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STEWARDSHIP AND RESPONSIBILITY: A Policy Framework for Private Housing in Scotland

CHAPTER FOUR: FACILITATING COMMON REPAIRS AND MAINTENANCE

INTRODUCTION

255. Almost 400,000 dwellings in the private sector (approximately 25%) are flats where there is some degree of shared responsibility by owners for the maintenance and repair of communally-owned parts of the building such as roofs and common stairs (HITF, 2002). In addition, many owners of flats and, in some cases, houses have a shared responsibility for the maintenance of common open spaces.

256. However, the ability of owners and local authorities to ensure the proper repair and upkeep of communal parts of flatted buildings and communal open spaces is constrained by weaknesses in the civil law framework. The first report of the Task Force noted a number of significant problems with the current arrangements as they operate in practice. It concluded that many people become flat owners without understanding their communal rights and obligations; that often there are no formal and continuing arrangements for owners to get together to make decisions on communal repairs and maintenance; and that recovery of costs from obstructive owners is a continuing problem. We have borne these conclusions in mind in considering our policy recommendations.

257. Such problems generally affect older property titles while the title deeds for modern flatted developments contain more comprehensive provisions relating to communal repair and maintenance. We report in the next section on the outcome of research commissioned by the Executive to get more precise information on what arrangements are included in modern title deeds.

258. This chapter aims to identify more effective mechanisms to facilitate, encourage and, if necessary, require owners to undertake communal repairs and maintenance. We have developed six criteria on which effectiveness must be judged:

• Decision making: the extent to which there are mechanisms for getting agreement between the owners on what work needs to be done and when it should be carried out
• Cost allocation and payment: whether there is an agreed and understood basis for deciding the respective contributions from each of the owners with an obligation to contribute and whether there are mechanisms for ensuring payment so that the necessary work is not frustrated by the unwillingness of some owners to contribute to meet their share of the cost
• Management framework: whether there are arrangements for managing the property so that communal repair and maintenance requirements are identified and contractors appointed and paid
• Knowledge of responsibilities: whether there is clear understanding by owners of the extent and nature of their responsibilities for communal repairs
• Ownership identification: the extent to which owners wishing to undertake communal repairs and maintenance know how to identify and contact other owners, particularly absentee owners and landlords, to discuss the work that needs to be carried out and to secure their contribution to the total costs
• Building insurance obligations: whether there are adequate arrangements for insurance of communally owned parts of the building.

BACKGROUND

259. The responsibility of individual owners for communal repairs and maintenance is either set out in their title deeds or if the title deeds are silent, determined according to an area of common law known as "the law of the tenement". The title deeds set out the "real burdens" relating to communal repair and maintenance imposed when the house was originally built and which remain when the house is sold on.

260. Where there is an explicit provision in the title deeds, this frequently specifies that decisions can be made by a majority of the relevant owners with each owner having an equal say. Other arrangements can be found, for example, a requirement for 75% of the owners to endorse proposals for repair and maintenance work. Where the title deeds are silent, the common law requires all owners to consent before work can go ahead.

261. Similarly, where the title deeds are silent on responsibility for roofs and solum, the common law holds that the owners of flats at the top floor of tenements are solely responsible for the maintenance and repair of the roof and the owners of the ground floor flats are solely responsible for the solum.

262. The apportionment of costs for communal repair and maintenance work is normally set out in the title deeds. In the past, apportionments were often allocated according to rateable value or, possibly, feu duty payments.

263. The law in this area has been reviewed by the Scottish Law Commission (SLC) with its proposals for reform of the law on "real burdens" (SLC, 2000) and the law of the tenement (SLC, 1998). These proposals have formed the basis of the Title Conditions (Scotland) Bill that, at the time of writing, was before the Scottish Parliament and a draft bill prepared by the Commission, on the law of the tenement (the Tenements (Scotland) Bill). The Executive has indicated that it intends to introduce this draft bill and we recommend that, subject to the following considerations, it does so at the earliest opportunity. We have taken account of these legislative proposals in considering our own recommendations and, where appropriate, these are referred to in the discussion below.

264. Modern title deeds reflect a better understanding of the implications of communal living arrangements than older deeds. We do not have detailed information on the overall position but the research commissioned on the title deeds for modern flatted developments, based on a sample of 50 modern title deeds covering developments built over the past 20 years (Flint, 2003) suggest that:

• decisions on repair, management and maintenance could be made by simple majorities of all owners in between 80% and 90% of cases. Some modern title deeds did, however, require unanimity
• almost 90% of the title deeds required the use of a property manager appointed initially by the developer with the owners themselves taking on responsibility for subsequent appointments
• there was provision for an owners' association in about 25% of the title deeds that were examined and almost 60% of title deeds included formal requirements for calling meetings of owners
• just over 10% of title deeds for the developments sampled, made provision for contributions into a non-repayable sinking fund although almost 60% included a provision that when a house was bought, a one-off contribution was made into a float
• in almost 90% of the deeds examined, costs were split on an equal shares basis.

265. As well as the civil law responsibilities of owners, local authorities have responsibilities and powers to intervene to require communal repair works to be carried out when owners have failed to do so. Two different traditions have evolved. Most local authorities only serve repair notices or improvement orders where there are serious failures that need to be addressed. The current mandatory entitlement for owners to receive grant assistance in such circumstances has constrained the use of these powers for communal repairs and maintenance. The second approach, exemplified by the City of Edinburgh Council's use of local legislation, allows intervention at an early stage after complaints by some owners that they cannot get other owners to agree to tackle a particular repair problem. These provisions include a power to serve repair orders on all the owners, without consequential entitlement to grant. If owners fail to respond to the order, the council will instruct the work and re-charge the cost to the owners, including an administration fee.

266. We now consider improvements to the civil law framework and to the role of local authorities in both encouraging owners to undertake communal repairs and maintenance and as a possible backstop to require works when the normal arrangements break down.

MAKING DECISIONS ON COMMUNAL REPAIRS AND MAINTENANCE

Proposed changes to the common law framework

267. Where there is no explicit provision in the title deeds, the requirement for unanimity which can allow one dissenting owner to effectively block work from going ahead is a long-standing, recognised weakness which the Title Conditions and Tenements Bills seek to address. Both effectively provide for majority decision-making in this situation. The Title Conditions Bill provides that a majority of owners who are subject to a burden in their titles obliging them to contribute to the cost of repair and maintenance will be able to decide that work needs to be carried out, instruct or carry out such work and require that each owner deposit their share of the estimated cost. Similarly, the Tenements Bill provides for a majority to instruct and carry out communal repair and maintenance work and also appoint a manager and delegate to the manager, the decision that repair and maintenance should be carried out (up to any specified cost threshold). We endorse these proposed provisions. Their implications for cost recovery are discussed in the sub-section on funding communal repairs.

268. We also considered whether the civil law framework should be amended to impose a requirement for majority decision making on all titles for flatted blocks and other developments where there are communal repairs, irrespective of the existing specifications in those deeds. While majority decision making is often the right approach, we recognise that in some circumstances, other arrangements might be justified. The SLC in its report on the Law of the Tenement (SLC, 1998) suggested that 'no general rules could provide solutions which apply with equal appropriateness to every case' and endorsed the principle of "free variation", i.e. that developers should be able to draw up title deeds to meet their requirements and first and subsequent purchasers have, by agreeing to purchase the property, entered into a contract on that basis.

269. We endorse the position of the Commission as set out in the Tenements Bill and note with approval that the Title Conditions Bill does provide new and easier ways for owners to change their title deeds, for example, to provide for majority decision-making should they wish to do so.

Owners' associations

270. An agreed and understood basis for decision-making on common repairs and maintenance is essential, but we also believe that some formal arrangement for owners to get together on a periodic basis would facilitate decision making and encourage them to take a planned view about maintenance requirements rather than merely reacting to particular problems. Owners' associations can also provide a mechanism for overseeing the work of property managers and for making decisions on the use of any reserve or sinking funds.

271. At present, owners' associations are relatively uncommon in older blocks of flats but as the research on modern title deeds found, are more often found in newer developments. It would be impractical to try to legislate to require all existing owners to establish owners' associations but we do believe that it should be the norm for new residential developments. We recommend, therefore, that there should be an amendment to the civil law framework (possibly by adding a new provision to the Tenements Bill) to require all title deeds for new residential developments, where the owners are subject to burdens relating to communal repairs and maintenance, to make provision for the establishment of an owners' association.

272. It should be for the developer to decide what form of owners' association is appropriate to the development in question but, in general, there should, as a minimum, be a requirement for a constitution with provisions for annual and other meetings, specified voting rights and powers to appoint a property manager if they should wish to do so. It would also be important to allow the owners' association to delegate decisions to any property manager. There would need to be a minimum threshold where this requirement would not apply and we suggest that this should be blocks with less than eight flats. Given the possibility of exceptional cases where an owners' association would not be sensible, there should also be the opportunity for developers to apply to the Lands Tribunal to have this requirement set aside. We also recommend that the Scottish Executive should seek to provide advice for developers on good practice in setting up owners' associations and advice and information for owners on taking part in any owners' association.

273. Local authorities should actively promote the establishment of owners' associations in existing blocks of flats, particularly where they are directly involved in instigating repair and maintenance work, for example, in the proposed Housing Renewal Areas. In such cases, the establishment of an owners' association should be the norm and the aim should be to encourage this to continue after the major renewal work has been undertaken.

274. We recommend that local authorities should have the power to provide modest grants for the establishment of owners' associations both in Housing Renewal Areas and, more generally, when there is a need. These powers could be used in conjunction with our proposals to give local authorities powers to require owners to produce maintenance plans as proposed in Chapter Five.

Community mediation

275. In some cases, groups of owners may find it helpful to get outside assistance to resolve disputes about work that needs to be done or, indeed, on respective contributions to the total cost. The first report of the Task Force noted there were no specific arrangements in place for the mediation of disputes between owners although we understand that mediation has been successfully used to resolve issues with regard to shared responsibility for repairs and maintenance. There is an established network of community mediation services available in Scotland (although not in all parts of Scotland) for resolving other forms of neighbourhood disputes. Information and support to local schemes is provided through Safeguarding Communities and Reducing Offending (SACRO) (with Scottish Executive funding) and the Scottish Mediation Network (SMN). We recommend that the Scottish Executive should give further consideration to extending the scope of these mediation services to include disputes between owners on common repair and maintenance matters. A key issue is whether it is necessary for mediators to have technical building training and expertise. If the conclusions of this initial review are positive then we would wish to recommend that local authorities encourage community mediation for this purpose at the local level and that the Scottish Executive should provide funding to extend the work of SACRO and the SMN to support local community mediation groups in providing this additional service.

Intervention powers of the local authority

276. There will always be cases where owners decide not to go ahead with the necessary work and there is a clear public interest on grounds of public safety, protection of the environment and damage to neighbouring buildings for ensuring that the work is carried out. In these circumstances, local authorities have a clear responsibility to use their powers to take appropriate action. Relevant powers could include the repair notices, improvement orders and maintenance plan notices described in Chapter Five.

FUNDING COMMUNAL REPAIRS

Apportionment of costs

277. It is not uncommon for title deeds to be deficient in some way because, for example, they fail to provide for 100% of the cost or for the maintenance or running costs of a particular facility such as an entry phone system or a common central heating system. The Tenements Bill would resolve the problem of silent, incoherent or otherwise deficient title deeds by substituting the provisions of the proposed Tenement Management Scheme. This provides for equal contributions except where the floor area of the largest flat is more than 1 ¹₂ times that of the smallest when costs are divided in proportion to floor area. We welcome the thinking behind these provisions although we have some sympathy with the view that equal contributions should simply be the norm, irrespective of differences in floor area since this would make the scheme much easier to operate.

278. We are aware of problems that arise where the existing allocation of costs seems, prima facie, inequitable, for example, where the full cost of roof repairs is the responsibility of one or two owners. This can inhibit repairs being carried out as owners in such a position are likely to refuse to agree to the works proceeding or to paying their share of the costs if it does proceed. One way of overcoming this would be to have the general formula for the apportionment of costs (equal shares) in the Tenement Management Scheme applied to all tenements and other residential properties with communal and shared obligations, irrespective of the provisions in the title deeds.

279. However, there are also strong arguments against simply riding roughshod over the existing title deeds. Owners will have bought their flat, at least in theory, in the knowledge of the share of costs allocated to them. In many blocks of flats there is a mixture of commercial and residential properties and the commercial properties may quite reasonably be required to pay a larger or smaller share than the Tenement Management Scheme would suggest. The provisions in the title deeds may also simply reflect an agreement between the owners.

280. Whatever the justice of the present arrangements, it is unlikely that those owners who would be required to pay more would welcome the change and it is possible that an interference of this nature in property rights by the State would, in the absence of compensation, conflict with the Human Rights Act 1998. Since compensation could be prohibitively expensive, we decided, on balance, not to support any change to the status quo.

Recovering costs from owners

281. In reality, whatever the civil law framework says about the allocation of responsibility for meeting the costs of communal repairs and maintenance, some owners and property managers may be unwilling or unable to meet their share of the costs. Providing the decision to carry out works has been made in accordance with the title deeds (or, in future, the default provisions in the Title Conditions and Tenements Bills, if these become law), the cost of the work can be recouped from non-compliant owners by application to the Sheriff Court and subsequent normal debt recovery action.

282. In practice, however, owners and property managers may be very reluctant to go ahead on the strength of normal debt recovery procedures. Indeed, it is usually the case that major works will not go ahead unless the necessary funding is provided in advance and this is why the proposed default Tenement Management Scheme allows a majority of owners to decide to require each owner to deposit their share of the cost in advance. Other practical solutions are, therefore required.

Attaching debts to the property

283. One particular problem noted in the first report of the Task Force is that the law requires owners to be pursued personally. The debt cannot be attached to the property itself. This means that if the house is sold, it is not possible to recoup any outstanding debt for communal repair and maintenance work from the sales proceeds. However, both the Title Conditions Bill and the Tenements Bill make provision for former owners and new owners to be severally liable for any outstanding costs arising out of obligations to contribute to common repair and maintenance work. The objective of these proposed legislative changes is to ensure that solicitors acting on behalf of purchasers insist that the seller meets any outstanding debts before the sale is finalised. We welcome these proposed changes as a helpful contribution to resolving this problem.

Forced repossession to recover costs

284. At the workshop organised by the Task Force on communal and shared obligations, a number of property managers held the view that the problem of ensuring payment would only be resolved if "majority owners" (or, more likely, property managers acting as the agent of the owners) had the power to repossess the property of owners refusing to contribute and to use the proceeds to pay off the debt. At present, forced repossession is only possible when a loan has been taken out which is secured against the value of the property. ¹

¹ Currently, creditors can take two other forms of action in relation to heritable property known as "inhibition" and "adjudication for debt". Inhibition prevents a debtor from dealing with his heritable property in a way which prejudices recovery of the debt by the creditor. Adjudication for debt is more complex and gives the creditor a priority over third parties and allows the creditor to grant leases and to receive any rents. The Law Commission has recommended retention of inhibition but abolition of adjudication for debt.

285. Our view is that forced repossession is a draconian remedy that can only be justified in exceptional circumstances where relatively large sums of money are involved. We also note the Scottish Executive has recently consulted on reform of the law on diligence brought forward by the SLC with a new proposed method of recovery known as "land attachment". This procedure could allow creditors to force the sale of the property subject to the approval of the sheriff and following initial stages such as registration of the creditor's interest. It is envisaged that there would be certain debtor protections built into the arrangements, for example, limiting the use of the procedure to cases where debt exceeds a certain threshold. We welcome this proposal and recommend that it should be developed further with a view to legislation. However, although land attachment could help to recover costs in some circumstances, our view remains that forced sales would only provide a practical answer in relatively few cases.

Securing up-front costs: reserve or sinking funds

286. In an ideal world, owners would collectively agree to make payments into a reserve or sinking fund in anticipation of future expenditure on repairs and maintenance. Providing the contributions were sufficient, this would ensure that enough money was available in advance and work could be commissioned on that basis. In practice, however, relatively few owners contribute to reserve or sinking funds. As noted from the research on modern title deeds, very few of the developments sampled made provision in the title deeds for contributions into a non-repayable sinking fund although many more made provision for one-off contributions into a float, at the point of flat purchase. This is unlikely to be sufficient for anything more than emergency work.

287. As well as the reluctance of owners to put aside money, the use of reserve or sinking funds is limited because of the responsibilities that fall on the owners to ensure the proper management and accounting for the collected funds and to decide on the level of contributions everyone should make to cover the likely costs of future work. As a result, it is probably easier to see reserve or sinking funds in the private sector being used for routine maintenance (i.e. for small, regular contributions to be made) rather than for major refurbishment work.

288. Compulsion to establish and contribute to reserve or sinking funds in either existing or new developments is impractical. It would require local authorities or some other public agency to keep information on the extent of reserve or sinking funds and to oversee and regulate their management. It would also require penalties against owners that failed to comply. The scale of the bureaucracy required to enforce such legislation would be very onerous and costly. We do, however, feel that there should be greater encouragement given to owners to establish reserve or sinking funds and for developers to include provision for sinking funds in the title deeds of new developments.

289. We recommend, therefore, that:

• the Scottish Executive should provide advice and information on the establishment and management of reserve or sinking funds. Different levels of advice will be required for owners and property managers; and for developers and their legal advisers drawing up title deeds
• local authorities should have discretionary powers to require owners subject to a maintenance plan notice to set up a reserve or sinking fund
• local authorities should also have the powers to provide grant aid to owners to encourage them to establish a reserve or sinking fund. This grant aid would be limited to meeting the costs of the work necessary to establish the reserve or sinking fund rather than contributions to the fund itself.

Local authority involvement

290. Whether with reserve funds, sinking funds or more informal arrangements by owners, there are still likely to be cases where one or more owners block work going ahead by refusing to deposit the necessary money. We consider that local authorities should have a responsibility to act as a "backstop" when genuine difficulties occur but in a manner that avoids them simply becoming the automatic recourse of individual owners faced with a repair problem. The need is for a procedure that encourages owners to work together to resolve differences whilst still allowing local authorities to step in when the civil law framework has clearly broken down. We therefore, recommend that legislation should be promoted incorporating the following powers and procedures:

• owners should have a right to issue a notice to the local authority specifying that certain works had been agreed according to the decision-making procedures in the title deeds (or the default procedures in the Title Conditions and Tenements Bills once these have become law) and that some owners were blocking the work going ahead by refusing to deposit the necessary money
• the local authority must satisfy itself that the notice represents a correct assessment of the position
• the local authority should have powers to allow it to meet the costs of the work for the owners refusing to participate and to place a charging order on these owners together with a levy for its administration costs (which would only be applied to the non-compliant owners).

291. Since these are new powers and procedures, they would need to be accompanied by suitable advice and guidance from the Executive for local authorities, property managers and owners. The clear aim of this approach is to reinforce collective decision making by the owners themselves, not to replace this by local authority action. However, when the authority did "stand in" for the non-compliant owner(s), it would not specify the standard of the work or get involved in appointment of contractors or supervising the work. (It would merely satisfy itself that the proposed works were reasonable given the age and condition of the building.) The responsibility for compliance with building standards, for overseeing the procurement procedure and ensuring the quality of the work undertaken would still lie with the owners including the owner(s) in respect of whom the local authority had acted. The local authority would be able to recover its costs when the property or properties subject to the charging order are subsequently sold.

MANAGING COMMUNAL REPAIRS AND MAINTENANCE

The current position

292. There are a variety of arrangements in place, at present, for organising and managing communal repairs and maintenance with one or more owners taking responsibility for the appointment of a professional manager or factor. In many cases, particularly in the West of Scotland, the title deeds may require owners to pay for the services of a property manager and, as the modern title deeds research study found, this is also the norm throughout Scotland for modern flatted developments.

293. Our view is that the appointment of a professional property manager with a continuing responsibility for monitoring the condition of the property and for organising repair and maintenance work on behalf of the owners is likely to be the most effective arrangement in the majority of cases. It is impossible to be prescriptive about this since owners might prefer to carry out the work themselves. Particularly in small developments, for example, two or three flats in a converted house, this might be the most cost-effective approach. Moreover, the appointment of a property manager is not in itself a panacea. The service provided by the property manager may be poor; there may be a lack of clarity over exactly what the role of the property manager is and owners may feel that they have little control over the activities of the property manager.

294. Above all, it is important to bear in mind that property managers are the agents of the owners and can only exercise powers and functions granted to them by the owners. But whatever the limitations of existing property management arrangements, our view is that the policy aim should be to encourage owners to establish continuing arrangements for managing communal repairs and maintenance and to ensure that good quality of professional property management services are available to them.

Changes to the civil law framework

295. Some progress in this direction can be made by changes to the common law framework. There has been considerable controversy about the extent to which initial developers and social landlords (in the case of Right To Buy sales) can impose a property manager on owners. The Title Conditions Bill seeks to clarify the position here and we welcome this clarification. In effect, developers will have the right to appoint a property manager but this right will continue only until the last house is sold or until the expiry of five years after the first house is sold. Social landlords will also have the right to appoint property managers for a period of up to 30 years after the first Right To Buy sale in a particular block although even during this period, owners of two-thirds of properties may dismiss the property manager if they so wish. After these various "manager burdens" have expired, then a majority of the owners will have the right to appoint or dismiss a property manager.

296. The Title Conditions Bill and the SLC's proposals for the Tenements Bill also clarifies the position where there is no provision in the title deeds for the appointment of a property manager. In both cases, they provide a power for a majority of owners to appoint or dismiss a manager.

297. We endorse both of these proposals for changes to the civil law framework. We also considered whether to recommend that it should be a requirement for all title deeds for new developments to require owners to appoint a property manager as a complement to the recommendation in relation to owners' associations. On balance, we decided that it would be wrong to seek to prescribe in each and every case since there would inevitably be some developments where a professional manager was not appropriate and it was clear from the research that, in almost all cases, modern title deeds do include a provision along these lines in any event. We do recommend, however, 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.

Encouraging owners to establish effective property management arrangements

298. We note with interest a scheme developed by Edinburgh Council known as the Edinburgh Stair Partnership. This provides owners in tenements with a property management service for a set annual fee. The annual fee is currently 59.65, though this fee is currently under review. The service includes carrying out a building technical inspection and report, specifying works that may be required, appointing and supervising contractors and collecting owners' shares of the costs. In addition the Partnership provides each owner with a log book of maintenance reports to build up over the three years of the contract. This project has been in operation for just over a year. At the end of its first year over 350 owners had joined and the project managed 34 tenements, with owners in another 10 tenements in the process of signing up. We considered that this is an initiative that other local authorities might wish to emulate, particularly in areas where there is no strong tradition of private sector property management or factoring.

299. We therefore recommend that local authorities should consider whether to initiate a scheme of this nature or to encourage RSLs with experience of private sector property management work to manage and run such a scheme in its area. We also recommend that local authorities should have the necessary powers to provide limited pump-priming funding to RSLs and others to establish schemes of this nature and that the Scottish Executive should recognise this as a legitimate area of expenditure by local authorities in relation to its support to the private sector.

Requiring owners to establish effective property management arrangements

300. We also consider that, in certain circumstances, local authorities should have the power to require owners to make arrangements for property management. Such a power could be justified where a property is likely to deteriorate as a result of a failure of owners to undertake regular maintenance or where a local authority has felt it necessary to serve statutory notices as a result of disrepair. Such an approach is discussed in Chapter Five as part and parcel of the powers to require owners to produce a maintenance plan. Owners would be required to draw up proposals for property management (which might include the appointment of a professional property manager, or an owner or owners or some other organisation) within their maintenance plan to be approved by the local authority.

Accreditation of property managers

301. There is a need to ensure that owners have confidence in the property managers who act on their behalf. The changes envisaged in the Title Conditions Bill will help in this respect since they will clarify the position on the appointment and dismissal of managers. There have also been concerns, noted in the first report of the Task Force, about the quality of the property management service provided by some local authorities to Right To Buy owners and we noted that, as a result of these concerns, the Housing (Scotland) Act 2001 provides for the regulation by Communities Scotland of property management services provided by local authorities and RSLs.

302. There is, however, nothing equivalent to this in Scotland for private sector property managers. In the private sector, chartered surveyors, solicitors and estate agents may carry out the property management function but anyone can set himself or herself up as a property manager. There is no professional body as such although an industry body, the Property Managers Association of Scotland, has a small membership.

303. We consider that regulation and licensing of property managers, i.e. legislation to make it illegal for unlicensed persons to provide residential property management services, would be too heavy handed and bureaucratic. Moreover, such research as does exist, for example, the research on modern title deeds (Flint, 2003) suggests that there is a reasonably high level of satisfaction with property management.

304. Nevertheless, we do see merit in the establishment of a single, national accreditation scheme to be set up in partnership with the "industry", local authorities and consumer interests. This would be a voluntary scheme but there should be a clear market incentive for property managers to join and this would be reinforced by discretionary powers to allow local authorities to require owners subject to maintenance orders to appoint an accredited manager if they were planning to use a professional manager. Our view is that the size of the property management sector in Scotland means that a national scheme is to be preferred over a multiplicity of local schemes run by councils directly and that, therefore, responsibility for establishing a scheme including setting standards, eligibility criteria, promotion, etc. should probably lie with Communities Scotland within the Scottish Executive, bearing in mind their current responsibilities for the regulation of property management services by social landlords.

ENSURING THAT OWNERS UNDERSTAND THEIR RESPONSIBILITIES FOR COMMUNAL REPAIRS

305. One of our concerns is that owners do not always fully understand the extent and nature of their responsibilities for communal repairs and maintenance. It is difficult to know to what extent this is a problem in practice, but it is clearly a fairly fundamental requirement. With all the changes that will flow from the enactment of the Title Conditions Bill, the future Tenements Bill and our own proposals in relation to communal repairs, we believe there is an important role for HomePoint in Communities Scotland to support owners with information and advice that will help them understand the implications of the changes to their responsibilities as owners.

306. Solicitors acting on behalf of prospective buyers should always advise their clients of the common repair and maintenance burdens associated with the house they plan to buy. To reinforce this and to ensure it is not overlooked, we have recommended in Chapter Three that the Purchaser's Information Pack, which it is proposed sellers should be encouraged to provide, ought to include a copy of the land certificate setting out the common repairs and maintenance burdens attached to flatted properties or a summary of these burdens (if a certificate is not available), together with information on property management arrangements.

IDENTIFYING OWNERS

307. In some blocks of flats, the difficulty of identifying and contacting owners can be a further hurdle to effective arrangements for communal repairs and maintenance. This is most likely to be a problem if the house is let out or is empty. Registers of Scotland maintain property registers (the Register of Sasines and the Land Register, which is gradually replacing it) which show the names of the owners of almost all properties. Registers of Scotland now operate an online Registers Direct service whereby enquiries can be made about ownership for a modest charge providing the property address and location within the tenement can be supplied. Identifying ownership should not therefore cause too many difficulties.

308. The main difficulty arises when a contact address for the owner is not available. Tenants and letting agents may be able to help in the case of let property but this is unlikely to be of assistance in the case of absentee owners of empty property.

309. The Title Conditions Bill imposes a duty on any person who was an owner of a property with a common repair and maintenance burden to disclose to any other person who also has an interest in that burden, the name and address of the current owner or any information the former owner may have to help identify the name and address of the owner. This provision could be helpful in some circumstances although it clearly does not provide a complete solution. To complement this proposed legislation, we recommend 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. We accept that enforcement of a duty along these lines may be difficult in practice but it would nevertheless, create a clear expectation about what is required.

INSURANCE

310. Within a block of flats, each owner may be affected by damage to common parts of the building which are not his or her private property and there is a real danger that restoration of the building may be prevented if some owners do not carry insurance or are under-insured and the tenement block is badly damaged, for example, by fire or flood.

311. The Scottish Law Commission discussed this problem in its report on the law of the tenement. It recommended that insurance should be made compulsory and its draft Bill places a duty on each owner to insure against such prescribed risks as set out in regulations made by the Executive. It was envisaged that enforcement should be a matter for individual owners within the tenement and that to assist in this each owner should be obliged to produce, on request by another owner, a copy of the insurance policy and evidence of payment.

312. We very much support the principle of compulsory insurance but we think that this is best achieved by some form of common policy for the block of flats as a whole. The Scottish Law Commission recognised that common insurance was preferable and their default Tenement Management Scheme would allow for a majority of owners to agree that a common policy should be taken out. We recognise there are real problems in seeking to impose such a requirement on existing flatted blocks except in special circumstances but we do recommend that a common insurance policy should be the norm in all new flat developments. The proposals for the Tenements (Scotland) Bill should be modified to make this mandatory for all owners in new flatted block developments.

313. The special circumstances in which we would recommend that common building insurance be made compulsory for existing flatted blocks are where (as outlined in Chapter Five):

• the local authority requires the owners to prepare and implement a maintenance plan (possibly incorporating a requirement to appoint a property manager)
• the owners are due to benefit from a scheme of assistance.

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