Tenements (Scotland) Bill: Stage 1

– in the Scottish Parliament at 2:00 pm on 3rd June 2004.

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Photo of Murray Tosh Murray Tosh Conservative 2:00 pm, 3rd June 2004

The next item of business is a debate on motion S2M-848, in the name of Margaret Curran, on the general principles of the Tenements (Scotland) Bill.

Photo of Margaret Curran Margaret Curran Labour 3:01 pm, 3rd June 2004

I am delighted to move the motion to approve the general principles of the Tenements (Scotland) Bill. As there are more than 800,000 tenement flats in Scotland, the bill will affect a very large number of Scots and should improve their lives.

The bill represents the third and final stage in the Executive's current programme of property law reform and follows the Abolition of Feudal Tenure etc (Scotland) Act 2000 and the Title Conditions (Scotland) Act 2003. This package of reforms will modernise an outdated and old-fashioned system of land ownership and replace it with a modern and clear system. I know that the Parliament would wish to acknowledge the diligent and exhaustive work of the Scottish Law Commission, which prepared the draft bills on all three property law reforms.

I also take this opportunity to thank the parliamentary committees that have examined the bill during its progress to date. As members will no doubt demonstrate this afternoon, some of the issues are quite technical and I think that all members will agree that the Justice 2 Committee has produced an excellent report.

Photo of Margaret Curran Margaret Curran Labour

Absolutely. I am delighted that the committee has endorsed the policy behind the bill.

As everyone will know, the bill has two main aims. First, it restates and clarifies the common-law rules on the ownership of the various parts of a tenement. Secondly, it introduces a statutory scheme known as the tenement management scheme for the management and maintenance of tenements. However, the scheme will apply only as a default arrangement. After all, many existing tenements have perfectly good arrangements that are suited to the building's particular nature. Scotland has an infinite variety of tenements and the deeds that are drawn up take into account the different circumstances of particular tenements.

Similarly, developers in future need not be constrained by a rigid set of rules, but can be comforted by the knowledge that the tenement management scheme will underpin gaps or deficiencies in titles. The tenement management scheme will complement the title deeds to the property and ensure that any important gaps or inadequacies are plugged. As a result, I am glad that the committee has recognised the importance of free variation of the title deeds as well as the vital role that the tenement management scheme will play in the future maintenance of the tenement stock in Scotland.

I will now refer to some of the detailed observations on certain aspects of the bill made in the committee's stage 1 report. As I have said, some of the points that were raised are quite technical and it will not be possible for me to comment on all of them this afternoon. However, we will write to the committee on other matters, including those that relate to legal aid regulations and the duty to provide support and shelter.

The committee discussed the service test in great detail. The service test simply means that ownership of the common parts of a tenement will depend on which flats they serve. In that context ownership is important, because someone who owns a share in a part of the tenement is obliged to pay a share of any maintenance costs.

The committee expressed concerns about an owner who might be required to contribute to the upkeep of a part of a tenement even if he or she no longer uses it. For instance, if someone blocks up a fireplace, will they still be obliged to contribute towards the upkeep of the chimney? My advice on the matter is that there is a difference between use and service. If an owner voluntarily chooses not to make use of a part of the tenement, that should not exempt him or her from responsibility for its upkeep, as the flat will still be served by that part.

I turn now to small tenements. In the light of evidence given at stage 1 and the committee's clear concerns, we have looked again at the provisions that cover the requirement for unanimity under the rules of the tenement management scheme for tenements with three or fewer owners. We accept the argument that the provisions might prevent owners in smaller tenements from getting repairs carried out. We intend to lodge an amendment at stage 2 that will allow a majority of two, in a tenement of three owners, to reach a scheme decision.

The committee has expressed very considerable concerns about section 11 of the bill. The section provides that an incoming owner will be liable, together with the seller, for any costs, for example, of maintenance or repairs. So, if the flat is sold and there is an outstanding liability for work, the owners of the other flats would be able to choose whether to claim the money for the sold flat's share from the seller or the buyer.

Despite the legal language of the section, the scenario is easy to imagine. The owners in a tenement agree to carry out a repair. The work is done and the bills come in but, in the meantime, one of the owners sells their flat and disappears without leaving a forwarding address. Who is to pay for that share of the repair? At present, the law provides that the seller is responsible. If the other owners cannot trace the seller, they may well have to pay that share. The bill would give them a further option—to pursue the incoming buyer for the costs.

Some members of the committee clearly felt that the purchaser could be faced with a nasty shock if the seller failed to disclose liabilities. They argued that there should be greater protection for the incoming owner. One option that was suggested to the committee was that the other owners should be permitted to place a notice in the Registers of Scotland, which would alert an incoming purchaser to the fact that there was an outstanding repair.

As members will be aware, this is a complex issue. Although the cost of registration is likely to be modest, there would also be associated legal costs, and owners might just not bother with a notice. The other owners in a tenement are perhaps less well placed to pursue the absconding owner than is the new owner, who at least has some bargaining power during the sale process. The option of placing a notice has implications for the Registers of Scotland and might have the effect of cluttering them up.

It may be worth remembering the purpose of this proposed change in the law: it is intended to protect the responsible owners in a tenement who instruct maintenance but are left out of pocket when an owner absconds.

Photo of Cathie Craigie Cathie Craigie Labour

I hear what the minister is saying and I understand that this is a complex issue, but is that complexity not a reason for introducing something that is more simple—such as maintenance funds or building funds—to cover possible problems of changing ownership?

Photo of Margaret Curran Margaret Curran Labour

I will finish the point I was making and then, I hope, address that point directly.

Because of the high turnover of tenement flats, repairs often do not get carried out—partly because some owners fear that they will be faced with a higher proportion of the repair bill when other flat owners sell up and move away without paying their share. Our proposed change has a worthwhile objective that might be threatened by the changes that the committee suggests. However, the matter clearly merits further consideration, so the Executive would like to consider it further in the light of the arguments that may be heard during stage 2.

When we consider the different options, we will consider the option that Cathie Craigie has mentioned. This bill may not be the legislative vehicle for that—indeed, legislation may not be required—but I would have to take advice on that. However, if we are to address the challenges that the committee has pointed out, her suggestion might be one option that we would consider with the committee at stage 2. Obviously, we do not want to create further complexities.

In its report, the committee expressed concerns about rule 3 of the tenement management scheme, which provides that, where payments for maintenance work have been collected from owners in advance, an owner can request repayment if the work does not commence within 14 days of the proposed date of commencement. The committee suggested that the tenement management scheme should provide for a "refund date", which would be chosen by the owners. We think that that is a sensible idea, but we also think that there should be a default position in case the refund date is overlooked when the arrangements are made for a repair. We propose to amend the bill so that owners can request repayment only if the work does not commence before the refund date or within 28 days of the proposed date of commencement.

Those have been the main matters on which we think it will be necessary to amend the bill, but we will also be making a number of technical amendments at stage 2.

There remains one formal matter for me to mention. For the purposes of rule 9.11 of standing orders, I advise the Parliament that Her Majesty, having been informed of the purport of the Tenements (Scotland) Bill, has consented to place her prerogatives and interests, so far as they are affected by the bill, at the disposal of the Parliament for the purposes of the bill.

Photo of Margaret Curran Margaret Curran Labour

I move,

That the Parliament agrees to the general principles of the Tenements (Scotland) Bill.

Photo of Nicola Sturgeon Nicola Sturgeon Scottish National Party 3:10 pm, 3rd June 2004

I will resist the temptation to echo the comments of my colleague Linda Fabiani.

As the minister has said, the Tenements (Scotland) Bill is a highly technical bill—although Michael Matheson has just informed me that he has found some juicy bits on which to comment when he sums up. They eluded the Justice 2 Committee in its scrutiny, so I wait to hear what they are.

I would venture to call the bill dry, but I would probably be shouted down by Annabel Goldie who, as a former conveyancer, frequently found herself in raptures of delight and excitement as we considered weighty issues such as whether the ownership and management of a chimney flue should be different from that of a chimney stack. I know that that is something that the minister, with her encyclopaedic knowledge of the bill, will want to comment on at some length during the debate. I look forward to hearing her clarify that important point.

To be serious, the bill is technical, but that should not mask its importance to hundreds of thousands of Scots. The fact that a quarter of all the housing stock in Scotland consists of tenement properties means that a considerable number of people live in them. When most people think of a tenement, they think of the traditional sandstone variety—the kind that was inhabited by the Broons, for example—but tenements come in many shapes and sizes. Most of them are residential properties, but office blocks also fall within the bill's definition of a tenement.

Tenement properties raise issues of ownership and management that do not arise with other types of property, such as who owns the close stairs and who is responsible for paying for roof repairs. Those questions are familiar to anyone who has owned a flat. At the moment, such matters are governed by common law—which, as always, is open to interpretation and dispute—and the real burdens in title deeds, which are specific to the individual properties. Very often, the title deeds will make it crystal clear what the rules are about who owns what and who is responsible for what when things go wrong. However, it is perhaps more often the case, particularly with old tenement properties, that the rules are anything but clear. That is why I think that the bill is necessary.

The bill is an important step forward in the development of property law in this country. As the minister has said, it seeks to do two things—to clarify the current common-law rules and to set out a set of rules for the maintenance and management of tenements. I want to emphasise a point that the minister touched on. There is nothing in the bill to prevent the continued use of title deeds to determine issues of ownership and management in individual tenements. The bill simply provides a default scheme that will operate in cases in which the title deeds are silent, confused or deficient in some way.

The Justice 2 Committee considered that point in some detail; indeed, we changed our minds on it in the course of our stage 1 scrutiny and concluded that such an approach was right, because it will give owners of existing tenements or developers of new tenement buildings the right to frame rules that are appropriate for the property in question. It will also give protection to owners—usually existing owners—in situations in which the title deeds are deficient.

The committee agreed with most of the bill's key provisions, such as the use of a service test to determine ownership of items such as water tanks, chimney stacks and fire escapes. The basic rule is that such items are owned jointly by all the flats in a tenement that are served by them. That is a sensible approach, although, as the minister has said, an issue arose from that, which I think still bears some clarification. What would happen if, one by one, all the owners in a tenement block disconnected their flats from the water tank so that no one was served by it? Who would then be responsible for the maintenance of the tank? The minister has given some useful clarification today in that she has said that service and use are not necessarily the same thing, but I am still not entirely convinced on that point. It might be useful to have some express clarification of that in the bill, to put the matter beyond doubt. We were also satisfied with the concept of scheme property that is laid out in the tenement management scheme, which the minister has outlined.

As with any bill, there were some issues of concern, most of which were minor. However, I will finish on the one that was a substantial area of concern. It has already been touched on: the joint and several liability for unpaid debts between a seller and a buyer. Situations will arise in which the seller does not advise a buyer of the debts, the buyer buys in blissful ignorance of them, the seller disappears into thin air and cannot be traced and the buyer finds themselves carrying the can. That is unjust and unacceptable. I accept that the answer to it is not easy and that the policy intention to protect responsible owners is sound, but an innocent buyer, who may be a responsible person, should not find themselves in such a situation. I welcome the Executive's commitment to consider the matter further, and I hope that it is prepared to use some imagination to come up with a solution.

The bill is good and necessary. It is important for many people and I am glad to support it at stage 1.

Photo of Annabel Goldie Annabel Goldie Conservative 3:16 pm, 3rd June 2004

There is no doubt that, when it comes to political excitement and passion, the Justice 2 Committee lives life in the fast lane and is at the van—the cutting edge—of thrills and political unpredictability. The Tenements (Scotland) Bill helped us to maintain that racy pace. As Nicola Sturgeon indicated, many an afternoon was happily whiled away mulling over the delights of chimney heads, stacks and flues and other riveting integral parts of tenemental property law.

It would be wrong to say that the exercise was one only for the conveyancing anoraks because, as the minister and Nicola Sturgeon have already indicated, the bill is a watershed in conveyancing law in Scotland. I, too, not only thank the minister for her warm words about the committee and its preparation of the stage 1 report, but pay tribute to the early work that the Scottish Law Commission did on drawing up the bill and thank my fellow committee members and our clerks for their robust work on the stage 1 perusal of the bill.

My party supports the principles of the bill and considers it to be an important piece of progress, but I will comment briefly on some specific matters. I am glad that the principle of free variation has been recognised. Some people were nervous that the bill would seek to be prescriptive and didactic and to lay down compulsory measures rather than say that it is sufficient if the title deeds do the job adequately. It is right that, if that principle fails, the bill should step in.

The minister specifically mentioned three points and I am comforted by what she said. I look forward to seeing the amendment on small tenements, but I think that it will remove a possible unfairness and anomaly.

The question of a purchaser's liability for repairs is perplexing. I noticed that, when the minister referred to the possibility of registering a notice against a title, she said that it was complex, but I argue that it need not be complex. There is a precedent for it: in circumstances in which local authorities have carried out mandatory repairs under statute, notices are recorded against the titles of all the flats, which mean that no seller can give a good title without discharging the debt. It is not rocket science; it is a fairly straightforward procedure, and I urge the minister to consider that carefully.

Cathie Craigie raised a good point about a sinking fund, or what would be more colloquially described in the trade as a float. That is how many factors operate; there is a practice whereby, when somebody purchases a flat in a tenemental property, they are required to contribute a sum up front as a float to deal with on-going repairs without a debt arising or continuing. Therefore, it is possible to contemplate a scenario in which, to protect the hapless purchaser—who is totally dependent on a seller's honesty—from being led up the garden path and having a bill that has nothing to do with them foisted on them, protection is afforded for repairs over a certain level. The mechanism for doing that need not be complicated.

I am comforted by the comment that was made about the proposed amendment on the return of moneys. That issue gave rise to interesting discussion among all members of the committee. We saw what the bill was aiming at but felt that in practice it might achieve unfairness. It tends to be the case that no factor will instruct a contractor to carry out repairs until the factor has all the money in his or her hands, so before that point there is no commencement date. There is something of a chicken-and-egg situation—what comes first? Although people may want to talk about a commencement date, they do not have that in their hand until the contract is instructed. That is why the committee thought that it was sensible to distinguish between a commencement date and a genuine refund date by which a proprietor would be entitled to recover moneys if there had been an unacceptable delay. I look forward to seeing the proposed amendment.

I also raised the issue of insurance. The bill seemed to make it mandatory for proprietors to have common insurance when perfectly adequate individual flat insurance might be in place. The committee regarded that as a slightly unwelcome usurping of adequate arrangements and, for that matter, of individual proprietorial rights to make such arrangements. Under the bill, proprietors are required to make arrangements, but there seemed to be an attempt to impose a common insurance policy en bloc, which might not be necessary.

Subject to those comments, I applaud the bill, which represents a significant step forward. I look forward to seeing the amendments that will be lodged at stage 2.

Photo of Margaret Smith Margaret Smith Liberal Democrat 3:21 pm, 3rd June 2004

It is a pleasure to follow that well-known danger seeker, Annabel Goldie. Mike Pringle is away being enlightened by the Dalai Lama, while I am here being enlightened on tenement conveyancing by the members of the Justice 2 Committee. I will leave members to make up their minds about who has the best afternoon of it. I am sorry that I will be unable to engage in witty repartee with other members about water tanks and chimney flues, but I will do my best to read Mike Pringle's speech.

The bill is a long time in coming. The first discussion paper on the law of the tenement was published in 1990 and the Tenements (Scotland) Bill forms the third and final part of the programme of property law reforms that was recommended by the Scottish Law Commission and which the Executive, rightly, has advanced. It will ensure that all tenements, modern flats and high-rise office blocks in Scotland have a proper management and maintenance scheme.

The bill sets out a framework for regulating the responsibilities and duties of private owners who share a building. It does not quite get down to the level of who cleans the stairs, which was always the big issue when I lived in a tenement, but it provides clarity about who owns which parts of a tenement and who is responsible for which repairs. For example, if the roof needs fixed, who will decide what, who will get estimates and engage contractors, and how will funds for the repair be collected? The bill will provide answers to those practical questions. I understand that by the time the final draft of the committee's stage 1 report came to be considered, there was almost complete agreement among members, which is to be welcomed. The issue is not particularly controversial, but it is important to the many hundreds of thousands of people who live in flatted accommodation in Scotland.

I am sure that there will be a fair amount of agreement about much that has already been or will be said in the debate, so I will highlight just a few points.

During the first meeting on the bill, at which evidence was taken from the bill team, it became apparent that the way in which tenements are dealt with in Edinburgh is different from what happens in the rest of Scotland. Edinburgh is unique in Scotland, in that there is a distinct local act that governs tenements there—the City of Edinburgh District Council Order Confirmation Act 1991. Under the act's provisions, the City of Edinburgh Council can be proactive about statutory notices and is not tied to grants and/or loans. The former convener of the housing committee of the City of Edinburgh District Council, who is sitting in the front row of the chamber, will remember that only too well. Because of the 1991 act, the City of Edinburgh Council has a good record of being proactive in relation to statutory notices.

Of course, not all local authorities can take advantage of the act. We are pleased that, in her evidence, the Deputy Minister for Communities stated on the record that the passage of the bill will do nothing to change the way in which the City of Edinburgh Council approaches its statutory notice scheme, except in one important way. If the title deeds are silent and an issue comes under the tenement management scheme, in future only a majority decision, rather than a unanimous decision, as at present, will be required for a statutory notice to be pursued.

Edinburgh is different in one other significant way. In old, traditional tenements, factors did not operate. That is different from the situation in Glasgow, where the practice is common. Under the tenement management scheme, factors will be involved where they do not exist at present. I have already referred to the tenement management scheme. The committee agreed with the approach taken in the bill, which is to make it a default scheme that entirely respects existing title deeds.

As I said, I will not get involved in discussions about water tanks or chimney stacks, but I will address the issue of costs, which is dealt with in section 11. As we have heard, a buyer of a tenement is all too often left with an outstanding bill that the seller failed to disclose. That point was well illustrated by Ken Swinton of the Scottish Law Agents Society. He gave an example from his own experience of buying a flat for £24,000 and finding out following the purchase that there was an outstanding bill for £20,000 on the tenement. In law, the buyer can take action against the seller, but they must know where the seller has gone. There would be no right of action against the solicitor if they had asked the right questions. The committee was rightly concerned about that matter as it is very unfair to the purchaser. We are glad that the minister recognises the force of the concerns that the committee had and that she has agreed to consider the issue further.

As a former Registers of Scotland employee, I was interested in the minister's comments about the Registers of Scotland. I certainly see some form of registration as being quite an effective option in resolving an unfair situation for the hapless buyer—it certainly was for Edinburgh tenements. A charge would appear on the sasines in respect of orders—I spent several years of my life looking at them. Such registration would be a doable proposition and I ask the minister to take that forward, if she can, with the Registers of Scotland.

I also welcome the fact that the minister has agreed to consider further sections 16 to 20, which cover the demolition and abandonment of tenement buildings. The Scottish Law Agents Society was concerned about the definition of a site to be sold in that it seemed that only the solum and the air space directly above, but not the garden grounds, were included in the section. The result might be the creation of a ransom strip, which could be used to block further development on a site.

The bill is very much a positive step forward. It will help to solve many of the problems that have existed in the past and it will be a positive addition to the Executive's programme.

Photo of Pauline McNeill Pauline McNeill Labour 3:27 pm, 3rd June 2004

We have all clearly missed out on the debate that the Justice 2 Committee has had in the past few weeks.

I have a strong interest in the bill as I represent a constituency in which 89 per cent of owners and residents live in flats—that figure includes maisonettes and apartments. That is not very good when it comes to an election: it is good for my fitness, but it is not necessarily good for my health.

A great proportion of constituents in Glasgow Kelvin live in tenement accommodation. I have had my share of leaky roofs and arguing with neighbours about who is responsible for repairs, and I have certainly had my fair share of dry rot. I have a lot of personal experience of the issues involved in living in a common building. It is easy to forget that, although we may own only part of the building, important issues must be dealt with on a common basis.

That is why I welcome what the Executive is doing with this bill on the law of the tenement and what it has done in previous legislation—I believe that the bill is part of a tripartite approach—which included legislation on feudal tenure and title conditions. I welcome the introduction of a framework for tenement management schemes and long-term maintenance funds—those two features of the bill must be welcomed whole-heartedly.

I have never believed that law reform in itself will be enough to address the problems in tenement properties. Many buildings in my constituency are well over 100 years old and I have always believed that many owners of such buildings do not appreciate that they have taken over a building that may have been in disrepair for much of that time.

When we move into a new property, we are probably all guilty of looking at the superficial aspects. When most people move into a property they think about how they will furnish and paint it. A minority look at the state of the window sills or go around seeking dry rot—who would want to do that? There has to be a culture change in our approach to property, in particular common property.

I am a little concerned that, as a result of the reforms, an innocent owner might be caught up in dealing with disrepair that dates back a long time. That is why the housing improvement task force is one of the Executive's most innovative measures in housing. The bill is part and parcel of the Executive's work through the task force.

We have all had experiences of good and bad factors. There is no legal requirement to have a factor, but a good one can certainly help to ensure that someone takes responsibility for co-ordinating what needs to be done, in particular common repairs. It would be worth spending a bit of time considering how we might address the need for quality factoring.

On majority voting, I do not disagree that we should depart from the law as it currently stands, and I agree that we should proceed on the principle of free variation. However, in Anderston, which is another area that I represent, owners complained that, when majority voting took place, they were outvoted by agencies such as the former Scottish Homes, which had large resources. People said that they had to proceed with replacing a roof, for example, although they did not have the resources to do so and said that they were not faced with a straightforward situation in which all the owners in a block would vote. It might be worth thinking about whether majority voting is fair in those circumstances.

Something needs to be done about the duties of absentee landlords, which is an issue in my constituency, where several buildings have had to be compulsorily purchased and demolished by Glasgow City Council because they were in such a state of disrepair. The landlords gain the advantage, particularly when the building is in the west end of Glasgow.

The Executive's overall approach to tenement law is the right one, although I hope that there is general agreement that the bill on its own will not fix everything. I appreciate the work of the Justice 2 Committee in producing a good report and in taking a straightforward approach to the matter, because if we tried to do things differently there would be too much opposition.

Margaret Curran has mentioned single-seller surveys. I am appalled at the industry's response to our concerns about the current system, which has exploited so many people. In my constituency in particular, people tend to lose out because market prices are high and they spend thousands of pounds without having a house to show for it. The system must end now and the Parliament must ensure that it continues to challenge the industry until a sensible system is put in place.

Photo of Linda Fabiani Linda Fabiani Scottish National Party 3:33 pm, 3rd June 2004

Before I get into the meat of the bill, I echo what Pauline McNeill said about single-seller surveys. In the past couple of weeks, I spoke to a young couple who commissioned 16 surveys over the past year but lost out on all those properties. That system is becoming as big a barrier to first-time ownership as anything else is, as Nicola Sturgeon just said to me. I look forward to that being sorted out.

I should declare an interest, as I do whenever housing is on the agenda: I am a fellow of the Chartered Institute of Housing.

I laughed when the minister spoke about the service test—I was laughing with the minister, not at her—and whether someone is liable for repairs to a chimney if they have bricked up their fireplace. That reminded me of a time—gosh, it was two decades ago—when Glasgow City Council was pumping lots of money into tenement rehabilitation. I will not say where—

Photo of Linda Fabiani Linda Fabiani Scottish National Party

No, because the member will just say that it was the Tories who introduced that policy.

Photo of Linda Fabiani Linda Fabiani Scottish National Party

We know that the Tories spoiled everything later.

At that time, the district valuer would go round tenements to market value them. In the place where I worked, we realised that an awful lot of the properties had valuations that included storage heaters and showers. We got a bit suspicious about that and it turned out that the same storage heater and shower were being shifted up the street into every flat before the district valuer arrived. That is an old problem.

I am a bit disappointed that I am not a member of the Justice 2 Committee, which is considering the bill. In my experience of working in tenement rehabilitation over the years, one of the hardest things to do was to work out who paid for what and how to get money back from people. That was an absolute nightmare. The old tenement law and the default mechanism that was used if the title deeds did not sort out the problem were inadequate, no matter how often people tried to come up with a definitive version in guidance.

The bill is welcome and has been a long time coming. I have moaned about that, but I realise that the matter is complicated. We have now produced a good basis on which to make progress. Some of the aspects of the bill that will be considered at stage 2 have already been raised. The tenement management scheme is super, although I would like to examine it more as the bill progresses. To give my personal view—I have the benefit of a bit of experience—I would like the scheme to be firmed up a bit. I do not know about the legalities of the scheme because I am not a lawyer, but part of me thinks that it would be better if we made the scheme a statutory one that replaced title deed provisions. I am a bit worried that when new tenements come on stream, developers will find ways to sidestep the scheme and make things a bit easier for themselves, particularly if they also have a factoring role.

It would be better—again, I am speaking in a personal capacity—if we introduced a requirement for common insurance policies to cover tenement properties. I know that such a proposal has difficulties and I have read the committee's comments on the matter. I do not for one minute presume that I know better than the committee does because I did not hear the evidence. However, although it is difficult to impose a common insurance policy, it is also difficult to ensure that every individual in a tenement has appropriate insurance cover. As there are difficulties with both proposals, I would like the issue to be reconsidered. However, I welcome the fact that the bill insists that insurance must be for the reinstatement value rather than the market value. That is an incredibly important point.

Members have not yet mentioned the mediation scheme and dispute resolution, which are important. I hope that the scheme is robust and I look forward to finding out more at stage 2 about how it will be put in place.

I thank everybody who has given so much time to put together this wonderful bill.

Photo of Sarah Boyack Sarah Boyack Labour 3:38 pm, 3rd June 2004

I take a slightly different tack from most members who have spoken. Like Pauline McNeill, most of my constituents live in tenements. I have lived in a series of tenements for most of my life. The absence of legislation on the matter has caused huge problems for thousands of people. Much of my casework as a constituency MSP involves difficulties with people resolving disputes and dealing with the fact that their properties are becoming damaged through lack of maintenance and repair. For me, the test of the bill will be the extent to which it helps to resolve some of those problems. I give a commitment to traipse along to the Justice 2 Committee at stage 2 to test out some of those issues during the detailed line by line consideration of the bill.

I read with great interest the minister's comments to the committee and the committee's discussions at stage 1. I agree with nearly all the committee's conclusions, but I want to put other issues on to the table for discussion. I welcome the proposals for majority voting, which will mean that maintenance work will not be held up for years. However, one of the biggest problems is finding out who the owners are. There can be trails of people because of subletting or because private landlords are involved, which means that it is not easy to get everybody round the table.

I can give examples of tenement properties where it has taken more than five years to resolve issues. Even the statutory notice procedure that is used in Edinburgh is not able automatically to resolve some issues. There are major problems in knowing who owns a property. When discussing the Antisocial Behaviour etc (Scotland) Bill with the Communities Committee, ministers referred to a statutory measure to allow people to find out who an owner is. Such a measure is important and I hope that it will be examined in detail at stage 2.

The definition of maintenance is linked to antisocial behaviour, which is one of the core problems in tenements in my constituency. One of the biggest maintenance problems is the lack of control over access to stairwells, which affects new properties, Georgian tenements and even older properties. The lack of control over access can lead to residents being intimidated and attacked and having their stairwells and doors destroyed. It is a serious issue that is difficult to address, because it is not always possible to find out which owners are responsible. In addition, from my reading of the bill it appears that entry phones will not automatically be included in the maintenance provisions. I had a brief discussion about that with the Deputy Minister for Communities, who is conscious that the issue needs to be addressed. If we do not deal with it, owners will be left with the unpalatable choice of letting their stairwell deteriorate or stumping up disproportionately and letting other people off the hook. Often in such situations repeat damage is caused, so there is a link to antisocial behaviour, about which I know Mary Mulligan is aware.

It all comes back to the issue of responsibility. I am keen to see all the issues being tackled. At the moment, some of my constituents' lives are hell because there is no legal framework. The bill will make a difference to people's lives, and I very much welcome it. I also welcome the fact that the Justice 2 Committee and ministers recognise that there is no one-size-fits-all solution, because we have lots of different types of tenements. I could take members to tenements that have problems—even when they have management schemes—whether they are in the old town of Edinburgh or new tenements.

I know that the subject is dry and technical, but there is a lot of human misery out there because the bill's provisions are not in place. My concern is to test at stage 2 exactly what some of the bill's provisions will mean in practice. I am also keen to determine what is covered by the definitions of tenement and common block. Over the years, I have had experience of different statutory notices with different owners. I know that members have talked about chimney stacks and water tanks, but in Edinburgh we also have statues. I see a lot of wry smiles around the chamber, but replacing a statue that could fall over and kill somebody is a big public-safety issue. These are technical issues, but they are important if we are to resolve the disputes that are caused by the absence of the provisions that the bill will introduce.

I am also interested in joined-up government. I would like energy efficiency and renewables schemes to be examined to see where the boundaries are. I know that ministers are examining building regulations in which there are—again—issues around the definitions of maintenance and enhancement. In the interests of people who want to get ahead and apply new technologies to their properties, I am keen for those issues to be considered at stage 2. Ministers might want to comment on whether they see such measures appearing in the bill or in another piece of legislation. If the latter, I would be interested to hear from Mary Mulligan which bill she expects the measures to be in.

I welcome the bill. It may seem like a dry subject, but out there in the tenements in my constituency the issues are live. I welcome the fact that the bill will take us into the 21st century.

Photo of George Reid George Reid None

We move to closing speeches. I have to close the debate by 4 o'clock. It would be helpful if members could trim a minute off their speeches, otherwise the minister will get next to no time. I call Robert Brown.

Photo of George Reid George Reid None

About three minutes, but as you got only a minute's warning, you can go to four minutes.

Photo of Robert Brown Robert Brown Liberal Democrat

I welcome the bill, which is one of a number that have introduced significant housing reforms. I dare say the minister will feel that I am a little bit like Banquo's ghost, emerging from the Social Justice Committee to have another shot at the matter. For clarification, I should say that the day I gave up conveyancing practice, which was shortly after I completed my apprenticeship, was one of the happiest days of my life.

I will make a couple of brief points about issues that are broader than the bill. The minister will not be surprised by what I say. I joined this Parliament, as many others did, with ambitions for housing policy. It is important that we tackle the major housing issues in Scotland. It might not be best for such a bill to have emerged largely from the Scottish Law Commission, as there was little housing input in the genesis of the bill, which goes back over a long time.

Pauline McNeill said that the bill is not enough by itself and I think that that is right. I am keen on sinking funds—in fact, it is probably true to say that I am a sinking fund groupie. One of the key factors that lies behind that is the huge amount of housing disrepair in Scotland, particularly in tenement stock. If that disrepair is not dealt with according to the principle in the policy memorandum—that owners are, in principle, responsible for the maintenance of their buildings—a large bill will land on the public purse in years to come. I cannot remember the precise figure in the housing improvement task force document, but I recall that it was about £12 billion—that is a lot of money, and the public purse will not be able to find it. We need arrangements for dealing with routine repairs, such as broken windows in the close or slates missing from the roof, but we also need arrangements that are capable of dealing with larger issues, such as significant roof repairs and rough casting repairs.

Of course, we cannot go from one system to another just like that. People who have bought their houses have budgets, but there is an underlying economic argument that a lot of investment in housing goes into stimulating higher house prices rather than improving the housing stock. Good though the housing improvement task force's work is it does not have the right answers; neither do the bill or the Executive.

I ask the minister to say in her winding-up speech whether she is prepared to move forward, not on the issue of compulsory sinking funds—I do not think that that would be the right way forward—but on encouraging sinking funds into place by giving some concessions and support and by encouraging owner associations, which can be arbiters of good practice. I recommend to the minister the interesting suggestion that the Scottish Law Agents Society made, which is referred to in the committee's report:

"the Executive could increase the likelihood of such funds being established by providing a set of default statutory rules to clarify how such funds, where established, would operate."

That would be an extremely useful provision. The society was right to highlight as an example the

"provision for the money in such funds to transmit with the flat rather than be reclaimed by the owner".

I am sure that that is the right way to proceed. The society also highlighted the question of how the money is dealt with, invested and attached.

In poorer tenement stock, where people often buy houses in mixed ownership situations at the margins of affordability, we have a major problem. In the past, that problem was largely dealt with by the advance of the housing association movement, but we are not dealing with it at present. I hope that the minister will reassure me that the bill, important though it is, is not the end of the story and that we will get some movement on these important issues—for example, there are foreign models that we could follow. I support the bill.

Photo of Bill Aitken Bill Aitken Conservative 3:48 pm, 3rd June 2004

I have often accused the minister of chapping at the right door but up the wrong close. This is not one of those occasions; I think that the bill is worth while, and we support it. As usual, we have certain caveats, which are perhaps worth underlining.

I draw the minister's attention to the fact that, behind the legislation, there seems to be a wish for common insurance policies to be imposed on property owners. I say from experience that that is a dangerous path to go down. Insurance is taken out at a certain stage and a reinstatement value is put on the property, but no one takes responsibility for ensuring that the sum insured remains adequate as the years pass. From personal and professional experience, I can highlight a number of cases in which that has had disastrous consequences for people, so I think that the matter has to be reconsidered.

The issue that Annabel Goldie highlighted about repairs, which might become a matter for the purchaser, must be addressed. It is clear that the most sensible solution is for the title deed to have a marker against it to the effect that sums are likely to be outstanding—that would prevent any difficulties from arising. There is usually a simple answer to such problems.

As I am talking of simple answers, Pauline McNeill made a valid point about sellers' surveys, but I suggest to her and others that the situation is not as simple as one might think. Such a system might well work in the easy case, such as that of the Wimpey-type flat in which I live, but it would be difficult to find someone who was prepared to provide an indemnity in relation to a more complex and larger property. Anybody who bought a larger property—even one in a tenement—would be ill advised to accept a seller's survey, because all sorts of difficulties could arise later. The idea could be considered and adjusted, so I am flagging up that problem. It is superficially attractive but, once it has been examined, the consequences that could arise become apparent.

The bill is welcome. It will ease many of the problems that members have highlighted. We look forward to stage 2 with rapt anticipation.

Photo of Michael Matheson Michael Matheson Scottish National Party 3:51 pm, 3rd June 2004

I thank the Justice 2 Committee for its detailed and considered report on the bill. Like other members who have spoken, I welcome the bill's general principles.

As Margaret Smith said, the bill has been a long time in the making. The first paper to propose it was published in 1990 and the bill largely implements the recommendations in the report that the Scottish Law Commission published on 25 March 1998. Therefore, the bill has been some 14 years in gestation. I am sure that many tenement owners will welcome the bill's passage through Parliament now.

As the minister said, this is the third and final bill to deal with property law reform. The other such pieces of legislation were the Abolition of Feudal Tenure etc (Scotland) Act 2000 and the Title Conditions (Scotland) Act 2003. I had the pleasure of being a member of the Justice and Home Affairs Committee and of the Justice 1 Committee when they considered that equally interesting legislation and I am delighted that my colleagues on the Justice 2 Committee are enjoying considering the Tenements (Scotland) Bill as much as we enjoyed considering those acts. My colleagues on the Justice 1 Committee and I were somewhat disappointed when the bill was passed to the Justice 2 Committee, which prevented us from participating in its consideration.

The bill is largely technical but, as the minister said, it could have a considerable impact, because Scotland has 800,000 tenement flats. As most members said, the bill has two main objectives: to clarify and restate the common law and to provide a default mechanism for a statutory tenement management system. Those two objectives will combine to provide greater clarity and certainty for tenement owners in dealing with repairs and to provide a default position should problems occur.

Sarah Boyack made the important point that the test of the bill will be whether it addresses many of the problems that tenement property owners experience. That has yet to be proved, but I hope that the bill will provide the redress that many people want for their present problems.

Pauline McNeill expressed the important point that we should not consider law to be the only way to reform. There is good cause for examining how the system of factors and factoring operates. A good factor who deals with issues proactively can make a considerable difference.

As Sarah Boyack said, the bill is technical, but it has a human face in the form of the people who suffer chronic problems because repairs have not been undertaken on their properties as a result of the failure to have proper legal provisions in place. If the Executive addresses at stage 2 or stage 3 the recommendations in the Justice 2 Committee's report, the bill will deliver what it is meant to deliver.

Photo of Mary Mulligan Mary Mulligan Labour 3:55 pm, 3rd June 2004

I would like to add my thanks to the committees that have been involved with the bill and to those members who have taken part in this afternoon's debate—but I do not have time, so I will move on quickly.

A number of issues have come up this afternoon, many of which were considered thoroughly by the Justice 2 Committee, which has done an excellent job in examining the technical issues that arose on the bill. What was probably the most contentious issue was highlighted by Nicola Sturgeon, Cathie Craigie, Annabel Goldie and others: that of the liability of the incoming purchaser for costs owed. I will make a few brief points on that issue now, although I have no doubt that we will return to it in the course of our stage 2 and stage 3 deliberations.

The bill provides that, if there is an outstanding liability, for example for common repairs, when a flat is sold, owners could pursue either the buyer or the seller for the money. The situation at the moment is that only the seller would be pursued. As I am sure Michael Matheson will know, there is an identical provision in the Title Conditions (Scotland) Act 2003. It might be a shock for a buyer who does not know about the outstanding liability, but the occasions on which the issue will arise will be fairly rare. We need to consider which measures must be put in place to deal with what could be a fairly rare situation, rather than overload the system.

Photo of Mary Mulligan Mary Mulligan Labour

I really do not have time to take an intervention, but I will come back to Linda Fabiani if I get a chance.

At the moment, tenement owners themselves need to pursue the seller, and if they cannot find the seller, they have to share the cost among themselves. That is why we are extending the law to cover the purchaser too. Having discussed the matter with various bodies, we recognise that there is opposition to our putting in place a marker on the property being sold. The Scottish Law Commission and the Registers of Scotland have told us that that is not the way to go about it, partly because they see that as a solution that is too onerous for the problem. We need to keep the proposal under review, recognising that there is concern about its unfairness, and to address it further in the course of our deliberations.

The issue of identifying and contacting owners was raised. A number of measures are now in place to ensure that we can address that problem. The measures that Cathie Craigie introduced to the Antisocial Behaviour etc (Scotland) Bill at stage 2 to identify landlords will give us another route by which to identify those who own properties. People can also inquire about that through the Registers of Scotland. Section 70 of the 2003 act places a duty on any person who was an owner of property with a common repair and maintenance burden to disclose any helpful information to the person with an interest in that burden. There are already a number of solutions, although we accept that they are not perfect. The problem of identifying owners, which arises frequently, has been highlighted by a number of members this afternoon. We wish to continue to pursue that area.

Robert Brown and Cathie Craigie mentioned the issue of sinking funds. The Executive believes that sinking funds are to be encouraged, but that they should be voluntary. There are a number of problems with making them compulsory, and there are ways in which they would not be of benefit to all owners. We recognise some of the benefits that have arisen where sinking funds have operated, and we would therefore encourage good practice to be established in their use.

Photo of Mary Mulligan Mary Mulligan Labour

I am sorry—I am in my last minute.

If the Parliament agrees to pass the Tenements (Scotland) Bill, it is intended to commence it on the same date on which the provisions of the Abolition of Feudal Tenure etc (Scotland) Act 2000 and the Title Conditions (Scotland) Act 2003 will be commenced: 28 November. That will be a significant date, as it will be the date of the introduction of a new form of land regulation that is modern, simple and fair.

If enacted, the Tenements (Scotland) Bill will play a vital part in the revamp of property ownership. The law relating to tenements in Scotland is primarily a devolved area. In particular, Scots property law is separate and different from that which applies in the rest of the United Kingdom. I believe that, given this afternoon's consensus, the proposed reform will be an ideal reform to be taken forward by the Scottish Parliament.

Photo of George Reid George Reid None

I am grateful to the minister and am sorry to have truncated her speech. I will speak slowly, as I see Mr Henry arriving. He is now here, so we will move on to the next item.