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Do I need a party wall agreement when houses not level?

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We're about to start an extension project. My house is the one on the left of the picture and is about 1.5m longer than the neighbouring house, and has a roughly 1m wide alleyway inbetween. The extension will be exactly where the conservatory is at the moment in the image. I'm aware of the 3m rule on serving notices, but unsure if this applies when the extension is then also further back? Do I need to serve notice? 

Screenshot 2024-03-04 at 09.26.50.png

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Couple of things. Are you digging new foundations or using the conservatory founds in which case no need to serve as I understand it. Secondly it won't matter if you digging down because the rule is circular so 3m radius.

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