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MAINTAINING HOUSES - PRESERVING HOMES: A REPORT ON RESPONSES TO THE CONSULTATION

CHAPTER TWO DEALING WITH DEFECTS AND DISREPAIR

2.1 The Housing Improvement Task Force concluded that local authorities faced particular impediments in addressing disrepair, and identified four key obstacles to effective action:

• The mandatory link to grant aid
• Lack of an enforcement option to require improvements to bring a house up to the Tolerable Standard, other than through acquisition
• Absence of any effective power to address low level disrepair and failures of maintenance that are likely to give rise to serious disrepair problems
• Lack of flexibility in the options available for enforcing notices and recovering costs

2.2 The consultation document set out a series of proposals to address these obstacles, with views sought on the following questions:

• The proposed single statutory notice gives local authorities enhanced powers to deal with a wide range of condition problems. Is this the correct way forward?(Paragraphs 25-26)
• Do you agree that local authorities should have the power to take out a maintenance order against a property or group of properties?(Paragraphs 28-36)
• Should this maintenance order be limited to five years?(Paragraph 32)
• Do you agree that it is reasonable to require a sinking fund to be set up as part of the maintenance order requirements?(Paragraph 33-35)
• Do you agree that there should be powers to control occupation of properties subject to statutory notices, and if so, how exactly should these powers be enforced?(Paragraph 37-39)
• Do you agree local authorities should be able to suspend a notice and, if so, that this suspension should be limited so it only applies until the property is sold or let?(Paragraph 40)
• Should local authorities be given powers to control occupation where owners cannot be identified?(Paragraph 42)
• Should local authorities have power to meet the costs of the share of communal repairs due from owners who will not contribute their share (to allow the works to go ahead), linked to a charging order to recover the costs of the works and administration costs?(Paragraph 42)
• Should local authorities have the power to inspect insurance policies of persons subject to the new notice?(Paragraphs 44-45)

SINGLE NOTICE PROCEDURE

2.3 Having a single notice, rather than a range of notices derived from different legislation, should make it easier for local authorities to deal with a broad spectrum of disrepair. The consultation paper proposed that the single notice would allow action to be taken to remedy:

• Serious disrepair
• Disrepair where the condition is not serious, but if not addressed may result in serious disrepair or may cause damage to adjoining properties
• Defects which make the house fail the Tolerable Standard

2.4 Just over 92% of those responding to this question agreed that the proposed single statutory notice was the correct way forward. Support was consistently high across the organisations responding to the consultation exercise, including local authorities. For example, the City of Edinburgh Council commented that:

"The single statutory notice provides an opportunity to address weaknesses in the current range of statutory notices available to local authorities."

2.5 Although most respondents supported the single notice proposal, a number of local authorities raised concerns over the additional resources that would be required. Aberdeen City Council stated that:

"We have significant concerns over the additional legal and enforcement work that the single notice will require…The Scottish Executive will need to provide financial resources to local authorities to ensure the requirements from the Act are implemented."

2.6 Other respondents highlighted a specific concern over taking action when disrepair was not serious. For example, the Council of Mortgage Lenders Scotland (CML Scotland) said that action should only be taken where this will lead to serious disrepair within a reasonable period of time. COSLA also said it was concerned this power could be abused and could lead to lengthy legal disputes. East Renfrewshire Council added:

"There are likely to be difficulties in agreeing the definition of disrepair where the condition is not serious but if not properly addressed may result in serious disrepair or may cause damage to adjoining properties...some guidance by the Executive on this would be welcome."

2.7 The Royal Institution of Chartered Surveyors in Scotland (RICS Scotland) commented that the single notice should be used in conjunction with the statutory requirements and powers for dealing with defective and dangerous buildings under the Building (Scotland) Act 2003. The Royal Environmental Health Institute of Scotland added that clarification on the relationship between the single notice and the notice procedure in the Building (Scotland) Act 2003 was required.

MAINTENANCE ORDERS

2.8 There is no mechanism to allow local authorities to intervene where lack of maintenance is likely to lead to disrepair. The consultation paper proposes to give local authorities the power to serve a maintenance order where:

• It took the view that future maintenance would otherwise be inadequate
• There was a previous failure of owners with common or shared obligations to co-operate in carrying out works
• Enforcement action had been required to carry out works

2.9 The maintenance order will require the owner or group of owners to put in place and implement a maintenance plan. As with other statutory notices, where a maintenance order is served, the owner, or group of owners, should have access to mandatory assistance.

2.10 Support for local authorities to be able to take out a maintenance order against a property or group of properties was high, with almost 92% of those responding to this question agreeing with the proposal. However, some felt that there are a number of issues to be resolved to make the proposal work in practice. For example, South Lanarkshire Council commented:

"There are some practical issues around developing a competent scheme to enable this to happen - notably the extent to which an owner or group of owners will have the capacity to produce a maintenance plan."

2.11 A number of local authorities commented on the possible financial impact of the proposal. In the view of Dundee City Council:

"It is considered that there is a risk that owners will stand back and expect the local authority to implement and carry out the plan with the resultant issues once again recovering costs from the owners concerned."

2.12 The response from the CML Scotland supports the introduction of maintenance orders, but adds that, as it represents a significant intervention which could cut across the right of a home owner to decide their own maintenance priorities, it should be limited to situations where, for example:

• Money has been spent on the property as a result of a statutory notice having been served
• The lack of maintenance is impacting on adjoining properties or the amenities of the area

2.13 Glasgow City Council agreed that the power to enforce property maintenance would be beneficial but it should be restricted to instances where the local authority has found it necessary to implement repairs in default of property owners, including where a property is suffering from neglect.

2.14 The consultation paper notes that if a building requires statutory intervention to protect investment and ensure future maintenance, the maintenance order should be allowed to stand for as long as is required. However, an order with a lengthy or indefinite timeframe puts undue responsibility on the local authority to ensure the order is being adhered to. The consultation paper therefore proposes that local authorities should have the power to issue a maintenance order for a period of up to five years.

2.15 Just over half (57%) of those responding agreed that maintenance orders should be limited to five years. However, over a third (39%) did not agree. North Lanarkshire Council, for example, stated in their consultation response:

"There should not be a timeframe limiting the period of a maintenance order….This will ensure orders remain in place until such time that an owner has demonstrated their ability or willingness to maintain the property."

2.16 Glasgow City Council commented that while an order could apply for up to five years, a review could be undertaken, either bi-annually or at the end of the five year period. It also suggested that there should also be provision for early termination of an order if a satisfactory maintenance regime is established, and for renewal after five years if satisfactory maintenance remains in doubt.

2.17 The National Association of Estate Agents made the point that a maintenance order should apply for no longer than five years as it may have an impact on the saleability of the property and may affect other owners in the building who will be regarded as either being unwilling to carry out maintenance themselves, or more importantly owning a flat in a building where other owners are unwilling to maintain it.

2.18 One of the concerns in planning future maintenance in a building is making sure that funds are available to pay for maintenance when required. The Scottish Executive is firmly of the view that it would generally be wrong to compel contributions to reserve or sinking funds from owners with common repairs obligations. However, it is proposed to give local authorities the power to require owners in property subject to a maintenance order to establish a fund for further expenditure on repairs and maintenance to common parts.

2.19 The majority of those responding to this aspect of the consultation exercise (80%) agreed that it is reasonable to require a sinking fund to be set up as part of maintenance order requirements. Almost one in five (18%) disagreed, with some local authorities being particularly concerned with the proposal. For example, the City of Edinburgh Council said:

"We have a number of concerns if a sinking fund should be included as part of the maintenance order requirements. It is essential that detailed arrangements are prescribed in legislation. Requiring local authorities to approve arrangements without such a framework would expose the local authority to being held liable if these arrangements failed and owners lost money through the sinking fund."

2.20 Some other local authorities agreed a sinking fund was desirable and should be recommended but it would not be appropriate for this to be set up as part of a maintenance order requirement. In the response from Argyll and Bute Council:

"Local authorities would find such a fund extremely difficult to monitor and enforce."

2.21 A number of organisations responding in more detail stated a need for the Executive to look at the practicalities of how sinking funds would be set up and managed. The Chartered Institute of Housing in Scotland (CIH Scotland) referred to a need for an owners' management scheme to control the scheme and take forward future maintenance issues while Glasgow City Council said a Scottish model scheme would have to be commissioned and promoted by the Executive.

CONTROL OF OCCUPATION

2.22 Local authorities have the power to control occupation of a house in Housing Action Areas where work is required to bring it up to a standard. Where a notice is served to control occupation, its effect is to make it an offence for new residents to occupy the property or to allow it to be occupied until the relevant works have been carried out.

2.23 The Housing Improvement Task Force proposed that a similar power should be applied where the proposed single notice is served on the owners of individual properties outside of the proposed Housing Renewal Areas. The Task Force also recommended that the offence of allowing occupation should apply both to those selling or letting the property and to those subsequently occupying it.

2.24 The consultation paper sought views on four options for ensuring compliance:

• Make the offence of occupation apply equally to the owner at the time the notice was served and the new occupiers
• Make it an offence to sell or re-let the house prior to work being carried out
• Once the house is sold or the tenancy changes, make it an offence to occupy the house until the work is carried out
• Do not extend the control of occupation order power to individual dwellings outside of the proposed Housing Renewal Areas

2.25 Three-quarters (75%) of those responding to this issue agreed that there should be powers to control occupation of properties subject to statutory notices. Just over one in five (20%) disagreed, with just under half of these respondents representing community councils. Although many did not provide specific reasons for disagreeing with the proposal, one respondent commented:

"It is better to require new occupants to rectify problems within a specified time limit."

2.26 Others opposed to the proposal felt it was too draconian a measure and could lead to the deterioration of the property and make it vulnerable to vandalism and break-ins.

2.27 An open-ended question was used to ask respondents how these new powers should be enforced. Almost half (46%) said the sale or lease of the property should be prevented by law until the work had been completed (rising to 60% of the local authorities who responded). A further 16% of respondents said eviction notices should be used and 4% that a fine should be imposed.

2.28 Of the options put forward in the consultation paper, COSLA stated that the power to control owner occupation should be retained for Housing Renewal Areas. In the case of individual houses, it should be an option to make it an offence to re-occupy a house after it is sold or the tenancy changes until the work is carried out. This view was supported in a number of individual local authority submissions, including those from Comhairle Nan Eilean Siar and the City of Edinburgh Council.

2.29 Glasgow City Council commented that the exclusion of occupants from the property should be considered only in the most extreme cases and it may be appropriate to consider limiting the power to certain types of disrepair which have a significant impact on the health and safety of the occupants.

2.30 Both the CML Scotland and the National Association of Estate Agents argued that owners should not be prevented from selling, with the latter adding that some owners may not have the financial resources to carry out repairs and the alternative to selling may be that the property becomes derelict.

SUSPENSION OF WORK

2.31 There are circumstances where suspending the work required under a notice is appropriate, for instance where the occupiers are infirm and the disruption of having the works carried outweighs the advantage. The aim of a suspension order would therefore be to allow individual circumstances to be taken into account in enforcing an order. The suspension would not be indefinite and would only extend to the next transaction involving the house after the order had been served.

2.32 The majority (80%) of those responding to this question agreed that local authorities should be able to suspend a notice and that the suspension should be limited until the property is sold or let. Support was highest among the architects, estate agents, letting agents and property managers responding to the consultation exercise (all supported the proposal). Just under one in five respondents (18%) disagreed, with just under half of these respondents representing community councils.

2.33 The responses from most individual local authorities supported the proposal, although COSLA qualifies their support by adding:

"The suspension should not be for an indefinite period as this may lead to a limbo status for the works which must have been significant enough for a single notice to have been served in the first instance."

2.34 The City of Edinburgh Council agreed with this concern, commenting:

"We do not see any value in local authorities being able to suspend a notice. We would favour a written request for an extension. All reasonable requests should be considered for an extension. However, the effect would be that the notice would still be in force"

OTHER POWERS TO SECURE WORKS

2.35 A new suite of powers is proposed to help local authorities deal with disrepair and the consultation exercise sought views on two of these.

• Should local authorities be given powers to control occupation where owners cannot be identified?
• Should local authorities have power to meet the costs of the share of communal repairs due from owners who will not contribute their share (to allow the works to go ahead), linked to a charging order to recover the costs of the works and administration costs?

2.36 The vast majority of respondents (87%) agreed that local authorities should be given power to control occupation where owners cannot be identified. Only 12% disagreed. Virtually all of those responding (93%) agreed that local authorities should have the power to meet the costs of the share of communal repairs linked to a charging order to recover the costs.

2.37 While welcoming the proposal, a number of local authorities were concerned about the administrative implications. For example, one local authority suggested that the proposal should be framed in such a way to act as an incentive on reluctant owners to pay their share of costs. Owners who do not contribute their share of costs should be offered an assessment of their resources to identify cases of genuine difficulty. However, if an owner had identifiable resources to pay their share of costs, there should be a substantial administrative charge levied by the Council on top of the direct costs of the works involved.

2.38 Local authorities also pointed out that the financial implications of the proposal were difficult to assess and suggested the power was tested in some way before being implemented more generally, including an examination of the ways in which local authorities could recover costs. COSLA added that the proposal was not feasible under existing resources and questioned what source would be used to finance it.

2.39 CML Scotland commented that it believed a charging order taken out over a property would rank before a standard security held over the property. They argue this runs contrary to what is contained in the Housing Bill for England and Wales where a local authority's security in respect of the costs of a repair or maintenance work would be postponed to any existing security over the property. The CML Scotland opposed the use of charging orders that rank before a standard security.

INSURANCE

2.40 One of the ways owners can protect against unexpected building failure is to have buildings insurance. The consultation paper recommends building on the proposals in the Tenements (Scotland) Bill, which gives individuals the right to inspect the insurance policies of co-owners and to confirm that premiums have been paid. It is proposed to extend this power to local authorities where the local authority has served a notice, including a maintenance order, or where the local authority has a direct interest such as owning a neighbouring property. The local authority would also be given the power to raise a civil action against an occupier who did not have insurance cover.

2.41 A high proportion of those responding to this issue (82%) agreed that local authorities should have the power to inspect the insurance policies of persons subject to a single notice.

2.42 However, COSLA and some local authorities pointed out that the proposal would have limitations. Not all owners will be required to have an insurance policy and others have difficulty in securing buildings insurance (for example, the owners of system built balcony access flats and maisonettes).

SUMMARY OF KEY FINDINGS

2.43 Just over 92% of respondents agreed that the proposed single statutory notice is the correct way forward, and provides an opportunity to address weaknesses in the current range of statutory notices. However, a number of local authorities raised concerns about the additional resources that would be required.

2.44 Support for local authorities being able to take out a maintenance order against a property or group of properties was high (92%). However, CML Scotland and others stated that, as it represents a significant intervention, its use should be limited to situations where, for example, the lack of maintenance is impacting on adjoining properties or where it has been necessary to implement repairs in default of property owners.

2.45 The majority of respondents (81%) agreed that it is reasonable to require a sinking fund to be set up as part of maintenance order requirements. Calls were made for the Scottish Executive to commission and promote a model scheme to help with the implementation of this proposal.

2.46 Three-quarters of respondents believed there should be powers to control occupation of properties subject to statutory notices.

2.47 Just over 80% agreed that local authorities should be able to suspend a notice and that the suspension should be limited until the property is sold or let. COSLA argued the suspension should not be for an indefinite period, while the City of Edinburgh Council favoured written requests for an extension.

2.48 Almost nine out of ten respondents (87%) agreed that local authorities should be given power to control occupation where owners cannot be identified. A similar proportion (93%) agreed that local authorities should be able to place a charging order to recover the costs of work and administration where an owner would not contribute their share of costs.

2.49 A high proportion of those responding (82%) agreed that local authorities should have the power to inspect the insurance policies of persons subject to a single notice. However, some respondents have pointed out this would be limited because not all owners are required to have insurance and others have difficulty in securing it.

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