Tenement (
Response by the
Chartered
June 2003
Introduction
The Chartered Institute of Housing in Scotland (CIH) is
the professional body for people who work in housing, within local authorities,
registered social landlords, central government, the private sector and a range
of other bodies. The CIH has over 17,000
members in the
The CIH is pleased to be given the opportunity to respond
to the consultation on the Tenements (
In developing its response, CIH has consulted with its
members working in a range of organisations, including registered social
landlords and local authorities. Many
members work for organisations which own property in mixed-tenure estates and
therefore have first hand experience of the problems faced when attempting to
repair and improve housing stock.
Key Issues
The Institute believes that the Tenements (
The Institute fully supports the premise of the Housing
Improvement Task Force (HITF), that ‘responsibility for the upkeep of houses in
the private sector lies first and foremost with their owners’ and our response
to this consultation paper is based on this principle. However, two related issues also need to be
dealt with before this required culture change can coming into being:
Finance – While the proposals for
majority decision making and dispute resolution contained within the Bill will
increase the chance of repairs being carried out, there will still be cases
when owners refuse or cannot pay. The
HITF gives a number of recommendations concerning assistance to owners in
Chapter 5 of its Final Report. The
Executive is asked to introduce the changes suggested in the report at the
earliest opportunity as the governance proposals contained within this Bill
will be ineffectual without a financial regime which supports it.
Identifying Problems – While the Bill will introduce
an adequate method of governance (if strengthened by compulsory Development
Management Schemes in developments of over 8 properties – see Discussion Point
7), the CIH believes that there are still inadequate provisions in the Bill to
ensure that repair problems are identified.
That is why, as part of our submission to the HITF, the Institute has
proposed that five yearly property
surveys be introduced for tenements to facilitate common repairs and
maintenance. Such a scheme should be
introduced as part of the Tenements Bill.
Chapter One –
Ownership of a Tenement
Discussion Point 1: Do you
agree that the existing common law rules of ownership within a tenement should
be restated? Should they apply to all properties – existing and new? Should
they be capable of free variation in the title deeds in the future?
The Institute is disappointed that the Scottish Law
Commission (SLC) has not recommended the principle of collective ownership as an
alternative to the restatement of common law.
Collective ownership would ensure that individual owners understand the
responsibilities that come with buying a tenement and would therefore lead to
fewer neighbour disputes regarding repairs and maintenance. The Institute would therefore urge the
Executive to consider the introduction of collective ownership, particularly
for new-build tenements.
However, given the difficulties surrounding the
introduction of such a scheme for existing properties, the Institute agrees
that existing common law should be restated for existing properties and should
be capable of free variation of the title deeds in the future.
Discussion
point 2: Do you agree with the proposed rules on
the boundaries of ownership of tenement flats? If you do not, which do you
disagree with, and why?
The Institute agrees with the proposed
boundaries of ownership.
Discussion
point 3: Do you agree that the service test is the
most appropriate apportionment of pertinents within a tenement? Or should all
flats within the tenement be given an equal right of common property to all
pertinents?
The Institute does not believe that the
proposed ‘benefit of service’ test is the most appropriate method of apportionment. The service test is overly complex and would
inevitably lead to confusion, resentment and neighbour disputes. Any system must be based on the two
principles of fairness and transparency and the Institute therefore believes
that all flats within a tenement should be given equal rights and
responsibilities towards pertinents.
Discussion
point 4: Do you agree that each flat served by a
pertinent should have an equal share in that part of the pertinent which serves
it? Alternatively should all the flats served by a pertinent have an equal
share in the whole pertinent?
See discussion point 3 above.
Discussion point 5: Do you agree that the common
close, stair and any lift should be owned equally by all the flats to which
they give access?
The Institute agrees the common close, stair and any lift
should be owned equally by all the flats to which they give access
Discussion point 6: Are you content with the
different treatment of external paths or stairs compared with the internal
pertinents of a tenement? Should fire escapes be treated like external paths,
etc., or should they be owned equally by all the flats?
As above, the Institute believes that equal ownership of
pertinents is the best method of apportionment.
External paths/stairs and fire escapes should be owned equally by those
who have use of them.
Chapter Two –
Tenement Management Scheme
Discussion point 7: Do you think the Tenement
Management Scheme as currently drafted should apply to all tenements in
The CIH agrees that the Tenement Management Scheme as
currently drafted should apply to all tenements in
However the Institute believes that further consideration
needs to be given to making the more complex Development Management Scheme
obligatory for both existing and new large developments. The Institute is concerned that developers
and owners may opt for the simpler Tenement Management Scheme for reasons of
self-interest and not for the benefit of the development. The Institute therefore seeks reassurance
that the Tenement Management Scheme (with owners association) is sufficient to
manage developments of over eight properties.
Discussion point 8: Do you think that the title deeds
should always prevail over the Tenement Management Scheme? Or do you think that
the Tenement Management Scheme should supersede the title deeds on all matters?
The CIH believes that the Tenement Management Scheme
should supersede title deeds. While
there may reasons why some title deeds include other decision-making
arrangement, the Institute believes that the principle of majority voting
should be the foundation of tenement management.
Superseding Title Deeds will also ensure the end of
apportioning costs on the basis of rateable value. This outdated system often leads to problems
when trying to take forward repairs.
Indeed the introduction of simple majority voting will make carrying out
repairs much easier in general, for example, the use of Statutory Notices
referred to in Recommendations 91 and 92 of the Housing Improvement Task Force
Final Report
Discussion point 9: Do you think that the Tenement
Management Scheme should only apply to the extent that the title deeds are
silent?
See Discussion Point 8.
Discussion point 10: Do you think that the title deeds
should prevail on the 2 specific matters of decision making and the
apportionment of costs? Or do you think that the Tenement Management Scheme
should supersede the title deeds on these 2 matters?
See Discussion Point 8.
Discussion point 11: Do you agree with the concept of
scheme property? Do you agree with the list of items to be included in scheme
property?
The CIH agrees with the concept of scheme property but
would ask that two further items be included; chimney stacks given their
potential to cause damage to the rest of the tenement if not maintained and
doors, windows, skylights, vents or other openings if they benefit more than
one property.
Discussion point 12: Do you agree that it should be an
owner's right to demand that his co-owners maintain their property?
The Institute agrees however would reiterate the call
detailed in Discussion Point 20 that further guidance is required as to what is
meant by support and shelter.
Discussion point 13: Do you agree that the definition
of maintenance should only include incidental improvement?
The Institute agrees that the definition of maintenance
should include incidental improvement.
However disputes will arise over the interpretation of incidental
improvement and therefore guidance should be issued on what is meant by the
term.
Discussion point 14: Do you agree with the
Commission's provision for flats of equal size? Do you think that one and a
half times is the right multiple to apply to this rule?
The Institute agrees with the decision to apportion costs
by floor size but would ask that consideration be give to a 1:2 ratio rather
than the
Discussion point 15: Do you agree with the
recommendation of the Housing Improvement Task Force that there should be a
requirement in the proposed Bill for the establishment of an owners'
association in all future developments where there are eight or more units in
the development? Do you think that the provision in the Tenement Management
Scheme would be sufficient even for larger developments?
See Discussion Point 7.
Discussion point 16: The Housing Improvement Task
Force has commented that it would be impractical to use the Tenements Bill to
compel all owners to establish and contribute to reserve or sinking funds in
either existing or new developments. Do you agree?
As mentioned in the opening general remarks to this
response, the impact of the Tenements Bill will be greatly lessened if no
changes are made to the way repairs are funded.
Fundamental changes are required to the culture of owners and their
attitude towards funding repair work.
This can only be done through far-reaching policies and the Institute therefore
supports the introduction of mandatory Building Reserve Funds (BRFs).
The Tenements Bill is an early opportunity to tackle this
issue in a pro-active manner. However
the Institute recognises that it would be impractical to introduce such funds
across the board over night and therefore suggests tying the establishment of
such funds to a change in flat ownership.
Every new owner entering into an agreement to buy a flat would be
required to budget for payments while existing owners could opt into the scheme
on a discretionary basis.
The establishment of a BRF should be mandatory in all
new-build tenements. Action needs to be
taken from such an early stage to ensure that the build-up of expensive repairs
faced by existing tenements does not begin within new tenements.
On a voluntary basis, and assuming that the law is changed
to make it possible for a majority of owners to make changes to the deed of
conditions, the route to establishing the BRF would be as follows:
1. The majority of owners agree to a
binding management agreement or the introduction of a clause, establishing a
BRF, in the deed of conditions.
2. A suitable investment fund with
adequate management provisions and safeguards is established.
3. Those owners who are willing and
able to save commence to make regular contributions.
4. When these owners come to sell
their properties, the incoming owners pay the property price plus the accumulated
value of the BRF for that property.
Further details of the Institute’s policy proposals can be
found in our recent report Common
Property, Common Poverty, a copy of which is included with this response
and available from the CIH in
Discussion point 17: The Task Force decided against
recommending that it should be a requirement for all title deeds for new
developments to require owners to appoint a property manager. They did,
however, recommend that the Scottish Executive should seek to provide advice to
developers and their legal advisers on good practice on specifying property
manager burdens in new title deeds. Do you agree with this approach?
Following on from the points raised in Discussion Point
Seven, the Institute believes that larger developments should be compelled to
have a more comprehensive management scheme than that contained within the
Tenement Management Scheme. The CIH
therefore believes that property managers should be required in any new
development of eight of more units.
Discussion point 18: Do you agree with the proposals
in section 5 to allow applications to the sheriff for annulment of decisions
taken under a management scheme which governs a tenement?
The Institute is concerned that this proposal will only
result in the prevention of necessary repair work and that the decision of the
majority should hold. An annulment
should only be granted if an individual proves that the proposed work is not
covered by the definition of maintenance given in this Bill.
Chapter Three –
Resolution of Disputes
Discussion point 19: Do you agree that disputes in
relation to management schemes and decisions by a majority of owners should be
resolved by summary application to the
The Institute agrees that disputes should be referred to
the
Chapter Four –
Support and Shelter
Discussion point 20: Do you agree with the proposed
restatement of the duty to provide support and shelter in section 8? Do you
agree that an owner should not be bound by the duties of support and shelter if
the duty would be unreasonable having regard to the age and condition of the
tenement and the likely cost?
The CIH supports the restatement of the duty to provide
support and shelter. However there is a
concern that unscrupulous owners will use the grounds of unreasonableness to
delay necessary work and further guidance on what is meant by support and
shelter is required.
The Institute also believes that owners should be bound by
the duty to provide shelter and support regardless of age and cost as the decision
of one owner not to take part will have a significant impact on the equity of
owners.
Discussion point 21: Do you agree with the proposed
restatement of the obligation to refrain from any alterations to, or work on, a
tenement which might interfere with support or shelter or with natural light?
Do you agree that tenants should have negative obligations (but not positive
ones) enforced against them?
The Institute agrees with the proposed restatement.
Discussion point 22: Do you agree with the proposal in
section 10 that the cost of work carried out under the positive obligation to
provide support and shelter should be recovered from the other proprietors as
if the work had been carried out under the management scheme in force for the
tenement?
The Institute agrees however there is a danger this
proposal could be abused by unscrupulous contractors. This further demonstrates the need for the
guidance suggested in Discussion Point 20 above.
Chapter Five –
Repair: Costs and Access
Discussion point 23: Do you agree that sellers should
remain liable for repair costs which arose during their period of ownership
even if they have now sold the property? Do you agree that new owners should be
severally liable with the old owner, but should have a right of relief against
the old owner?
The Institute believes that old and new owners should
remain severally liable for repair costs.
As new owners will be keen to have outstanding payments settled before
they purchase a property and therefore become severally liable, such a system
may ensure that outstanding payments are settled when properties are sold. The Institute also recommends that the
Sellers Packs proposed by the HITF include information on outstanding repair
costs.
If sellers were only liable during their period of
ownership, it is highly probably that many payments would remain outstanding as
the seller would have no encouragement to settle his repair costs and the new
owner would have no incentive to ensure outstanding bills are settled before he
completes his purchase.
Discussion point 24: Do you have any other suggestions
as to how to trace missing owners?
The HITF recommends that there should be a duty on an
owner with a common repair and maintenance burden who does not have the house
as his sole or main residence to notify other owners with a similar burden, or
the property manager if there is one, of a contact address. While the CIH
supports such a proposal, the Institute believes a system of
self-certification for private landlords should also be introduced. Not only would such a system introduce a
register of missing owners but it would also ensure minimum standards in the
private rented sector.
The Institute recognises that the Tenement (
The Institute would also suggest the introduction of an
obligation on sellers to inform their owners association or property manager of
their forwarding address for the period
during which they remain liable for repairs.
Discussion point 25: Do you agree that an obligation
to pay a cost should prescribe after 5 rather than 20 years?
The Institute agrees that the obligation to pay should be
reduced to five years, unless the repair work in question has yet to be
completed (or even started) in such cases the obligation should remain.
Discussion point 26: Do you agree that the common law
right of recovery should no longer apply in circumstances where a management
scheme is in place?
The Institute accepts that were a management scheme is in
place, this should take precedence over common law.
Discussion point 27: Do you agree with the proposals
in section 14 of the draft Bill on access for maintenance purposes? Do you
agree with the proposed safeguards on the proposed right of access?
The CIH agrees with the proposals however attention must
be given to the problem of absentee owners and the Institute seeks assurances
that the statutory right of access will operate effectively in cases when an
attempts over time to contact an owner have failed.
Chapter Six –
Insurance
Discussion point 28: Do you agree that there should be
a minimum standard of statutory insurance based on a duty to insure and a list
of risks to be prescribed by Scottish Ministers? Do you have any views on how
this duty is to be enforced?
The Institute agrees that there should be a minimum standard
of statutory insurance. This could be
enforced at the point of sale whereby a purchaser would be prevented from
signing missives until proof of insurance has been shown. It is also a requirement of most mortgages
that insurance be taken out and mortgage providers could be made to ensure that
borrowers forward up-to-date insurance documents to them on an annual basis.
Following on from Discussion Points 7 and 17, an owner in
a larger development with an owners association and/or should be obliged to
show up-to-date insurance documents to the association or factor on an annual basis.
Discussion point 29: What are your views on a
statutory obligation to have a common insurance policy for a tenement? Do you
think that these should be made mandatory? Do you agree with the Housing
Improvement Task Force that common insurance policies should be mandatory for
new developments?
The Institute believes that a common insurance policy
should be made mandatory for all new development. Further thought also needs to be given as to
how such an obligation can in time be extended to include existing
tenements. The Institute refers to the
suggestions made in Discussion Point 28 regarding enforcement.
Chapter Seven –
Television Aerials, Gas and Other Services
Discussion point 30: Do you agree with the proposals
in the draft Bill on the placing of television aerials and satellite dishes?
While the CIH agrees with the proposals, subject to making
good any damages caused when installing an aerial or satellite dish, the Institute
also suggests the installation of communal aerials or dishes are included in
the improvements which can be decided by majority voting.
Discussion point 31: Are you content with the
proposals for the installation of gas and other services in tenements?
The Institute supports this change.
Chapter Eight –
Demolition and Abandonment of Tenement Buildings
Discussion point 32: Do you agree that the demolition
of a tenement should not affect the ownership of the site?
Discussion point 33: Do you agree with the proposals
on liability for the cost of demolishing a tenement building? In particular, do
you agree that:
(a) except where the titles provide otherwise, the cost of
demolition should be borne equally by the owners of flats in the tenement;
(b) where a tenement is only partially demolished, the
cost should be borne equally but only by the owners of the flats which have
been demolished; and
(c) where the floor area of the largest flat is more than
one and a half times the size of any other flat, liability for cost should be
based on floor area.
Discussion point 34:
In relation to
the site of a demolished tenement, do you agree that in the absence of a burden
requiring rebuilding or agreement among the owners to rebuild, any owner of a
former flat should be entitled to have the site sold with the proceeds being
divided equally among the owners of the former flats (except where the floor
space of the largest flat is more than one and a half times that of the
smallest flat)?
Discussion point 35: Do you agree that outstanding
securities should be treated as securities over a share of the whole site of
the former tenement, with the shares corresponding to the number of flats
previously existing?
Discussion point 36: Do you agree that the sale of a
derelict tenement by any one of its owners (with appropriate sharing of the proceeds
among all the owners) is an acceptable way of resolving the impasse under the
present law?
The Institute agrees in principle with the proposals
contained in Chapter 8 and has no further detailed comments to make at this
time.
Chapter Nine - Liability
for Certain Costs
Discussion point 37: Do you agree that non-owners
should be treated as though they were owners of a part of a tenement which has
been damaged but only for the purposes of founding a claim for the recovery of
maintenance costs against the person who caused the damage?
The Institute agrees in principle with the proposals
contained in Chapter 9 and has no further detailed comments to make at this
time.
Chapter Ten –
Amendments to Title Conditions Act
Discussion point 38:
Do you agree with
the proposals on the meaning of "owner" and the determination of
liability?
The Institute has no comment to make on this section at
this stage.