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Last piece of the jigsaw

1 March 04

An outline of the Tenements (Scotland) Bill and how far it will innovate on the common law

by Robert Rennie

The existing law of the tenement is based on the law of common interest. It favours exclusive ownership of each part of the tenement, slice-by-slice and floor-by-floor, with a common interest in those parts of the tenement which are part of a particular slice but which provide either support or shelter for the whole building.

Most title deeds change the rules of ownership to make things like the roof, solum, garden and outside walls, passages, stairs and services common and this is by far the best method of dealing with matters. But the variation of the common law rules may be inadequate, the maintenance obligation may be unclear or inconsistent and there may be no management scheme to deal with matters of common repair. Most other jurisdictions have a statutory code for tenemental or flatted properties and this is what the Tenements (Scotland) Bill intends to provide, although it is in a less radical form. One of the difficulties with legislation of this type is to decide whether or not it will apply across the board no matter what existing titles say, or whether it will only apply where the existing titles are silent.

A tenement is defined in section 23 in fairly broad terms as a building or part of a building that comprises two related flats which, or, if more than two, at least two of which are or are designed to be in separate ownership and are divided from each other horizontally. In determining whether flats are related, regard is to be had, among other things, to the existing title to the tenement and any tenement burdens which treat the building or part of it as if it were a tenement.

The new rules of ownership

Sections 1 to 3 effectively restate the common law rules of ownership. A radical alternative was simply to make the main structural parts of a tenement (roof, walls, foundations, etc) common property. This would have created a human rights issue because the legislation could have been regarded as confiscatory of exclusive rights of ownership.

The framers of the legislation also took on board the fact that many existing title deeds had been drafted against the background of the existing common law and there was concern as to how these deeds could be interpreted if the law of ownership was changed. The Scottish Law Commission considered that to have a new law of property in respect of blocks of flats or tenements erected after the commencement of the Act would only add to the confusion, so the restated rules of property ownership apply both to existing tenements and new tenements although it will be perfectly possible to vary these rules in the deeds themselves. The new rules will not affect existing ownership arrangements in titles.

Meeting in the middle

Except where titles provide differently, sections 2 and 3 will determine the legal boundaries and pertinents of every part or sector of the tenement. “Sector” means a flat, any close or lift or any other three dimensional space. Section 2 provides that the boundary between any two contiguous sectors is the middle line of the structure that separates them. The boundary between the first floor and second floor flats is the midline of the joists. However any outside wall that does not separate the flat or sector from another flat will be included in the ownership of that flat. This effectively restates the common law.

Doors or other items which wholly or mainly serve a particular flat are owned exclusively even if they are in a wall which is only owned up to the middle line. Where titles are silent, ownership of top flats will include the roof over the flat, the roof void and attic space, and where the roof slopes, the triangle of airspace up to the ridge (this will help where a dormer has been put out). The solum is within the ownership of the bottom flat, again subject to the titles. Ownership of airspace above the ridge of the roof goes with ownership of the solum. A close includes the roof over and solum under the close.

Pertinents as common property

Section 3 deals with pertinents attaching as rights of common property to each flat, again only where the titles are silent. Pertinents are common property rights, not rights of common interest. Each flat will have a right of common property in any close or any lift by means of which access can be obtained to more than one flat, unless the close or lift does not afford a means of access to that flat. Any land apart from the actual solum will attach as a pertinent to the bottom flat or flats most nearly adjacent to the land. Pertinents (e.g. rhones, fire escapes, chimneystacks) serving only one flat attach as a pertinent to that flat. Where they serve two or more flats, there is a right of common property attaching to all the flats. The rights that attach as pertinents are equal shares in the common property, apart from chimneystacks, for which the share allocated to a flat will be determined by ratio, of the number of flues serving the flat to the total number of flues in the stack.

Tenement Management Scheme

The Tenement Management Scheme will apply to new and existing tenements, except if there is a development management scheme (Title Conditions (Scotland) Act 2003, section 71) and broadly, in relation to particular rules of the scheme, to the extent that the titles make provision as respects each owner in relation to the matters covered.

The thrust of the Scheme is to place obligations on owners in relation to maintenance, whether relating to parts in exclusive or common ownership. The effect may therefore be to impose obligations on flat owners that they did not have in the past. Certain parts of a tenement are defined as “scheme property”. This is not an ownership concept; it is merely a convenient label for those parts that ought, as a practical matter, to be maintained at joint expense. It includes any property that in terms of the titles is common property of two or more owners. More importantly, where the titles are silent and the new statutory code of ownership will apply, scheme property can also include certain parts of the tenement in the exclusive ownership of one owner. It also includes property that is not common property but must, under the existing titles, be maintained by two or more owners.

Scheme decisions

The owners may make scheme decisions in relation to scheme property. If the titles provide for a method of making decisions, that will rule, otherwise rule 2 will apply. Rule 2 provides for a voting mechanism of one vote per flat, with decisions by simple majority unless the number of votes does not exceed three. Maintenance includes repairs and replacement, cleaning, painting, gardening, day to day running and reinstatement of part (but not most) of the tenement building (e.g. part of an outside wall), but not demolition, alteration or improvement unless reasonably incidental to maintenance.

Rule 2 provides for the calling of meetings to take decisions; alternatively an informal consultation procedure may be adopted. Scheme decisions must be notified to owners. There is a restricted right in favour of owners who did not vote in favour of a scheme decision to annul that decision within a time limit; those wishing to annul must then be liable for not less than 75% of the scheme costs that arise from the decision. Scheme decisions can be made in relation to maintenance, inspection, the appointment and dismissal of a manager, the delegation of powers to a manager, common insurance and other matters. There are provisions for deposits against maintenance costs, and maintenance accounts for larger works.

Rule 4 deals with scheme costs and their apportionment. If the title deeds do not contain provisions for apportionment, then where the scheme costs relate to property which is owned in common the costs are shared equally by the common owners. Where only the maintenance obligation is shared or the property is simply scheme property in terms of the Tenement Management Scheme, the cost may be based on floor area where the floor area of the largest flat is more than one and a half times that of the smallest.
The rules provide that where an owner’s share of any scheme costs cannot be recovered because the owner has been sequestrated or cannot be contacted, the share must by paid by the other owners in accordance with their appropriate proportion.
In terms of rule 6, any owner can carry out emergency work and the other owners will be liable as if it was a scheme cost. By rule 7, the scheme binds the owners and decisions are binding on owners and their successors. Procedural irregularities do not affect the validity of scheme decisions. Successors will be liable for costs but may have a right of relief.

Access and insurance

An owner may give reasonable notice to the owner or occupier of any other part of the tenement that access is required for maintenance, inspection or support and shelter purposes or for the purposes of calculating floor area. Notice is not required in cases of emergency.
There will be a statutory duty on each owner to keep in force a contract of insurance against prescribed risks for reinstatement value of that owner’s flat or a part of the tenement building attaching to the flat as a pertinent. If the title requires a common policy, such a policy will satisfy the statutory requirement to insure.

Demolition and abandonment

By section 16, demolition of a tenement building will not affect ownership rights. Accordingly, if the titles provide that the solum and the roof are common then on complete demolition all the owners in the former tenement will have a common right in the solum of the site. However, where flats have been owned exclusively, each former owner will own a slice of airspace. It is extremely difficult to measure airspace related to a flat that no longer exists. The bill provides sensible solutions to these situations. Except where the titles provide otherwise, the cost of demolition is to be shared equally except where the floor area of the largest flat is more than one and a half times that of the smallest, in which case liability is based on floor area. Liability arises from the date owners agree to demolish or in any other case from the date on which demolition is instructed. Partial demolition is included. These provisions do not affect the rights of a local authority under section 123 of the Housing (Scotland) Act 1987. No owner may build on or otherwise develop a site unless all agree or there is a rebuilding requirement in the title. If all the owners do not agree, any one owner is entitled to require the entire site to be sold, the proceeds being divided equally or according to floor area as above. There are similar provisions for tenements that have been abandoned due to their poor condition.

Swords into ploughshares?

There is no doubt that this measure is to be welcomed. It provides a sensible but not radical reform, and a management structure that should avoid the sort of difficulties that have arisen in the past where owners simply dig their heels in or ignore the requirement for maintenance. The great benefit is the definition of scheme property which overrides ownership issues. In the past, murder has been committed in situations where proprietors have been unable to carry out sensible maintenance. Hopefully proprietors will in future use the Tenement Management Scheme to persuade their neighbours rather than some other and more offensive weapon.

Robert Rennie is Professor of Conveyancing at Glasgow University and a partner in Harper Macleod.