On behalf of the committee, I welcome to our meeting Dr Douglas Robertson, of the University of Stirling, and Mr Alan Ferguson, a director of the Chartered Institute of Housing in Scotland. We are pleased to have them with us. I am sorry about the warm room temperature; it is a bit of a hazard of this venue. If we open the windows, we cannot hear one another. Many would deem that a blessing, but it might obstruct the process of getting through the work of the meeting. We hope that the fan might make a difference to the temperature.
Good afternoon and thank you for your written submissions. Both mention the proposed tenement management scheme—which the committee has touched on in previous evidence-taking sessions—particularly the proposal that the TMS would be a default scheme that would come into operation only when the title deeds of flatted accommodation are silent. The CIHS has a particular view on that, but I wonder whether the witnesses would care to comment on whether they believe that a default scheme is an appropriate road for the Executive to go down.
The institute's view is clear from the written submission and other information that we put together, which I hope that members have had a chance to look at. Our view is that what the Executive proposes is not the best way to have done it. I recognise that the majority of respondents to the consultation on the bill were in favour of the TMS. However, our view is that the bill is a missed opportunity to get a more consistent approach across the board, as there would still be a lot of inconsistency with the TMS. For example, a TMS could recognise that a roof is common. However, if it were so recognised, it should be common anyway. Our view is that the scheme property should apply to all. Therefore, the roof should be common to all.
Do you believe that there is an issue around the European convention on human rights in that forcing somebody to be covered by the TMS might potentially be a breach of the ECHR?
There are two points to consider. First, we are already doing what you suggest we might. By accepting that the TMS will exist where the deeds are silent or inadequate, we are already imposing on certain individuals. On the one hand, we are saying that that is okay; on the other hand, we seem to be saying that it is not okay.
It comes back to the issue of free variation, which the committee discussed at its previous meeting. My written submission tried to make the point that basic principles are required so that people buying into tenement properties have a clear understanding of what they are getting into. The committee spent a lot of time considering that at its previous meeting.
That would be very helpful for all new accommodation that is built; my concern is that the vast majority of accommodation in Scotland is older and will not fall into the new category. How can we ensure protection for people who live in properties whose title deeds are not necessarily silent—they say something—but fall short of what is being offered by the tenement management scheme? Those people may be the ones who lose out; they are the people who often come to see their MSPs because they are experiencing difficulties.
But you would accept the argument that, if we start tomorrow, or in 2005, all new properties would be covered, which might encourage other people to switch. Because of the pace of development in some parts of Glasgow at present, old flats will soon be in the minority.
I think that you appreciate, Dr Robertson, that we are trying to find out whether the tenement management scheme could be applied not as a default scheme but as a scheme of minimum standard. I take your point that we should start by applying the scheme to new properties.
The problem is whether people will actually use any of the provisions in the bill. What will enforce the use of the tenement management scheme if people choose not to use it? Much in the bill leads back to the sheriff court but, in my research with property managers, owners, local authorities and housing associations, I have not yet found anybody who has ever taken a case to court to solve a problem—because of the time and expense and because things do not get resolved. It is difficult to see how a voluntary scheme would have an impact; and although a statutory scheme might have a bit more clout, I think that the same problem would remain.
I might be asking you to go beyond your remit, but if the Executive decided to amend this bill to make the tenement management scheme apply as a minimum standard rather than as a default position, and to make it apply retrospectively to existing properties as well as to new properties, is there any reason why it could not do so?
Our position is that the scheme should apply to old and new properties, because it is about setting a standard and about trying to tackle disrepair in housing. Several obstacles exist, and Karen Whitefield mentioned one. I am sure that issues arise from human rights legislation. Owners need to be persuaded that they will not lose out. Some might lose out, but some will lose out even under the proposed scheme. Education will be needed to get across the reason for the scheme. Some opposition would be expressed, but our view is that if the scheme is just a default system, we will not tackle the existing disrepair in the private sector or change the culture to make people recognise that buying a property makes them responsible for its long-term maintenance and is not just a short-term investment.
Will the operation of the scheme as proposed in the bill present difficulties with who is responsible for assessing whether title deeds are insufficient and with amending title deeds? How will we engage with owner-occupiers so that they take up that right? If the scheme applied to everybody, perhaps the situation would be addressed.
There are some lawyers in the room who will know that amending title deeds in a tenement block would be nigh on impossible. Obtaining the agreement of all the owners and all the lenders to a new set of conditions or procedures would be a difficult task. The Title Conditions (Scotland) Act 2003 allows some conditions to be left to lapse, which leads to the default situation. That is where the default situation's strength lies. Amending title deeds in a tenement block after they have been set would be extremely difficult.
Who defines inadequacy, and what an individual can do to deal with that are difficult matters. As Douglas Robertson said, our evidence is that people are not resorting to the sheriff court, so what process will we use? The problem with the proposed system is that it does not go far enough and that it raises many questions about how it will be put into practice and about what an unhappy individual can do.
My final question is about the proposed default rules. Are you confident that they will cover every eventuality?
Probably not.
Will the rules cover most likely eventualities?
I will put aside our principled position to say that the rules need to be made to cover those situations.
Could we explore dispute resolution? Dr Robertson has said in his written evidence and today that he does not consider the sheriff court a useful mechanism and that people seldom take cases to the sheriff court because that is expensive and time consuming. You have suggested an Australian system.
It involves title commissioners.
Will you explain how they work?
The legal context is slightly different, but the system in Australia is similar to the commonhold system that was recently introduced in England. In Australia, all flats are held in commonhold. If disputes arise between owners or between owners and managers, the commissioner in the states where the system operates, such as New South Wales, has a time limit to deal with those disputes. If a more complex legal dispute is involved, the commissioner will pass that to the court to deal with.
You would have to ensure that the decisions were followed. How would a decision be enforced?
The parties agree to have the decision bound upon them.
So it is a bit like mediation, is it?
Up to a point. Some states in America insist that mediation take place before dispute resolution. I should emphasise that this is not my view; it is based on the evidence. I think that you are to hear from Neil Watt and others later this afternoon. I am sure that, if you ask them whether they have experience of taking people to court to deal with disputes over title provisions, they would say—as did the people to whom I spoke—that they would never contemplate using the courts.
There are two matters that I wish to clarify. In tenement title conditions, it was generally a standard provision for there to be an arbitration clause, and an arbiter would usually be appointed. That could be someone from the faculty of procurators or some other recognised individual. It has certainly been known for referrals to arbitration to be made in order to try to resolve things.
At the Lands Tribunal for Scotland?
No—before that. Many older tenement titles contained arbitration provisions for when there was a dispute.
Do you mean in the deed of conditions?
It could be in the deed of conditions, and it could be repeated in each individual tenement conveyance, but be binding on all the proprietors. That might explain why we do not necessarily find a great deal of evidence of proprietors invoking sheriff court actions.
That is probably why factors have said that people do not use that route.
I turn to the second point that I wanted to make to you. There is of course no guarantee that an alternative dispute resolution would be swifter or less expensive than a sheriff court action.
No, there is not. The concerns that were expressed to us in the course of our research related to the fact that the expertise of the sheriff in dealing with some of these matters, based on the existing law at the time, meant that decisions were often not what was expected. It was an expensive matter to go the sheriff court, and it took a great deal of time to get to that stage.
If nobody ever goes to the sheriff court, how do we know that?
Very few people have used the sheriff court recently but, taking into account the build-up of case law, the reason for the proposed legislation is to try to clarify the results of common-law decisions that have been made in the sheriff court. Those have been at variance—which is probably why it has taken 20 years to reach this stage.
I am anxious to ascertain exactly why you are supportive of an alternative dispute resolution mechanism. It was a sad fact of life that, in some areas of legal practice, people agreed to resort to arbitration to resolve various disputes, not just in conveyancing but elsewhere, because that was deemed to be cheaper and quicker than going to court. Subsequently, it transpired that, by the time people had paid for the time of the arbiter and of his clerk and for the necessary administrative and secretarial structure to support the arbitration, they had actually ended up with a more expensive alternative than going to court.
I can only give you the example of Australia, where there is a time limit for the title commissioner to deal with the matter. The parties are obliged to agree with their decision. If the decision is of a more serious nature, it is passed on to a court to deal with. That is built into the Australian system. As I said earlier, we are effectively dealing with two different legal systems. The issue is to do with getting a decision quickly, with people being comfortable about the decision being resolved within a short time. In most disputes, over who is responsible for a particular repair, if the matter is not resolved within a short time, then the nature of the repair usually becomes bigger and the costs become more problematic to all concerned. There is a case in Edinburgh in which a problem over getting such a matter resolved resulted in somebody trying to murder his neighbour. That person is serving time in prison. That is an extreme example, but it shows that frustration over trying to get decisions made under the existing system can be a problem.
Are you trying to tell us that, at present, there is no de facto dispute resolution?
There is in theory. From what I gather from my research—I can only go on what people have told me—it is very rarely used.
But you feel that going to the sheriff court should be a last resort, and that a more user-friendly mechanism ought to be in place.
As you suggest, mediation may be an excellent way to try to resolve the situation. The issue is situations where neighbours are at each other's throats, or where one person refuses to pay for work, while eight or 16 others are waiting for that person. It would be more than useful if a mechanism could be found to resolve such situations quickly. From what I was told in conducting the research, I know that the sheriff court is not an option to which most property managers or owners would necessarily resort. They may resort to it in a minority of cases, but that does not mean that some of the longstanding problems are resolved.
The Executive has not made any provision in the bill.
It has stuck with the standard provision, which is to pursue matters through the sheriff court. The issue is whether people feel there should be another mechanism that could allow disputes to be resolved, so that the public purse does not end up having to serve notice and then carry out work on default, then charge everybody else. There are other ways—as you discussed last week in relation to the City of Edinburgh District Council Order Confirmation Act 1991—to resolve matters, but the cost to the public purse is astronomical.
We have few mediation services at the moment.
The sheriff court should be the last resort. We should look at a number of different options, such as arbitration and mediation. We should have in place a number of other mechanisms that individuals can use to resolve disputes before going to the sheriff court. It is recognised that mediation can play a role, not just in resolving disputes, but in tackling antisocial behaviour and doing all sorts of things.
That is useful.
I am conscious of time. I ask members to be as brief as possible. If the witnesses feel that they can, it would be fine for them to speak alternately, instead of duplicating answers. If they have different views to express, we are happy to hear them.
Dr Robertson, in your research you refer to disputes and how they seldom go to the sheriff court. Did you find out how often there is a dispute when people are trying to perform a repair in a building? My experience as a local councillor is that that occurs very frequently.
The problem with the nature of the research is that we were talking to people who operate the system, as opposed to people who receive the service. However, you are completely right. You could not talk to anybody who has lived in a tenement without hearing about some problem that has had to be resolved one way or another. Often, other neighbours pay the costs of the individual who is not chipping in, just to get the work done. There may appear to be no way of resolving the situation, but it has to be resolved somehow. Most people find a way of doing that. That may be better, but not for the other neighbours.
I have a question on insurance. The CIHS submission states that it supports
Because it would be a better way of dealing with the situation. Lenders say that a borrower should have an insurance policy. The difficulty is that there is no policing or monitoring of that. The borrower can say that they have a policy, and they may have to show it once, but they never have to show it again. The issue is how we ensure that property is properly insured. Our view is that block insurance would be a better way of ensuring that. That was also the view of the housing improvement task force.
If there is common insurance, everyone will have to pay their share. What happens if one person does not pay their share?
That would be about the policing or the monitoring of the process. How could we ensure that people paid their share? One answer would be for lenders to play a greater role in ensuring that the property that they lend on is insured. Others, such as property managers, could have a role in ensuring that insurance is in place. There is an issue about what we do about an individual who does not come up with the money—but that relates to all the matters that we are discussing.
If there is a common policy and one person does not pay their share, the whole policy is negated.
That is the argument against having such a policy. However, our view is that the housing improvement task force is right to recommend a common policy. Given that we accept that, we must work out how such policies can be enforced.
Do you agree that such policies could not apply retrospectively to properties that had already been built, such as old tenements?
We could make a start, in relation to new properties.
It would depend on the arrangement. Block insurance policies are standard throughout the United States of America, because of the nature of the system. Owners associations are required to take out a block policy. Such policies might be a mechanism for the reinforcement of owners associations, which would be required to take out the policy.
Tenements are often above shop properties. If a shop property is part of a chain, the chain will have insurance, but the shop will be responsible for repairs to the property. There would obviously be various situations, but in such situations, how would shops be involved in a block policy?
I am sure that that would not be beyond the insurance industry, given its commercial ingenuity.
The submission from the Chartered Institute of Housing in Scotland mentions long-term maintenance funds and suggests that in existing tenements buyers should be obliged to pay into such a fund every time a flat changes hands, but that such payments should be discretionary for existing owners. Would that be equitable in practice? Would such an approach mean that new owners in effect subsidised the existing owners who had opted out of the system? Could the same end be achieved in a different way?
In an ideal world, as we have argued in a number of reports, maintenance or building reserve funds should apply to all properties, old and new. We recognise that there is a mixed response to that view: there is opposition but some people are convinced that the system could be made to work.
I take the point that we have to start somewhere and that anomalies will inevitably be thrown up.
We have tried to set out in our reports a basic way in which the system would work, but the issue is about working out the detail. The difficulty is that no one has said what would make a building reserve fund or a long-term maintenance fund work. We have tried to say that the resources would stay with the property, so that an individual coming into that property would pay for the property as well as for the individual amount of the building reserve fund, although there might be other ways of doing that.
We have had experience of this matter, which is why, up to a point, I disagree with the idea of sinking funds. In theory, they are a great idea, but under the old co-ownership arrangements—some of you might remember those—the difficulty lay in whether the fund was attached to the property or to the individual. As a result, when the fund was attached to an individual, as in co-ownership, people had to put in money to replace what was coming out. That became quite muddy.
That takes us neatly on to owners associations. The housing improvement task force recommended that such associations should be compulsory and I note that the Chartered Institute of Housing in Scotland is also supportive of that view. However, we cannot legislate for them. Is there an alternative way of encouraging them?
They can be encouraged through the use of draft constitutions. The Executive could ask Communities Scotland to draft constitutions that would be available for owners associations to use. Those associations could be encouraged if resources were found to fund them initially. Our research has shown that, where associations exist, owners take more of an interest in the maintenance of their property and the common property. If associations cannot be legislated for, however, we need to consider what would encourage individual owners or groups of owners to set them up.
Apart from the obvious enhanced interest of the owner, what would the other advantages be of owners associations? I know that we covered the ability of the owners association to take out a common insurance policy, but what other advantages would there be to that approach?
Our starting point is that we have to deal with existing disrepair and ensure that there is long-term maintenance of private sector property. That is in the public interest and in the interests of the Parliament and the Executive. Owners associations could play a role in changing the culture so that owners accept that they are responsible for their property. Along with the single survey, property maintenance logs and regular surveys, owners associations could help to change the prevailing culture in the private sector.
If owners associations were legislated for, how would we go about enforcing the obligation and what sanctions would there be if somebody refused to comply?
We have to try our best—and I hope that through the bill we will be able to do our best—to encourage owners associations, because there are many spin-off benefits, particularly in the governance of local areas. More people would become involved in thinking about how their area is managed and in interfacing with local government and other bodies to improve things—that is fundamental and goes much wider than property management. However, forcing someone to join an owners association is like forcing them to become a member of a community club or bowling club—I do not think that we can really force people to join. That is why I am a bit hesitant about the idea of compulsion.
That is helpful, thank you. My final question is on surveys. I was slightly nervous when I read that the CIHS was proposing that tenements should be surveyed every five years. What kind of survey did you envisage, given that they vary in scale and scope? Did you consider that there could be a substantial financial impact on home owners in tenements who are perhaps on low incomes?
We suggested those surveys for the same reason as we welcomed the idea of a single survey for buyers, not necessarily because it would deal with those who go after a number of properties and are not successful, but because it would set out the property's energy efficiency rating and condition and detail what works were required. The owner would therefore be transparent about their property when a prospective buyer came along. They would be able to show that they had surveyed the property and what work was required, what was outstanding and what was being done. The prospective buyer would have a lot more knowledge of the property's maintenance history.
Would you make those surveys compulsory or would you just encourage them?
In an ideal world, where we were committed not just to tinkering with the legal system but to changing the system of property management and maintenance, we would make them compulsory. On the other hand, we might well try to encourage them. That depends how far we are prepared to go and whether we see the bill as an opportunity to start changing things in this country.
The fundamental point is about the owner's rights and the responsibilities that flow from them. The bill will push those responsibilities a bit more, which is fundamental, but there is a danger in going too far and, in effect, determining how people spend their money. The difficulty is that, as a society, we might not want people to say, "I'm not putting any money into maintenance. To hell with it. If it falls apart, it's not my problem. The grants will come along and bail me out." We have moved away from that, but there is a danger of moving too far in the other direction and becoming too prescriptive. If the surveys are made compulsory, I might retrain as a surveyor.
I was going to suggest that myself. A surveyor might be a better option even than a plumber.
I have two short questions to ask before we leave the survey aspect. I suppose that it is possible that in two years six out of eight flats could change hands. Purchasers will have had their surveys carried out, so is it reasonable to impose a further cost on them for a whole property survey?
People do not get a survey; they get a valuation. That is not a survey.
It is called a building valuation.
It is just a valuation for the lender's purposes; it bears no relation to what most people would consider to be a survey.
Yes, but depending on the advice that the individual purchaser receives, they may in fact get a house buyer's inspection, which is far fuller. An increasing number of people have opted for that, because it is a fuller report.
Only 5 per cent of purchases in Scotland—and less than that within tenement properties—involve that option. In the main, there is a valuation survey.
Even if we go back to the valuation basis, the surveyor is still under a professional obligation to know why he arrived at the valuation figure. Clearly, if there is implicit within the tenement building an outstanding obligation for extensive repair, that would be reflected in his valuation comments. All that I am getting at is that a valuation still costs a purchaser money. If six out of eight people in a close have paid that valuation fee, bought their properties and are content, would a further survey not be another financial burden on them all?
I do not accept that a valuation survey is okay. That is one of the things that a single survey will help to turn round. We need to get away from the notion that it is okay just to get a valuation survey done and not to know the condition of the property.
The other expense that the Chartered Institute of Housing in Scotland has in store for flat owners is the mandatory appointment of a factor. Should it not be left to the proprietors to decide whether they want a factor?
I concur with that.
I take issue with Dr Robertson on that point. It is important that, as part of changing things around, someone should be there as the property manager. The owners might decide to take on that role, which would be fine. Equally, if someone is not prepared to take on the role or if the development is too big, a property manager can play a part, which would also have advantages. Although those of us who live in tenements get frustrated by the factor's bills that come through the door, the reality is that factors pull things together, co-ordinate them, chase matters up and get a contractor to come out to do work. At times, those tasks can be a pain, so there is a role for a property manager in trying to deal with that. As Dr Robertson said a few minutes ago, part of the issue is about ensuring that the property managers are accredited and come up to a standard, which is why we welcome the development of accreditation for property managers.
The housing improvement task force produced an interesting statistic. It indicated that a majority of people who had had a valuation survey carried out had then had to have subsequent work done, the average cost of which was of the order of £3,000 to £3,500. I cannot remember the exact figures, but I will dig them out and send them to the committee. That statistic suggests that, although most people thought that they were getting a survey, when they got into the property they discovered that all that they had got was a valuation.
As there are no further questions for our witnesses, I thank Dr Robertson and Mr Ferguson for coming to be with us this afternoon.
In evidence this afternoon, the Chartered Institute of Housing in Scotland and Professor Douglas Robertson from the University of Stirling both made the case that the tenement management scheme should not necessarily be based on default but should apply to everyone with title deeds. After all, the fact that the deeds might be silent on a matter would not provide the same level of protection as a tenement management scheme. As that point of view differs from your position, I am interested to find out why you think that the CIHS might have got it wrong and why you think that you are right to suggest that a default scheme should be introduced.
There should be a default scheme. The most important thing is to ensure that all properties have a form of management. It is essential that properties are properly maintained. After all, if we do not have a scheme to fall back on, we will end up back in the present situation, in which it is difficult to make repairs to buildings.
Do the other witnesses agree with that?
Yes. In fact, I would probably go one stage further and suggest that the existing deeds of conditions for modern properties—by which I mean anything built after about 1985 or the early 1990s—contain a set of management conditions that are superior to the tenement management scheme's provisions and work very well. However, I, too, think that we should have a default position.
What would you say to owners who have title deeds that are not silent but that perhaps do not offer the owners the same level of protection that they might have enjoyed if their deeds had been silent and the default scheme had been introduced? The tenement management scheme would have been able to offer those people some protection. Might they face problems in that respect? We heard from Dr Robertson that, although title deeds that have been written more recently might be more prescriptive, there is no real evidence that would allow us to assess how effective those title deeds are when it comes to ensuring that any major refurbishment or repairs that might be required to flatted accommodation are undertaken. What is your response to that?
The tenement management scheme is less about providing protection than about providing an opportunity for proactive maintenance by owners. It is clear that there are grave deficiencies relating to the absence of conditions in deeds and that that is stifling maintenance and repair to some extent. However, I am not convinced that what is proposed is protection for owners. My view is that it is the catalyst for owners to move forward.
Surely it is protection for those owners who want to do something about the necessary repairs to their properties but find that other people in the building do not want to have the repairs carried out. The scheme ensures that those repairs can be undertaken. As well as ensuring that there is maintenance of the property, which is good for everyone in that flatted accommodation, it offers some protection for those owner-occupiers who have encountered difficulties.
There is a danger in thinking that the Tenements (Scotland) Bill and the management scheme are a panacea for problems relating to care and maintenance. You have said that the management scheme will ensure that repairs will be carried out. Clearly, however, that is not the case. The bill will ensure that there is a process by which decisions can be made if those owners choose to make decisions. Further than that, it provides a framework whereby those owners can fund the maintenance of the property should they choose to do so. It would be wrong to assume that what we have before us will ensure that maintenance is carried out. It will enhance an owner's ability to maintain the property, but I am somewhat sceptical that it will ensure property maintenance to a much greater degree than happens at the moment.
Mr Donald, would you like to comment on the two issues that are being explored? What do you think about the principle of free variation of tenement management schemes with the title deeds, which I think is the RICS position and which Mr Watt and Mr Fulton have commented on?
It occurred to me that it is always open to the owners to agree among themselves that, in the absence of a proper scheme of regulation in the title, they could write themselves a deed of conditions. That is perhaps to hope for the best rather than to expect the worst of people in a close.
Mr Watt talked about the nature of a tenement management scheme. Do you agree with his view that, although the scheme might be a mechanism to make decisions, it is not an instrument to deliver repairs?
I am no longer a property manager, but I am aware that the real problem that faces people who want to do work to their tenement is reaching agreement and, more important, collecting the money that is required to pay for the work. In my view, the management scheme provides a lot of assistance to people who want to look after their buildings, but it does not have any draconian fallback position where the future of the building is definitely assured; there is no mechanism for compelling people to do more than the bare minimum, which is often not enough. The management scheme seems to be a great improvement on the present position. Although I would have liked something that went a bit further than that, there is a limit to what is possible as a change to the existing situation.
Section 3 of the bill deals with pertinents, which are essentially common parts. It provides that pertinents should be owned by the flats that they serve. I know that the RICS felt that flat owners should have an equal share in the pertinents; it preferred that to the formulaic approach of ownership being determined by which bits of the tenement the pertinents serve. Will you expand on why the RICS opposes a service-test approach?
I have not been the RICS's main mover in the discussion; I am here as a substitute and my knowledge of the Institution's thinking on the matter is therefore not complete.
If all owners had an equal share in common parts, could there be a difficulty in getting a majority to support repair to a part that served only one flat? Using your chimney stack example, let us assume that one flue to one part of the divided building remained operative and that the other flues were defunct.
If it was the law that that chimney head was common property, surely it would just be the bad luck of the person or persons who found themselves having to contribute to a repair to an item for which they had no use and the good fortune of the owner who still used the chimney flue.
Okay. Would you like there to be any changes to what is included and what is excluded from the definition of scheme property, which is covered by rule 1 of the tenement management scheme?
I am quite happy with the general thrust of what is common and what is not common. In my view, there does not seem to be much wrong with what is proposed.
I agree with that.
I would say the same—I agree with what Mr Donald says. To use the same example again, in most instances the chimney head, which is built out of the external walls, is part of the structure of the building. The case was mentioned in which there was one remaining flue. Under the proposal in the bill, if all the fireplaces were shut off, no one would own the chimney head. That would not be possible; someone must take responsibility, so the feature should be treated as common property.
Continuing with the theme of the tenement management scheme, we will move on to rule 3.4, about which both organisations expressed concerns in their written submissions. Under that rule, once owners have taken a collective decision to undertake a repair, they will be required to make a payment in advance for it. They will be asked to contribute their share of the money on the understanding that the repair work will commence within 14 days. If that does not occur, an owner will be able to ask for the money to be repaid to him or her.
I will deal first with what is required once the decision has been made and look at the actual cost. We are concerned that, if owners decide that a repair of a nominal value—for example, the cleaning of a gutter or the repair of a downpipe—requires to be done, it could be unnecessarily costly and time consuming for them to have to obtain three quotations. The association considers that a limit should be set—for example, £75—as a minimum figure for that requirement for quotations.
Do you think that having some deadline is preferable to having no deadline at all? I appreciate the fact that you would not want people constantly to have to start the process again and to give money back; however, although 14 days might be too restrictive, perhaps imposing a deadline of 28 days or six weeks would be better than leaving the process open-ended so that it might never reach a conclusion.
I agree that a timescale should be set, but it would need to be a minimum of eight weeks—preferably three months.
I am not sure that there needs to be a timescale at all. If the money was contributed by all the owners for the purpose and if there was some reason why the work was delayed, all the owners would be aware of that reason. If time went by to an excessive extent, an owner who was aggrieved about that delay and felt that the repair was never going to happen could possibly make some other provision by going to law for the recovery of the money that they had contributed for a repair that was no longer going to take place. I would ask why there should be a time limit on the repair at all. I do not think that a time limit is strictly necessary. Elsewhere, the management scheme allows the sheriff to determine whether money should be returned.
An owner who has entered into an agreement and taken a decision in good faith might want to regain the money that they paid out voluntarily on the understanding that repair work would be undertaken. If the only option open to them is to seek redress in the court, that will incur an additional financial cost. I am sure that they would much rather see the repair undertaken, with the guarantee that they would get their money back if it was not undertaken.
The position is circular. If the good payer pays in first and the bad payer pays in last, the good payer's patience might be exhausted before the bad payer makes a move. The good payer would wish to give the repair scheme every opportunity of success rather than be worried about the contribution that they have made, but perhaps that depends on the amount of money that is at stake.
I ask Mr Fulton and Mr Watt what the procedure is at the moment if a repair scheme is contemplated, raised with the owners and agreed, and contributions are invited. What happens? On what basis are contributions sought?
I am tempted to say that it is horses for courses, as it depends on the arrangement for the particular property. As a rule of thumb for property managers—although you should bear it in mind that we could be talking about owners who self-factor and owners associations that might also be in control of funds—there would be a limit of something like £50 per flat beyond which the property manager might try to collect funds in advance to safeguard the payment of the invoice to the contractor. Timescales are fully dependent on the wishes and requirements of the owners. Some of them may become frustrated at laying out their £50 or £100 for two or three months and, because property managers are ultimately only custodians of the owners' funds, if owners ask for the funds to be returned at any time during the process, we have an obligation to return them. I am not giving you a clear answer, other than to say that it is at the discretion of the group of co-proprietors.
I am inclined to agree with Mr Watt. Trying to obtain funds from non-resident owners can be a major problem, particularly in some larger developments. Although we can get the funds together in the end, that may take several months, and we do not want to end up having to return funds only to find that the money comes in from the non-resident owner a month or six weeks later.
Would instruction of the works be delayed until you were in funds for the total cost?
That would depend very much on the amount of money that was outstanding, because once we contract with a contractor to carry out the work, he expects to be paid for it, and if we do not have the funds, we cannot contract with him.
There may be circumstances beyond anyone's control—I am thinking of bad weather, for example, such as a big freeze, or a demand for tradesmen with which they cannot possibly cope. The tradesmen may have a date in their diaries to start the work, but circumstances may arise that are beyond anyone's control. Outside forces could easily cause a delay in a timescale of 14 days and if there was a history of trouble with the collection of funds, the door would be open after 14 days under the current proposals for someone who wanted their money back to ask for it.
Rule 4 of the tenement management scheme proposes that contributions to the cost of maintenance and repair should be equal, except in tenements in which the floor area of the largest flat is greater than one and a half times that of the smallest flat, in which case costs should be divided in proportion to floor area. Does the Property Managers Association Scotland agree with the views of local authorities, which have said that the Executive's approach is bound to lead to disputes between neighbours over access to calculate floor space? From your experience, do you think that such difficulties are likely?
I can see the potential for difficulty, particularly over getting access to measure floor area, but that is not insurmountable. What concerns me more than anything is the fact that a cost is involved in taking measurements, because a surveyor would have to be employed to measure the building and calculate the floor space. The surveyor would not necessarily need to get access to the flats to work out the floor area, but there would certainly be an additional cost.
Who should be responsible for that additional cost?
At the end of the day, the additional cost will be borne by all the residents in the property.
Is the problem not so much one of access as one of cost, which people will need to be made aware of so that they can factor it in?
Yes.
Does the RICS agree that the one-and-a-half-times rule could cause problems, given that the surveying profession has no agreed method of calculating floor area?
Yes. There is obviously a problem in defining a property's floor space. The practicalities of measuring a tenement with precision should not be underestimated, particularly if the tenement is at the magic margin, where it has one flat that has one and a half times the floor space of another. I would not like to be the person who, on a regular basis, is responsible for working out the area and being dogmatic about the size relationship.
The method of calculating the area requires three things: the taking of the size, the drawing of the plan and, thereafter, the calculation of the area. Errors and differences can arise in those three areas. No two surveyors who measure the same room will come up with the same answer—I hope that I have not shocked you too much by saying that. Variations will arise from the technique that is used and whether the surveyor rounds up or rounds down. Measuring the size of this committee room might be simple enough, but some tenements have boxed-in cupboards and chimneybreasts that have been plated over to give them a flush finish, which hides the space behind. All those problems could come to the surface when a flat is at the critical margin that was mentioned.
How often will that problem affect properties? Is it likely that there will be many cases in which the floor space of one property is one and a half times greater than that of the smallest flat in the tenement block? Have we any idea whether the floor spaces of tenements are generally similar in size?
The traditional tenement building that we all picture is a building of four or five storeys with two or three flats per landing. The one and a half times rule is not likely to be triggered in such a tenement. However, if a house is divided, with a larger flat upstairs and two smaller flats downstairs, that might be a more difficult case. Such non-standard tenements will be in the problem category. By implication, there should not be a huge number of such cases, but there will be some. I do not know how many, so I cannot answer that question.
How might the problem be overcome?
Way back when the Scottish Law Commission considered the matter, it was suggested that it was unnecessary to have any rule. Every owner has an interest in the building, so one might ask why every owner should not contribute equally. However, if one flat is much larger than another, that encourages the belief that it is fairer that a size relationship should kick in at some point. I cannot advise what the appropriate mechanism should be. If people have made up their minds that there should be a size relationship, they have to pick a number and one and a half is a perfectly good number. I cannot say more than that.
Following on from my questions about floor space, I have a question about how attic space is dealt with when floor space is being measured. What impact might attic space have on the frequency with which the one-and-a-half-times rule will be used? How likely is it that attic space will trigger the one-and-a-half-times rule?
I do not know, nor do I know whether anyone could give a clear answer to that question, but I can picture the kind of building that you are talking about, in which there is a ground-floor flat and a first-floor flat with an attic. There must be many such properties. If they were formed by conversion, one would hope that there would be something in the titles, but I think that we are talking about cases in which there is nothing in the titles. I do not know the answer.
My final question is to both the witnesses from the Property Managers Association Scotland. If you were to pick a figure, would one and a half be the right figure to choose?
As Mr Donald said, one must pick a figure, and one and a half times is not an unreasonable figure, considering the traditional nine or 12 flats in a tenement block; however, whether it is the right figure is another question.
I agree. I would like to add that we believe that the difficulties that will inevitably be encountered with gaining access and with two surveyors coming up with different measurements—to which Mr Donald referred—are worth the risk to ensure that a conclusion can be reached, rather than there simply being an equal share of costs. I think that we all feel quite strongly that an equal share is not entirely right where one flat is larger or a number of flats are larger. The starting point should be that there must be a mechanism to achieve a conclusion. There will be difficulties along the way, but such difficulties and risks are worth taking to achieve the result.
Would the witnesses from the Property Managers Association Scotland say something about dispute resolution? Previous witnesses thought that straightforward recourse to the sheriff court was perhaps not the best way to solve problems relating to disputes between owners about the cost of repairs and so on, and that there might be a role for mediation. In its evidence, the RICS said that it is quite happy with the use of the sheriff court, but do you have anything further to say about that matter?
The use of mediation would be ideal, but, unfortunately, we do not live in an ideal world and there will always be referrals to the sheriff court. As practising property managers, we try as much as is humanly possible to achieve agreement between owners, but there will always be disputes. If we can persuade owners to use mediation and it works, that is fine. The aim is to try to keep costs down, if that is humanly possible. Additional costs do not help when people have to spend their money on repairs and want to keep costs down.
Do you see your association as a mediator?
We try to mediate, as much as is humanly possible. In many ways, we are successful in that respect, as we get many repairs carried out to properties in which there are disputes. However, at the end of the day, there will always be people who will not be prepared to work with us, or even with a mediator.
I am not as strongly in favour of mediation because I presume that such disputes will arise out of the necessity or obligation to carry out maintenance and repairs and such obligations will be set out clearly in title deeds. More often than not, things will be in black and white and either people will have an obligation to maintain or they will not. If the obligation does not relate to maintenance, it might relate to incidental maintenance or improvement, which is another matter. When an owner signs his or her title deeds, they are agreeing there and then to maintain their property. I am therefore not convinced that mediation is necessary to convince someone that what they have signed up to do is what they should do—they will have already committed themselves to doing that.
I would like to clarify something. A previous witness—Dr Robertson—said that in his research he had found that nobody goes to the sheriff court because it is too difficult, time consuming and expensive. What is your experience as property managers of situations in which you have not managed to resolve disputes with owners within the property management structure? What happens? Where do such disputes go at the moment?
Let us take a situation in which a repair is required to a building. At the end of the day, there may well be a majority in favour of repair work, with a minority against. In some instances, the work might go ahead, but then the case is referred to the sheriff court because outstanding money requires to be recovered.
Have you had experience of that?
We certainly have.
Yes.
If the dispute is because the owners genuinely cannot agree on what should be done, given the title deeds, and you cannot get a decision at all, how is it determined?
Regrettably, in a lot of instances it is not a matter of disagreement; it is a matter of parties just not responding—full stop. That is probably the biggest problem. If we cannot get a response from certain owners, at the end of the day we have to go along with the majority.
At the moment, if all else fails, the parties go to the sheriff court. In your experience, has that happened?
Yes.
To be clear, we are discussing the payment of charges, and I think that Mr Fulton was talking about a dispute over the property manager's charges, rather than a dispute between owners as to what maintenance is required, which may have been your point, convener.
That was part of my question.
To return to my earlier point, if the title deeds are adequate or the measures in the Tenements (Scotland) Bill kick in, the issue will be clearly black and white. There should be no grounds for dispute: it is either a repair and maintenance item agreed upon by a majority or it is not. There should not be a case for debate as to whether work is carried out. The timing or the extent of the work and the level of specification may be a matter for debate, but not the principle of whether the work should be carried out. I am not often aware of two proprietors or two groups of proprietors taking such a dispute to the sheriff court. Apathy prevails, and the repair falls away and does not get carried out.
I agree. People do not generally take disputes to the sheriff court. It is when work has been carried out that the matter is referred to the sheriff court for the recovery of moneys.
But you said earlier that usually you can find a path through the difficulties, in terms of getting the proprietors' agreement to the repairs.
There is a path when there is majority agreement, and the minority then has to go along with the majority. As Mr Watt said, in most instances the title deeds lay down that if a repair requires to be carried out, it can be done with majority agreement, in which case the work will go ahead if the funds are available. In some instances, the work will still go ahead even if the funds are not available.
I want to go back to section 17 and the demolition of a tenement building. That section makes provision for how the costs of partial demolition of a tenement building should be allocated among owners, and provides that the costs should be borne equally, but only by the owners in the part to be demolished. Both sets of witnesses have expressed concern about that. Why are you unhappy about that provision, and how would you like section 17 to be amended?
The RICS's evidence is reasonably clear on that point. The proprietor who benefits from a demolition could well be the proprietor who is unaffected by it, if the bit of the tenement that needs to be demolished is the problem. There is an automatic conundrum if the benefiting proprietor does not have to contribute to the cost of removing the problem. The idea of a benefit arising out of a demolition does not seem to have been included as a concept—a demolition is always seen as a catastrophe.
Could you give us a concrete example of what you are talking about?
Demolishable concrete.
Yes—concrete or brick.
When Glasgow was full of tenements with pubs on their ground floors, a proprietor of such a public house would often wish the public house to remain on the site. He was usually willing to pay substantially to have the tenement removed, provided that he could keep the site, because the benefit to him was that his trade would continue. Although the homes would be gone, his property would remain. I was not in practice when that was being done seriously all over the place, but that is an example of how the proprietor of the bit that is left could be the end beneficiary of the process of removing the disrepair in the rest of a tenement.
That is unlikely to happen.
You asked for an example. I thought of that example in this room this afternoon.
A tenement is unlikely to be partly demolished.
Yes.
I had imagined that a tenement's top storey might be removed because of some problem. I understand the argument about the benefit to others who live in the tenement; perhaps they should pay part of the cost.
Is the concept not also one of common property and scheme property? We are talking about what is part of the scheme. Why should everyone not contribute to that cost?
I agree with Mr Donald. In the past 10 years, I have encountered a similar situation, in which a fire occurred in a tenement's upper floors, which had to be demolished because the building was old and refurbishing it would not have been economical and because the upper floors' structural stability was in question. The commercial people on the ground floor still had the benefit of the existing premises and continued to trade, and they will probably continue to trade for the next 10 to 20 years. They had the benefit and they contributed to maintenance, too. Such owners should have a share in the obligation and the right.
As members have no further questions, on the committee's behalf I thank the three witnesses for giving evidence, which has been extremely helpful.
Meeting suspended.
On resuming—
I reconvene the meeting by welcoming Martyn Evans and Jennifer Wallace from the Scottish Consumer Council. I am gazing anxiously at your nameplates to ensure that they correspond to what I have in front of me.
Yes.
I will kick off with a general one. I was interested in your suggestion that it would be a good idea to introduce an information strategy. What should be the main components of any such strategy?
We require such a strategy because the bill's definition of "tenement" is far wider than common sense might suggest and because the bill itself contains quite substantial changes in rights and responsibilities. As other witnesses this afternoon have pointed out, there is very little understanding and knowledge about this area of law.
As the Scottish Consumer Council was represented on the housing improvement task force, I am sure that the witnesses will provide us with valuable insights.
That is a very wide question. There is a significant problem with disrepair in our private housing, which is partly a product of the current system's complexities. The bill simplifies those complexities to ensure that making decisions is more straightforward.
Would you change or build on the current system of improvement and repair grants and, if so, how?
We would build on the existing system of grants. The housing improvement task force, on which I represented the SCC, made a series of quite complex suggestions about bridging the gap between affordability and obligation.
That is very helpful.
Communities Scotland might be the more effective vehicle in that respect. In any case, we want to build that capacity in owners associations. For example, we have been seeking to support and find funding for an embryonic group called the Scottish tenements group which, if it could work, would be a national voluntary organisation and would offer necessary services, build the necessary guidance and support local developments where it could do so.
In the fourth paragraph of the summary in your written submission, you helpfully explain your position on the tenement management scheme. However, in paragraph 18 you suggest that the Executive should consider in more detail how the mechanisms will be enforced to ensure the effective implementation of the tenement management scheme. I am interested to know your views on the application of the TMS. Who should be responsible for its application and, particularly, what sanctions should be imposed on those who do not comply with the TMS?
You touch on a very complicated subject. The mechanisms of the scheme set a framework by which owners can better agree to fulfil their collective obligations. If those owners cannot agree or are in dispute in some part, enforcement and sanctions become a moot point because they would be enforcing the sanctions against themselves.
Do you think that local authorities have the skills and the resources to provide a mediation service? I am slightly concerned that if we go down the road of accepting the proposals for the TMS and introduce legislation, it is possible that local authorities will then be left with the difficulty of trying to provide mediation and not being able to deliver it.
I agree. I did not mean that local authorities should provide the service themselves; they should facilitate it.
Section 4 provides that rule 2 of the TMS should apply—that decisions should be taken by a majority. You suggest that, even where title deeds give some owners a greater say in decisions, that should be put to one side, all decisions should be taken on a majority basis and everybody should have an equal right to be part of the decision-making process. Do you think that there are any problems with that breaching the ECHR?
We see clearly that there is an argument that that might be the case. In this area, the argument is fairly overwhelming against changing ownership and payment relationships, but we think that there is an argument in favour of considering the balance of interests in decision making. Under the Title Conditions (Scotland) Act 2003, as we understand it, a majority of owners can apply for a change in their title conditions anyway, so if there is an ECHR issue with what we suggest, there must be such an issue under that act already. There is an argument for what is proposed, but our argument is that, as is pointed out in the policy memorandum, the unanimity rule is the fundamental cause of many of our problems of disrepair, and that aspect of the tenement management scheme should therefore apply to all. Of course, there is a counter-argument, and people can make that argument. However, after careful consideration of the balance of interests, we believe that majority decision making should be made a requirement in all cases.
I appreciate that you understand that there is a counter-argument, but it strikes me that when title deeds are not silent on the issue but are explicit, somebody may have a greater say when it comes to the decision because they also have to pick up a greater cost for any repairs, particularly if a commercial property is included in the tenement. How do you address that potential imbalance to ensure that the property owner who might have to bear a larger burden than other property owners does not feel that he or she is being unfairly treated in the decision-making process?
They may feel that that is the case, but there are other provisions in the bill—relating to the apportionment of roof space, for example—which change relationships. The bill itself does not take a consistent approach to not changing existing obligations. Somebody could feel aggrieved, but the public policy issue is whether the repair will be done at all in the circumstances that you have described. We are trying to find a reasonable mechanism for such cases, with the caveat that people can appeal against an unfair decision to a judicial body. We suggested that there could be mediation, but the bill says that appeals would be made to the sheriff court. If an owner felt that it was unreasonable to proceed, and if that owner was in a minority, he or she could still take action.
Quite a lot of the things that I was going to ask about have already been covered in your answers to Karen Whitefield. However, I want to be clear about how you see the role of mediation. Should it be used only when there is a dispute about the management of the tenement and not at the other end of the process, when it comes to the matter of payment once the repairs have been made? Do you think that it would be perfectly appropriate to go to the sheriff court if a repair had been done and six out of eight owners had paid up but the last two had not, or do you see a role for mediation there as well?
We see a role for mediation there. Our experience in other jurisdictions and our observations in Maryland in America have shown us that mediation can work. We are not saying that we should cut out the sheriff court. We are saying that mediation, if offered, can often be successful in maintaining relationships between people who live and work in close proximity. People still have to agree either that they will give up their right to go to the sheriff court or that, if they cannot resolve the dispute or are not happy with the resolution, they will take it to a point of decision making where neither party can get out of the result. We would not rule that out at all, because we have seen it operate successfully in complex relationships involving significant amounts of money.
We heard evidence from previous witnesses who said that, because it was usually perfectly clear in people's title deeds what their responsibilities were, it would not be extremely complicated to take matters to the sheriff court. They said that decisions could be made quite easily in the sheriff court and they asked what the point of an alternative course would be.
Our evidence suggests the opposite. People are fearful of going to the sheriff court because of cost, delay and complexity. Even if those problems do not really arise, there is a perception that that is the case, so people will not go easily to a court—to the sheriff court in particular—to resolve their disputes. The consequence is a high amount of disrepair in properties. The evidence is not to be sought in the number of people who go to the sheriff court, but in whether there is significant disrepair in private homes in Scotland. The housing improvement task force said that they were in a very poor state.
It has been suggested that mediation could be just as time consuming and expensive as going to court.
I have heard that that is the case for arbitration. We have evidence that mediation is not as expensive as going to court. Of course, it can be expensive, long, delayed and complex. However, that is very much in the hands of the parties. I can speak only of the evidence that we have published, which indicates that people have found mediation extremely valuable. We can say that with some confidence, because more and more businesses are using mediation to resolve their disputes. If businesses found it more costly to use mediation, they would not do so. They find that mediation helps them to maintain their business relationships and is more efficient. That is not true in every case. I am not saying that mediation is a panacea, but it is an option that should be pursued and supported as a more appropriate way of resolving civil disputes.
In your evidence on insurance, you welcome the general position that has been taken in the bill. However, you want the Executive to provide further guidance on what insurance should cover. Can you give us examples of the sorts of things that the Executive should include in further guidance notes on insurance?
We are not in favour of common insurance, which was the position of the housing improvement task force. We think that mitigating risk is an individual responsibility. This is a very complicated area. As members well understand, if someone does not mitigate their risk in a common tenement, the risk may be higher. We do not suggest that guidance should be included in the bill, but it should indicate the kind of circumstances in which owners should ask insurance companies to mitigate risk. Such circumstances could include the risk that one of the common owners is not insured or is underinsured or that a co-owner has falsely declared something on their insurance that may invalidate it and increase the risk of other co-owners.
As there are no further questions for the witnesses, on behalf of the committee I thank them for their evidence.
I would like to make one quick point, which concerns the issue of costs to owners—the transfer of costs from an existing owner who sells their property to a new owner, when the former has carried out a repair. The committee has discussed that issue. We want to put on record the fact that, on balance, we think that it is right that that provision is included in the bill. It will protect other existing owners who have agreed to have a repair carried out and have paid for it. If there was not joint and several liability, existing owners would have to seek recompense from the departing owner, rather than from both the departing owner and the incoming purchaser. We recognise that there is an element of rough justice in that but, as you raise the point, we would like to say that we agree with what is in the bill.
Thank you for that clarification and, again, thank you for being with us this afternoon.
The only thing that we would like to say, briefly, is that our focus is on certain parts of the bill rather than all of it. We gladly leave some of the detail on conveyancing and so on for other people to pursue. As local authorities, our main interest is in the organisation and management of common repairs and in how they can be improved. There is not a unanimous view across all authorities, but there are certain common themes that we want to put forward. If you want to ask us about esoteric things such as air space and mid points, we will—
Are you going to disappoint us with your taciturnity?
We will.
We shall try to live with that.
We are trying to simplify the entire process as much as possible. We understand that there are difficulties and consequences for whichever scheme is arrived at, but the confusion that reigns in the minds of many owners and people who are involved in the maintenance of tenements is considerable. The end product of the scheme, if it is to be an improvement, should be a simplification of the process that everyone can easily and readily understand.
On the relationship between pertinents, as defined in section 3 of the bill, and scheme property, as defined in the schedule, do you think there is a need for equal sharing of pertinents by flat owners? Under the scheme proposals, all flat owners would be liable for major structural repairs.
If owners are enjoying the use of the same, it is only fair for owners to pay for them.
In your written submission, you indicate that there is a range of views among local authorities about the tenement management scheme, particularly on when it should apply. The committee has heard varying views on the matter. Earlier today, our witnesses from the Chartered Institute of Housing in Scotland made clear their view that the tenement management scheme should be a minimum scheme that should apply to everyone and which should override title deeds, whether or not the deeds are silent. What is the majority view of local authorities on that point? What are your general views on the tenement management scheme, in particular in relation to situations in which title deeds are silent?
There are general views on some aspects of the bill. For example, there is a general view that majority decision making should apply to agreements about maintenance and to the appointment of property managers. However, there is no majority view among the authorities that the tenement management scheme should always take precedence over titles. The City of Edinburgh Council and a minority of local authorities took the view that the scheme should take precedence over titles, but that people who want their titles to prevail should be given the opportunity to request that—I suppose that that approach would reverse the presumption in the bill. There is no general view that the whole scheme should take precedence over titles.
Edinburgh has considerable experience in dealing with tenemental property, because tenements comprise much of the accommodation in the city. Did the local authorities that held that minority view within COSLA tend to have a slightly disproportionate representation of tenemental property in their areas? I assume that some of the rural authorities have fewer tenemental properties than, for example, Edinburgh or Glasgow has.
Ron Ashton is just checking his notes so that we can be sure before we commit ourselves on that.
My answer is yes and no, if that does not sound too political. Undoubtedly, the authorities in the larger cities in which there is a predominance of tenements tend to have a rather stronger view on compulsion than other authorities have. However, North Lanarkshire Council was clear in its view that the TMS should be a default. There is a mixture of views as a result of different local practice. Practices differ, even on titles, in different parts of the country, as do experiences of management of tenement properties, particularly those that are in mixed ownership. The strong view on compulsion is widespread throughout the country; it is not concentrated in certain places.
In Edinburgh, we have got round the issue through the statutory notice system. However, the disadvantages of the system are that it is imposed on people and it often comes late in the process. We want to encourage owners to take action sooner rather than later because that is better for everybody and, apart from anything else, tends to be cheaper than waiting until there is a real problem. We have asked why so many people use the statutory notice route and we think that part of the reason is that people find it difficult to deal with the titles.
Is the Executive's definition of scheme property right or should something be added to it? Angus Council has suggested that chimneys should be included in the definition. Are you content with the definition? If not, what should be added to it and why?
The definition is a good starting point, but we must discuss the detail as the bill proceeds and as the regulations under the bill are produced. Angus Council has strong feelings on the issue because we have had many difficulties with chimneys and how they are covered in titles. Many of the definitions require close working in the longer term between local authorities, other parties and the Scottish Executive to ensure that the regulations are clear. We come back to the point that the scheme must be clear so that everybody knows what is going on, what the definitions are, what is covered and what can be done.
Rule 1.5 of the TMS makes provision for maintenance and incidental improvements of tenement buildings. COSLA and Angus Council have suggested that that provision should be made for improvements that are not incidental. What kind of improvements do you envisage, and what would you like the TMS to cover?
It is often useful to give specific examples. The example that we have used in this context is installing a door-entry system where there has not been one before. What would normally be regarded as an improvement is now seen as the modern standard for a stair front door. It is not simply a case of replacing the old door to put in a door-entry system, or the repair or maintenance of what is already there. The work has to be done to a standard that would be widely recognised as desirable and—probably—necessary. If it is possible to do that by majority decision making, we think that that would be hugely beneficial to many stairs.
Will there be an issue about getting the balance right? You are right that most people want their properties to be kept up to a good standard, but there might be a situation in which low-income families want to contribute to the improvements, but cannot afford to do so at the time. How would you ensure that any additions to the scheme would not be so draconian that they might disadvantage such people who have just managed to buy their property and no more?
One must think about people's quality of life. A prime example is that one might want to improve the fabric of a building, but not necessarily at huge expense. Local authorities sometimes get a bad name for having grandiose schemes that cost thousands and which people cannot afford. We are not talking about that; we are talking about implementing relatively simple and easy schemes, which will meet housing quality standards that we are all in favour of raising, immaterial of the sector.
We are sensitive to the possible risk that so-called improvements, as currently defined in the bill, could be imposed on people who cannot afford, do not want and do not see the need for such improvements, particularly when a local authority or registered social landlord is the majority owner.
Liability for repairs under the tenement management scheme will normally be apportioned evenly among owners unless a flat has floor space of more than one and a half times the floor space of another property. Do you think that there will be problems with that definition? Is the choice of that differential correct?
To be perfectly honest, there will be a problem regardless of what formula is used. There is no panacea. Although the use of a clear-cut differential allows everyone to see what is happening, problems will be caused at the margins in situations involving the calculation of the nearest square foot and so on. There will be all sorts of complications involving questions of who has measured what and in what way the measurements have been taken. However, those problems will arise only where there is disagreement. As Councillor Gilmore said, we need to ensure that people sit down and agree on what is the best way forward and what is in the interests of the block.
If you try to make laws based on the most unusual situation that you can think of, you will end up with some pretty complex laws. The advantage of the arrangement that we are discussing is that it is relatively easy for most owners to understand. It is not based on some obscure provision from the past that people find baffling. For example, some people's obligations are expressed in terms of feu obligations and feu duty payments, which are long gone.
Earlier this afternoon, the Scottish Consumer Council made strong representations to us about the need to enforce the TMS. I think that COSLA has similar concerns. Who should be responsible for enforcing decisions that are made under the TMS? How should such decisions be enforced if there is a need for sanctions against those who fail to comply with a decision that has been taken?
Is the question how payment by other owners should be enforced?
Yes.
There must be better systems for that. We are concerned that requiring people to go to court to recover payment from other owners will mean that the process is quite complex. Our local authority has the power to impose a charging order so that those who refuse to pay up are eventually required to do so. It is important that we have a simple system whereby the money can be obtained relatively painlessly once a majority decision has been achieved.
I agree. People tend not to go to court because of the cost, complexity and timescales that are involved. Any system must be simple, easy for people to understand and, ultimately, enforceable. The hope is that people will reach agreement initially, as people should get into these situations only where there are real problems. There needs to be mediation and arbitration to move the system forward.
I welcome Sheila Gilmore to the committee. It is nice to see you again.
The problem arises from the present state of many of the titles. People either do not know what the titles say, or they cannot fathom what the titles say, or, at best, the titles say that decisions on the property should be unanimous.
So, do you think that majority decision-making rules should be extended to all tenements?
Yes—on those two particular issues that you mention.
Do you mean not only for the TMS, but for all tenements?
Yes.
On dispute resolution, should the Executive have provided in the bill for referral to mediation services, or do mediation services not exist throughout Scotland? If provision were made in the bill for referral to mediation services, would that be an empty gesture because the mediation services do not exist? Could local authorities have a role in mediation?
Mediation is often put forward as being the panacea to all ills. We have in Edinburgh a mediation service that conducts the whole range of mediation. The service deals sometimes with disputes over the kind of issues that we have been discussing, but it probably deals much more with neighbour disputes and disputes about noise. In theory, mediation is available as a tool for disputes such as we have been discussing, but I do not know whether existing mediation services could take on a huge amount of such work.
Does that answer your question?
Yes—to a certain extent. Some people have said that such disputes are neighbour disputes and so should be covered by mediation. Instead of people in a stair applying for a statutory order for a repair, they could apply for mediation.
There are various levels of mediation: there is binding mediation as well as voluntary mediation, so there are various ways of dealing with such matters.
Have we covered members' questions on insurance?
We have covered two questions in particular, but there is one question that I want to ask, on a subject on which COSLA's written submission is silent. That is the issue of improvement and repair grants. The housing improvement task force made a series of recommendations that covered the financial position of low-income flat owners and called for a range of revised criteria, which is not necessarily a matter for legislation. Does COSLA or the City of Edinburgh Council have a view on what would be required? Would you build on the improvement and repair grants, or should there be something different?
There is a need for further legislation and guidance both to empower and, to some extent, to finance that. We are especially interested in looking for alternatives to the traditional grant mechanism and in considering whether local authorities should have a role not only in assisting people in getting loans, but in providing loans or setting up some sort of organisation that can provide them.
I have a question for COSLA, which represents 32 local authorities. Do you think that there are any omissions from the bill?
We represent 31 local authorities at present.
I am sorry.
The bill is a pretty good piece of legislation that has been a long time coming. I first started to examine the matter with a Scottish Law Commission report in the late 1970s, when I started work. I am glad that we have got to where we are and I want the bill to be delivered.
Is there anything missing from it?
We are disappointed that the encouragement of owners associations, which was discussed in some of the early consultation on the bill, has dropped out of the bill. I understand that that is because it was considered to be outwith the powers of Parliament because it was a reserved matter. However, I would hate to think that that would forever be an obstacle to dealing with the matter. It is a technicality—which has, perhaps, to be overcome—that owners associations are regarded as business organisations, which are a reserved matter.
I have a tiny comment to make rather than a question. Today we have heard about a variety of means that are perfectly within our scope by which we could encourage owners associations. Therefore, I would not be willing to wait for more legislation; we can do something practical now.
As there are no further questions, on behalf of the committee I thank Councillor Gilmore and Mr Ashton for being with us this afternoon. Your contribution has been most helpful.
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Annual Report