SFHA submits response to Scottish Law Commission’s Compulsory Tenement Owners’ Associations Proposal

SFHA is an organisational member of a Scottish Parliament Working Group on Tenement Maintenance, which was convened in March 2018 to explore what actions could be taken to improve the condition of Scotland’s tenements. One of the Working Group’s recommendations was that every tenement building should have an owners’ association to coordinate work to the building. This recommendation was referred to the Scottish Law Commission (SLC) which published a Discussion Paper, Tenement Law: compulsory owners’ associations, earlier this summer. Today the SFHA submitted our response to the SLC’s consultation.

The proposals introduce a new Owners’ Association Scheme (OAS) that would replace the existing Tenement Management Scheme (TMS) and sets out rules of operation and mandatory duties for OAS. These include the duty to appoint an OA manager, to register the OA, to organise an AGM of members, and approve an annual budget. It also proposes a remedial management scheme if an owner’s association fails to comply.

The results of the consultation period will be used to inform a report setting out the Commission’s final recommendations to the Scottish Government.  This report will be accompanied by a draft Bill, which we anticipate will be published in 2026.

SFHA held a joint webinar with the Scottish Law Commission in June to outline the proposals and receive member feedback to inform our response. We also received feedback from attendees of the Factoring Network and SFHA’s Building Safety and Maintenance forum—many thanks to all those who contributed views over the past couple months.

Our submission is available to read here

The discussion paper is extremely lengthy, and SFHA decided to focus our member engagement and response on 9 key areas we view as the most significant. These are:

• Mandatory duties and remedial management
• Applying and disapplying the legislation
• The role of non-owner occupiers
• The functions and powers of the owners’ association
• Defining maintenance
• Demolition or sale of abandoned tenements
• Alignment with other legislation
• Running the association and emergency work and
• The role of the manager

Our response recognises the important opportunities the proposals create for enabling the maintenance of and investment in mixed-ownership tenement blocks. It also highlights the challenging context that RSLs and factors are operating in, and, throughout the consultation, we ask for the SLC to consider the practical impacts on RSLs’ ability to provide quality services in tenement blocks whilst maintaining affordable rents. We recommend that RSLs and factors are closely involved in potential next steps of preparing the legislation and associated guidance to ensure legislation achieves the intended objectives. We also state the importance of strong alignment with an RSL-informed Heat in Buildings Bill and effective public education campaigns to raise awareness of any new legislation and its impacts.

SFHA’s response included the following key points:

• Recognition that the proposals provide an important opportunity to address the issues of non-engagement from owners in tenement blocks. SFHA agrees with the proposals that a simple majority of 50% should constitute a majority vote, and we recommend i) changing the requirement for a majority of votes cast rather than a majority of votes allocated and ii) that the requirement for unanimity should be replaced with requirement for special majority (75%).
• SFHA supports the proposal that local authorities may be appointed as managers of last resort of the owners’ associations, but we emphasise the need for proper resourcing of local authorities to enable effective implementation. We agree with the Commission’s proposals that no other bodies (including RSLs and RSL factors) can be compelled to become OAS managers. However, we recognise that in some blocks, RSLs may wish to take the remedial role over from local authorities and accept appointment as remedial managers.
• We recognise the opportunity to clarify practical definitions of ‘maintenance’ and ‘emergency’ in the introductions of OAS, and we encourage the commission to refine and expand these legal definitions, where appropriate, so they are fit for purpose.
• We support the proposal that the OAS would replace the TMS. We also support recommendations that, after a fixed period, the OAS would replace existing title conditions that deviate from the OAS to enable standardisation.  
• We ask for an option to enable existing factors to become the OA manager by default, to streamline implementation of the proposals where effective agreements are already in place.

SFHA also shared its response with the Tenement Maintenance Working Group, which will issue an additional response on behalf of all participating members. SFHA reminds Scottish Government in own response that any tangible improvement in the condition of Scotland’s tenement housing stock from compulsory OAs will be limited without progress on the Working Group’s other two recommendations (regular building inspections and building reserve funds).

Please get in contact with our team to discuss our response or wider participation in the working group.