A party wall agreement is a legal agreement between two property owners who share a common wall or structure between their properties. The agreement stipulates rules around ownership and maintenance obligations for the shared wall, with the goal of obviating disputes between parties. Party walls can be found in apartments, condominiums, hotels, office complexes, and other types of buildings where different tenants share a common structure.

The party wall agreement should clearly define which party is obligated to maintain the wall, as well as the repercussions if the wall is not maintained. Typically, the agreement requires both owners to maintain their portion of the wall together and in concert. The agreement may also cover how the two owners deal with shared expenses such as insurance, structural problems, roof upkeep and replacement, foundation, and shared utility lines.

The agreement will also stipulate rules regarding an owner’s rights to alter the wall. For example, the agreement might say that both parties can hang pictures on their respective sides of the wall, but for one party to make structural changes to the party wall, it may require the consent of the other party.

Party wall agreements are important for business owners, in particular, to avoid expensive litigation over disputes. In some cases, a party wall agreement is required by lenders before they approve a loan. The rights and obligations of the adjoining landowners will largely be dictated by the agreement.