For surveyors
Name the scheme in the award, and the security is handled.
Where you determine that security for expenses is reasonable, the scheme holds it: safeguarded, visible to both owners, and released only on the conditions you wrote. It is free to both parties and to you.
In short
- Free to both owners and to the appointing surveyors.
- Held in a safeguarded escrow account at the Bank of England.
- Released only on the award's conditions, and never by one side alone.
- The scheme's rules are published as a versioned document you can cite.
How it works from your side
First
You determine the security
The sum and the conditions on which it returns are yours to settle, exactly as they would be otherwise. The scheme takes no view on the amount and has no role in determining it.
Then
The award names the scheme
The security clause in the award directs the sum to the scheme and sets out when it is released. Nothing about the rest of your award changes.
Then
The building owner opens the account
They register the building and upload the award. We read the security clause back to them and check ownership against the Land Registry before the account is funded.
Finally
You agree the release
When the conditions are met, one side's surveyor requests the release and the other agrees it. Where the two cannot agree, the third surveyor decides, and the scheme acts on the outcome rather than on either side's instruction.
A model security clause
Drafted against the scheme's published rules, so an award using it opens an account without further correspondence. Complete the bracketed terms and it stands on its own; the variants beneath cover the two things awards most often do differently.
The clause
Where the two owners have each appointed a surveyor and a third surveyor has been selected.
SECURITY FOR EXPENSES 1. The Adjoining Owner having served notice under section 12(1) of the Act requiring the Building Owner to give security for expenses in respect of the works described at clause [ ] of this Award, the Building Owner shall, before commencing those works, open an account with the UK Security for Expenses Scheme, operated by DOS & Co. Ltd. (registered in England and Wales, company number 08294966) (the "Scheme"), and deposit into it the sum of £[amount] ([amount in words] pounds) in pounds sterling (the "Security"). 2. The works described at clause [ ] shall not commence until the appointed Surveyors have received written confirmation from the Scheme that the Security has been received and is held. 3. The Security stands as security for the Building Owner's liabilities to the Adjoining Owner arising from those works, including (a) any sum payable in lieu of making good under section 11(8) of the Act, (b) any compensation payable under section 7(2) of the Act, (c) the cost of making good any damage under section 2(5) of the Act where the Building Owner does not make it good, and (d) the reasonable professional fees and Value Added Tax properly attributable to any of them. 4. No part of the Security shall be released otherwise than upon (a) the joint written direction of the two appointed Surveyors, (b) the written direction of either appointed Surveyor together with the Third Surveyor, (c) the written direction of the Third Surveyor alone following an award made by them in respect of which the period for appeal under section 10(17) of the Act has expired without an appeal having been brought, or (d) an order of a court of competent jurisdiction in respect of which the time for appeal has expired. 5. Any sum released under clause 4 shall be limited to such sum as the Surveyors giving the direction determine to be reasonably and properly due. 6. Subject to there being no outstanding claim for damage, making good, compensation or costs to which the Security relates, the balance of the Security shall be released to the Building Owner upon a direction given under clause 4 following completion of the works described at clause [ ]. 7. Any dispute arising out of or in connection with the Security shall be determined in accordance with section 10 of the Act.
Variant: staged release
Where the security should come back in tranches as the riskiest work is completed, rather than in one payment at the end. Replaces clause 6.
6. Subject to there being no outstanding claim for damage, making good, compensation or costs to which the Security relates, the Security shall be released to the Building Owner upon directions given under clause 4, as follows: (a) [ ]% upon completion of [the excavation, underpinning and temporary support]; and (b) the balance upon completion of the works described at clause [ ].
Variant: shorter release wording
Where the surveyors prefer the shortest form that works. Replaces clause 4, and does the same job in one sentence for as long as both appointed surveyors remain able to act.
4. The Security shall be released, in whole or in part, only upon the joint written authority of the two appointed Surveyors or, in the event of a dispute between them, of the Third Surveyor acting in accordance with section 10 of the Act.
The clause assumes the Adjoining Owner has served notice under section 12(1); where security instead follows from the surveyors' own determination, clause 1 should open accordingly. Name a Third Surveyor: clause 4 depends on one, and so do the scheme's rules, which recognise any two of the three surveyors or the third acting alone. The building owner deposits from a bank account in their own name, which is worth knowing before the sum is agreed with a company that banks elsewhere. The scheme is not a party to the award and is not bound by it; it holds the money on its published rules and acts on the directions the award provides for, so where the two ever differ it is the rules that govern the account. This is a starting point for the appointed surveyors to adapt, not legal advice, and the scheme takes no view on whether security is reasonable or on what the sum should be.
Specifying the scheme in an award?
Read the rules you would be citing, or list your practice in the directory.