall agreement is important if an owner sells their property but then attempts to reconstruct a fence or wall by using the adjoining owner’s land.
A party wall agreement sets out any easements for support or access via the party wall along with any rights for a wall or fence. These may be temporary or permanent. A party wall agreement will also set out the obligations to repair that are between the owners , both past and future. A party wall agreement sits above the tort of negligent encroachment and does not allow the aggrieved party to sue for damages if there is any damage due to the Party Wall Agreement. Negligence can still be claimed at the discretion of the court.
A party wall agreement can provide certainty for the neighbors as it sets out the works that may be carried out on the party wall. An example of a building work that may require a party wall agreement includes works that affect a party wall (to the boundary) which both homes share. For instance, if the foundations of one home are strengthened, a party wall agreement would be required.
Other examples of where a party wall agreement would be required include where one owner may want to underpin the wall or make a fence higher but do not know where the neighboring owner’s property ends and the party wall begins.

Party Wall Agreements and Contract Law

Party wall agreements in Colorado are subject to a specific set of regulations found in the Colorado Common Interest Ownership Act ("CCIOA"). Among other things, CCIOA establishes general guidelines for party walls and party wall agreements; however, certain specific state laws apply to party wall agreements.
For example, CCIOA requires that any party wall that is not specifically identified (through a legal description or plot plan) in a Declaration reserving a party wall or party walls, shall be deemed to exist between unit boundaries in a building which is located on the Property and adjoining unit boundaries. CCIOA also places restrictions upon actions concerning the use and maintenance of the party wall or walls such as requiring the consent of any affected unit owner before the wall can be altered or removed.
If a party wall agreement is entered into during the development stage of a community association, according to CCIOA, no special occupancy permit that specifies construction of the party wall shall be issued nor shall any building permit be issued until the party wall agreement(s) has been filed in the office of the county clerk and recorder of the county in which the property is located.
If a party wall agreement is entered into after the development stage principle requirements:
CCIOA does provide individuals with grievance options if they believe their party wall agreement has been violated. If the party wall agreement restricts the use of party wall- and/or fence-adjacent areas, or prevents the unit owner from erecting a barrier fence or installing an exterior improvement or feature adjacent ground and/or fence-adjacent area, an aggrieved unit owner may seek specific performance or injunctive relief. CCIOA also allows for any member of a community association to seek injunctive and/or declarative relief from violations of any provision of the party wall agreement.
The general guidelines for party walls under CCIOA provide homeowners and other associations with the authority to create party walls for their property with the goals of maintaining the value of their property, providing avenues for repairs and maintenance, and setting forth who is responsible for what. Such authority is limited, however, and homeowners must be aware of the specific limitations before entering into a party wall agreement.

How to Draft a Party Wall Agreement

Engaging with a construction lawyer who specializes in party wall agreements will certainly help the process, but this is not a requirement. Where it is assuming that the agreement will be drafted by a construction lawyer, the lawyer will typically draft the agreement using a standard template. This will set out the obligations and rights of both parties, and it will need to be agreed upon by both parties before serving a notice. If the construction lawyer does not know the neighbor (or vice versa), the lawyer will normally serve a notice on behalf of the client to the neighbor.
The process of serving the notice to the neighbor is an informal procedure. If the neighbor is known to one of the parties, then the notice will usually be served by the construction lawyer if there is one involved. Otherwise, the notice may be served by the home or landowner in person, provided that they can show that they are the legal owner of the property.
If the neighbor is not known, then the construction lawyer may have to make some extensive inquiries to make sure that the correct person is served. They will usually be able to do this through the Land Registry, which builds up records of title information as each transaction goes through the relevant departments. The construction lawyer should be able to see the title registers for each neighbor’s home or land and make inquiries into them accordingly.
Once the notice has been served, the neighbor usually then has two weeks to respond. The response will either be an acknowledgement of the notice, agreeing with the works to be done, or it will be around making a counter request. A counter request is an additional request that the neighbor may put forward in response to the notice, perhaps setting out what works or actions they would like to have done at the same time as those that have been requested in the initial notice.
For example, if a neighbor’s property goes onto the market during the building work, their right to change their mind and even stop the work from proceeding may be more complex than that. This is because a buyer may want the work to go ahead, and because the work has already started they may find that they cannot stop it from going ahead.
As the system is underpinned by the Party Wall etc. Act 1996, the Act sets out a number of defined times for when notices need to be served, and when they can be done in terms of a specific calendar date. A schedule of the key dates during a party wall process is outlined below:
The timescales are extended if the notice is served under Section 10(4).

Common Conflict Resolution in Party Wall Agreements

Disputes involving party wall agreements can vary widely in Colorado. Common disputes include construction delays, noise complaints, shared responsibility for maintenance costs or responsibilities, and property damage caused by one party’s construction. Noise disputes are particularly prevalent in party wall agreement cases, especially in a state like Colorado where the majority of homebuyers are buying in urban areas with multi-family housing. Noise complaints under these agreements often stem from excessive noise due to loud parties or even children playing. Parties to a party wall agreement should try to avoid litigation and resolve their disputes amicably. Mediation is an increasingly commonplace alternative dispute resolution (ADR) process in which a qualified neutral third party (mediator) helps the parties resolve their differences. For example, if a party asks to open up a portion of the party wall to allow for easier access, causing a minor inconvenience to the other party, a mediator can help facilitate an effective means of minimizing that inconvenience. However, disputes that cannot be settled amicably through ADR will require court intervention to resolve disputes . Colorado courts have a general preference for resolving party wall issues as afforded by the Colorado party wall statutes. An injured party will always want to seek a remedy in court if damage is done to his or her property. Another situation in which a court remedy might be sought as a last resort is when one neighbor refuses to cooperate with a party wall agreement. In such cases, the aggrieved party may petition the court’s assistance to force the uncooperative neighbor to comply full with the party wall agreement. A party claiming injury or damage must prove that the injury or damage was actually caused by the other party wall’s actions. However, courts will generally prefer issuing an injunction to remedy a party wall violation because a party wall agreement is a type of restrictive covenant (as seen in rental or commercial leases). With a restrictive covenant, Colorado courts prefer to impose injunctive relief (e.g., an order from the court requiring the neighborhood neighbor to do or cease doing something) until a trial on the merits occurs rather than grant monetary damages.

Advantages of a Party Wall Agreement

Having a party wall agreement in place not only serves as an insurance policy for you and your neighbor when it comes to clarifying who’s responsible for what, but it also serves as a means of protecting your greatest investment—you can think of it as a way of adding equity to your home before you even buy it. With a party wall agreement in place, you have a clearer understanding with the neighboring property owners about any and all rights and responsibilities of both homes. This can serve as a means of preventing a dispute regarding who handles any problems that arise on either side. It can also protect you in the event that the other property owner breaks the agreement—assuming you’re able to prove that a breach actually occurred, you are able to recover damages from your neighbor. Regardless of how friendly your relationship with your neighbors is, having a party wall agreement makes financial sense, because it can help boost the value of your home. Since it essentially makes a section of your property into a much more valuable entity, buyers will be less likely to negotiate on the price and pay you the price you want for your property. Ultimately, a party wall agreement is simply about preventing problems that you know are likely to happen, saving you money and helping to keep your home’s value as high as possible.

Lawyers and Party Wall Agreements

There are situations in which hiring a lawyer experienced with party wall agreements makes sense, just as there are situations in which a lawyer may not be necessary. Here are some of the more common scenarios when hiring a lawyer is prudent:

• If an agreement cannot be agreed upon, a mediator is likely needed. A mediator can review the situation and offer solutions to resolve a dispute, often with a great deal of success.
• While not nearly as common, there are also occasions when the failure of a neighbor to abide by the terms of a party wall agreement leads to the need for a lawsuit, repair and/or damages.
• If a party wall agreement needs to be prepared , a Colorado party wall lawyer experienced in home construction and repair will be able to assess the needs of both property owners on either side of the party wall.
• A lawyer who handles this type of work is likely to be familiar with the legal requirements for party wall agreements in your area, and also with the practices and customs of the local building industry.
• If the plans for the remodel are larger in scope or unclear, a lawyer can work with you to decide if the agreement should spell out provisions related to supporting columns, if there are any, and other important specifics.

While some people may feel that they can save money by preparing an agreement without the assistance of a Colorado party wall lawyer, it may actually cost you more in the long run. If an agreement has not been prepared properly, you could face major legal and financial repercussions.