The Law of the Tenement and is this going to change?

The Law of the Tenement and is this going to change?

A “tenement” might conjure up images of traditional Victorian blocks of flats in Edinburgh and Glasgow, and whilst these will indeed be tenements, the definition may also include your nice new flat in a modern development. A tenement comprises any building made up of at least two flats divided from each other horizontally and intended to be in separate ownership.

The current law applying to tenements is principally set out in the Tenements (Scotland) Act 2004, which was designed to provide a comprehensive set of rules for tenements. This Act largely operates as background law with rules which will apply where the legal title to the flats in a tenement do not make the position clear. This includes default rules on who owns particular parts of the tenement building, such as the roof and walls. Of course, if the legal title makes the position clear then these set of rules are not required.

There are some parts of the 2004 Act that will apply regardless of what the legal title says, such as access for maintenance, where each flat owner is under a duty to allow access to or though their flat so that maintenance can be carried out to any part of the building as long as reasonable notice has been provided.

However, a lack of maintenance and improvement works to some tenements over the years has left many tenements in a state of disrepair, and action was required to try and improve the maintenance of such buildings.

Under the current law, the scheme for managing the maintenance of a tenement building could be set out entirely within the titles of the flats in the building, and certainly with flats within newer developments it is likely that the legal title will contain an extensive maintenance scheme. However, it may be that the scheme in the titles does not cover every circumstance, particularly with older buildings, and the Act introduced a Tenement Management Scheme (TMS) which provide a set of fallback rules which are used to fill any gaps in the legal title. If the titles contain no maintenance provisions at all, every rule of the Scheme will apply, although in practice this would be unusual.

The Scottish Law Commission has today published its Discussion Paper consulting on reform of the law of the tenement, and this sets out provisional proposals which include that every tenement building should have an owners’ association to coordinate work to the building. The owners of all the flats in the building would be members of the owners’ association, which would have “legal personality” and be able to enter contracts in its own name.

Under these new proposals there would be certain mandatory duties on the Owners Association to ensure it functions at a minimum level, including a duty to appoint a manager. The Commission are proposing the establish of a new Owners’ Association Scheme, which would replace the current TMS as the fallback rules for management of tenement maintenance.
in circumstances where the legal titles are silent or incomplete.

Generally, the new rules will give the Owners Association the power to take the sort of actions currently dealt with as scheme decisions under the TMS. There is a new mandatory requirement for a general meeting of members to be held once a year, members would be under a mandatory duty to appoint a manager to exercise the powers of the Owners Association on a day-to-day basis and members would be liable for the costs incurred in relation to maintenance. However,
an important difference with the new rules is that the process of planning for and paying maintenance costs will have to be arranged through an annual budget process and payment of a service charge, and there will be a mandatory duty to approve an annual budget.

It is certainly hoped that these type of provisions – requiring planning and budgeting for maintenance – will help in smoothing out some of the often large bills presented to owners which are prohibitive in carrying out maintenance, and will help to improve the standard and quality of some of our tenement buildings.

At this stage, this is a Discussion Paper and comments can be made until 1 August 2024, before the recommendations are made in a final Report.

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

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