Zahra Choudhary | Solicitor

Tenement law changes: Discussion Paper on Compulsory Owners’ Associations

A much-needed discussion is being undertaken by the Scottish Law Commission, focussing on the reform of the law of tenements.

The law applying to tenements in Scotland is principally defined in the Tenements Scotland Act 2004. A tenement is defined to mean a building or part of a building comprising of two or more related flats, which are designed to be in separate ownership and are divided from each other horizontally. In reality, the maintenance and structure of a tenement building is different, and requires a different approach.

The overall management and improvements of works to these buildings is argued to be lacking. Statistics show that there are many underlying problems faced by tenements in Scotland. The Scottish House Conditions Survey findings revealed that 48% of dwellings in Scotland had critical disrepair. The proposals aim to find solutions to the issues highlighted and bring about positive change in this area.

The new provisions propose changes such as the introduction of a new mandatory provision into the main body of the 2004 Act. For every tenement, an owners’ association would be created and anyone who owns a tenement would be a member of this owners’ association. The new sections would impose certain mandatory duties on the owners’ association, including a duty to appoint a manager for the maintenance of the tenement. More basic matters are also discussed such as the operation of the owners’ association, including whether it should have to provide a public record of its name, address and membership, how it could also sign documents and so on.

The proposal also focused on the Owners’ Association Scheme (OAS) replacing the Tenement Management Scheme (TMS) as the fall-back rules for the management of the tenement maintenance, in circumstances where the property titles are silent or incomplete.

In addition, the proposal also looks to deal with members being under a mandatory duty to appoint a manager to exercise the powers of the owners’ association on a day-to-day basis. The manager could be one of the flat owners or a professional factor, and would operate as an agent of the owners’ association. The Owners’ Association Scheme would set out the default rights and responsibilities of the manager, which could be modified by owners in the flat titled if they wish. Members would continue to be liable for the costs incurred in relation to the maintenance, with default rules on liability in the OAS like those in the TMS. However, an important difference is that the process of planning for and paying maintenance costs will in the future have to be arranged through an annual budget process and payment of a service charge.

The commission is eager to hear from the public regarding their opinions and thoughts on how best to deal with these problems and find suitable solutions. It is intended that the issues faced by tenements, and the most suitable approach in addressing these issues, can be reached for all those concerned.

At present the deadline in responding to the paper is the 1st of August 2024. The responses which are received will be used to produce a report in 2026 setting out the Law Commission’s final recommendations to the Scottish Government and proposed legislation.

The full Scottish Law Commission Discussion Paper can be found here.

Zahra Choudhary

Zahra Choudhary

Dispute Resolution Team

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