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Re your comment about being forced to sell up …. It sounds as though you would not have had a happy time living next door to your partying neighbour whether the wall was removed or not.
The original question from ‘chesswood’ was about structural walls and it appears that your partying neighbour jumped through the necessary ‘hoops’ with regard to the wall removal, (although I personally would have requested a structural engineer’s report rather than rely on a report by a builder).
The party noise issue that you experienced is a totally separate issue and one that had its own processes and remedies via by-law infringement notices etc. Did you try this avenue before you moved?
Although building designs endeavour to have quiet areas of Lots abutting each other both vertically and laterally, as you suggested, there is no mandatory requirement to retain a bedroom as a bedroom. A bedroom could be re-purposed and changed to a playroom or a rumpus room or a lounge room. That is for the Lot owner to decide and not the neighbouring Lot owner.
Also, a crying baby in an adjacent Lot’s bedroom as an immediate neighbour, or a loud snorer, or an argumentative couple may create similar noise problems.
What to do about these types of noises that are not covered by by-laws or legislative regulations? There are no remedies except for the following: Speak to the neighbour; buy earplugs; install sound proof particle board insulation in your Lot; move your own bedroom to another quieter room ….. or move.