House extension dispute with neighbour

ognum

First read the Act, you can download easily.
Next print out the notice as you are leagally obliged to do.
Next wait for her response, she has two weeks to send back the reply notice that you need to print out and send to her.#
If when she replies she requests a surveyor she can appoint her own and you need your own. You cannot do anything for I think 2 months but its a while since I read the act. Go read it!

G_M

Chris has summed up nicely.

Get professional advice.

If you start digging and the foundations of neighbour's wall collapse, you are in deep doo-doo!

My neighbour recently built an extension close to my wall. My surveyor insisted he dig/lay the foundations in sections ie a 3 foot length dug/concreted, then a gap, and then the next 3 foot section. Only when these sections had dried out/settled could the intervening sections be dug.

This meant my wall was not exposed along it's whole length at once to the laying of his foundations.

chappers

The party wall act is a totally toothless act.
You can commence works without it and whether you have an agreement in place or not makes no difference to your obligations with regards to any damage you may cause.

There is no penalty or enforcement if you don't serve a notice and the only way she can stop your works is with an order from the courts.
She cannot invoke the act other than by way of a court order adn I have only ever heard of a court order being issued where damage has already occured.
Also if your foundations are not going any deeper than hers then the act does not apply.
I run a building company and in 15 years have only 3 times worked fully under the PWA.
As I said your legal obligation for any damage caused remains the same and have always found that polite negotiation is better than any offical framework.
Tell her that you will be starting work and invite her to supply you with pictures of the current state of her property in case of a dispute over damage.
The fact she doesn't have PP doesn't exclude you from responsibilty for damage to her property as she may be able to obtain retrospective permission and the fact she has built on your land is a seperate issue which requires seperate action.

teneighty

As most other people have suggested read the guidance on the Act: http://www.communities.gov.uk/documents/planningandbuilding/pdf/133214.pdf

In particular look at Diagram 6 on page 19 which I'm assumming relates to your situation. Like Chappers said if you are not taking your foundations deeper than your neighbour's the Party Wall Act should not apply.

As a rule of thumb if your extension will be adjacent to your neighbours extension and it was built within the last 35 years there is no reason why your foundation would be deeper.