Scottish Parliamentary Working Group on Tenement Maintenance

Proposals for new legislation to improve tenement maintenance have been put forward by a Scottish Parliamentary Working Group of MSPs and others.

The main proposals in the report are for

  • Compulsory 5 yearly property inspections
  • Compulsory Owners Associations
  • Compulsory Sinking Funds

You can see the full interim report here  Consultation on the proposals is open until 27th February.

We’ve set up an online survey to help owners to put their views on the proposals forward. Please have your say – the survey is open until the 27th February. If you are not a flat owner, please give your comments via the official consultation channels.

The Working Party is also keen to gather examples of where these proposals would have been of help to flat owners.  If you have such a story, please use the online survey to tell us and we’ll pass these on too.

Compulsory Owners Associations

Why are these proposed?

While owners association are useful in bringing owners together to improve tenement management and promote good relationships between neighbours, they are limited in their ability to act because, even when properly constituted, they are not corporate bodies and cannot sign contracts. This leaves individual owners exposed if there are problems.

More details of current owner association rules.

How would associations be managed?

The proposed associations will appoint a manager who could be a factor, another type of employee or an owner. The manager would have powers to make owners co-operate and abide by “house rules”. The manager’s appointment would be reconfirmed every year.

A single annual meeting would agree the budget and programme of works for the year and the manager would have full authority to implement the programme and to commission emergency repairs (within the approved budget) without going back to owners each time.

The new owners association would have its own bank account and could set monthly management and sinking fund contribution levels.

What if owners are apathetic?

The annual meeting would require a minimum number of owners to be present. If owners are apathetic and do not attend or make their views known, a second meeting can be called and decisions made by those there, even if this is below the minimum number required.

Would my block need to set up an owners association?

Owners associations would be required for buildings of all sizes, existing and new, though there might be exceptions for those with say only 2 flats.

However, establishing owners associations as corporate bodies is legally complex and might require reference to the UK Parliament.  A fall-back position is to make them voluntary by majority agreement of owners in existing blocks and compulsory in all new developments.

Compulsory Sinking Funds

Why are these proposed?

Sinking funds ensure owners save for future major repairs. Owners will not be able to withdraw their contributions when they sell their flats. A building with a good sinking fund will become more attractive to future purchasers than a similar building with no fund. Fund management rules and owners share of contributions will be in accordance to the rules currently set out for managing and paying for repairs in the tenement’s current title deeds.

Would my money be safe?

Sinking Fund contributions would be held on owners’ behalf by a secure, highly regulated and accountable not-for-profit organisation. Fund managers should have the ability to invest funds in order to grow them in line with increasing repair and maintenance costs.

What if owners don’t pay?

Owners who cannot afford contributions will not be required to pay but any underpayments to the Sinking Fund will have to be made up before the flat can be sold. A penalty to cover lost interest will be applied when underpayments are made up. Owners who default on payments will still be required to pay for major repairs and will just have to find other ways to fund the cost.

Compulsory 5 yearly inspections

Why are these proposed?

Experience in other types of buildings shows that periodic property inspections can lead to regular maintenance programmes which are cost effective for owners preventing major repairs being required.

How would they work?

The inspections would be compulsory at minimum 5 year intervals and would cover the common parts of the building - roof, chimneys, walls, stairs etc. The inspections would be carried out by independent building professionals with appropriate training and professional insurance. The inspection results would be publicly available to all owners, prospective purchasers, tenants, neighbours and policy makers.

How will owners use them?

The results of the inspection would be set out in a way which allows owners to plan a programme of repairs over the coming 5 years. Required repairs would be identified in 5 categories from “No problem” to “Immediate action required”. Cost of identified repairs could be an added feature.

Owners will be able to update the inspection with details of completed repairs creating a permanent record or building "log book".

Will they replace the Home Report Survey?

The inspection would be much more thorough than those in the current Home Report but wouldn’t replace the Home Report survey which also includes a property valuation.