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Before section 5

Tenements (Scotland) Bill: Stage 3 – in the Scottish Parliament at 3:01 pm on 16th September 2004.

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Photo of Murray Tosh Murray Tosh Conservative 3:01 pm, 16th September 2004

Group 3 is on an ombudsman for tenements. Amendment 79, in the name of Dennis Canavan, is grouped with amendment 80.

Photo of Dennis Canavan Dennis Canavan Independent

The main purpose of amendment 79 is to establish an ombudsman service to try to resolve disputes between residents of different flats in a tenement, or disputes between a resident and the factor, or manager, of the tenement.

At present, if the tenement is owned by a registered social landlord, certain categories of complaint may be referred to the public services ombudsman. However, no such service exists for residents in tenements that are privately owned. Residents can, of course, take legal action through the courts, but such a process can be lengthy and expensive. That was certainly the experience of some of my constituents who live in privately owned, sheltered accommodation at Springbank Gardens in Falkirk. The residents are all owner-occupiers, but a company called Sheltered Housing Management Ltd is the manager and is supposed to provide certain services.

Some of the residents became increasingly dissatisfied with the poor standard of service provided by the manager and with the lack of consultation, lack of transparency and lack of accountability in respect of its decision making and budgeting. Yet the company was imposing service charges that some of the residents considered to be extortionate. From 1985 to 2002, the service charges increased by 86.8 per cent. As a last resort, some of the residents withdrew or withheld their service charges and Sheltered Housing Management Ltd went to Falkirk sheriff court to recover the payment. The sheriff dismissed the action and awarded costs against Sheltered Housing Management Ltd because it had no legal right to impose the charge under the original minute of agreement. However, Sheltered Housing Management Ltd then went to the Court of Session and, in what can only be described as an incredible judgment, Lord Nimmo Smith allowed retrospective amendment of the original minute of agreement and awarded costs against the residents. The expenses totalled £50,000, split between nine residents, all of whom are elderly, retired people.

I submit that such a dispute could, and should, have been settled without the expense of going to court, but Sheltered Housing Management Ltd continues to behave in an arrogant and unaccountable fashion. Following a complaint from a constituent, I wrote to Mr Miller of Sheltered Housing Management Ltd on 3 November last year; I am still awaiting a reply. I realise that, under recent legislation, if a majority of residents want to sack the manager and appoint someone else, they can do so, but that should only be a last resort. Even one resident, or a minority group of residents, within a tenement should have the right of redress without having to go to court. Amendment 79 therefore seeks to set up an ombudsman service to try to solve such disputes without court action. As members will see from subsection (4) of the section that amendment 79 would introduce, regulations made under the section may provide that an application to the sheriff may not be made unless the applicant has already sought to have the agreement resolved through the offices of the ombudsman.

I would hope that the Executive will respond positively to my amendment and I hope that the Parliament will accept it in the interests of justice, not just for my constituents but for others who, I am sure, are in a similar situation in many other constituencies throughout Scotland.

I move amendment 79.

Photo of Pauline McNeill Pauline McNeill Labour

I want to say a few words on amendment 79 because I have a great deal of sympathy for Dennis Canavan's proposal. In my constituency, there is a high number of landlords, and in particular absentee landlords, some of whom are good landlords but a minority of whom are not and who are not really interested in maintaining or making improvements to their properties. We have even had cases in which that has resulted in the demolition of a building.

There are some issues that might not be dealt with in the spirit of the Tenements (Scotland) Bill and, if things were unclear, it would be useful to be able to take such matters to a third party to be able to talk out the issues. One of the issues of which I am thinking is the fact that, if a social landlord owns more than half the properties in a tenement and there is a minority of owner-occupiers in the block, in a vote, some people would be voting on a financial burden that they would have to pay while others would be voting on a bill that would be picked up by someone else. The decision in such a vote might seem unfair.

Therefore, I support the idea that, in certain circumstances, there should be a third party to whom tenants and owners should be able to go for mediation.

Photo of Annabel Goldie Annabel Goldie Conservative

I, too, am not unsympathetic to what Mr Canavan seeks to achieve. However, my reservation is twofold. The bill goes a long way towards eradicating many of the difficulties that have plagued tenemental ownership and there are remedies in the bill that might have been relevant to and welcomed by Mr Canavan's constituents all those months ago. My principal concern is that an ombudsman is not a way to address that issue because I suspect that people in the position of Mr Canavan's constituents are looking for enforceable solutions. The role of ombudsman does not provide that, whereas the bill contains available remedies.

For that reason, I am unable to support amendment 79, but I am sympathetic to the reasons for its being lodged.

Photo of Karen Whitefield Karen Whitefield Labour

Like other members who have spoken, I support the intention of amendment 79. Mr Canavan's constituents' terrible experiences demonstrate the need for the Executive to take action on mediation. Those are views that many members share and Labour members on the committee raised the issue with the minister. We believe that there is a need for the statutory provision of mediation, not only under the bill, but under other bills and acts, such as the Antisocial Behaviour etc (Scotland) Act 2004. For that reason and because of the assurances that we received from the minister that the Justice Department is carrying out research into mediation, we decided that the bill is not the right vehicle for the inclusion of mediation. However, it is something that the Executive needs to consider and introduce so that people do not always have to have recourse to the courts but are able to sort their disputes out amicably and quickly without too much emotional or financial cost.

Photo of Kenny MacAskill Kenny MacAskill Scottish National Party

Like Annabel Goldie, Pauline McNeill and others, the Scottish National Party is sympathetic to what Mr Canavan proposed. There is a significant number of areas, not only in Falkirk, where there are problems.

I am grateful to the minister for taking time to discuss matters with me and for letting me hear the Executive's position. Our view is that it would be wrong to embark on a parallel course of action to that approach. It appears that ombudsmen are a last court of appeal to some extent; they are involved after mediation has been tried, after litigation has taken place and where there is no other avenue or recourse for an individual. To have a parallel route might simply create more problems.

What is important is that, as the minister has assured me, we will initially attempt to deal with matters by mediation. If that is unsuccessful, there will be the right to litigation, but to have a further right of appeal to an ombudsman after that is not required. If, at some stage in future, it is felt that an ombudsman is required because mediation has been attempted and has failed and litigation has been tried and been unsuccessful, perhaps there should be an ombudsman. The idea that we could justify yet another ombudsman in a small country dealing with a limited number of cases seems to me to be untenable, but the role could be considered as part of an overall ombudsman for individual rights.

We must take cognisance of the valid points that Mr Canavan made. I am in tune with the Executive's approach that mediation should initially be tried. If that fails, there is litigation. That is the way to settle disputes, not a twin-track approach that may result in greater difficulties.

Photo of Mike Pringle Mike Pringle Liberal Democrat 3:15 pm, 16th September 2004

I agree with Kenny MacAskill and others. I have much sympathy for Dennis Canavan's position; it is a pity that he did not raise the issue at stage 1, because that would have given us a full opportunity to debate the situation and we might have asked some of our witnesses what they thought of it. The minister was fairly receptive to the Justice 2 Committee's views and we might have considered and incorporated the proposal. However, Kenny MacAskill is right: if we feel that the situation is causing a problem in the future, I am sure that we will be more than happy to return to it.

Photo of Mary Mulligan Mary Mulligan Labour

I will deal first with the amendments on the ombudsman, but I will return to the specific situation that Dennis Canavan described.

The Executive does not believe that an ombudsman for tenement disputes is necessary. The evidence is that few tenement disputes end up in the sheriff court and it is hoped that the bill will make disputes among owners, which are typically over repayment for repair work, become increasingly rare.

Section 6 makes it clear that the sheriff court is the place in which to determine legal issues that relate to the operation of the management scheme for a tenement, such as whether a scheme decision was validly made, whether it related to scheme property and who is liable for the cost of repair.

Section 5 permits an owner to apply to the sheriff for an order to determine whether a scheme decision by a majority of owners in a tenement should be annulled because it was unfairly prejudicial to an owner or not in the best interests of all owners.

I note that amendment 79 would make it necessary for owners to seek the proposed ombudsman's assistance only in the case that section 5 deals with and not in the section 6 case. I suggest that that makes the amendment incoherent.

The Executive acknowledges the valid argument for making available to tenement dwellers an alternative method to resolve disputes that does not involve the expense and stress of raising an action in the sheriff court. In fact, the housing improvement task force suggested that in some cases, groups of owners might find it helpful to obtain outside assistance to resolve disputes about work that needs to be undertaken.

The Executive agrees that people should be encouraged to resolve disputes without going to the court and is keen to raise awareness of alternatives that are already available. There is therefore no need to create an ombudsman for tenements. As Karen Whitefield said, the Executive recently published a booklet that gives information and advice on alternative dispute-resolution methods. That information is also available online.

We are working with organisations such as Scottish Mediation Network to develop awareness of mediation and to support the growth of mediation services throughout all sectors. We already support mediation projects in several areas. For example, at the sheriff court here in Edinburgh, we are considering options for encouraging the greater take-up of mediation and making the link between people who are willing to use mediation and the service providers that are available.

I take issue with Mike Pringle. The matter that Dennis Canavan raises was brought up in committee; my colleague Ken Macintosh asked several questions about it and brought it to our attention. For that reason, we examined the matter, but we decided that the bill deals with ownership in tenement blocks, whereas occupiers of shared-equity properties, for example, which may be what Dennis Canavan speaks about, do not own the properties—they own equity shares in a company. We therefore felt that the bill was not the place to deal with the issue. However, I have heard the concerns that Dennis Canavan and my colleague Ken Macintosh have expressed and we are happy to look further into whether we could resolve the situation. However, it is a complicated matter and one for which it may be difficult to provide answers without creating unwelcome side effects, so we will have to consider it carefully. I do not think that the amendment that is in front of us today addresses that specific, so I ask members not to support amendment 79 because other methods, such as mediation, might be preferable.

In response to Pauline McNeill's point about an owner who owns the majority of flats within a tenement, we believe that it would be difficult to interfere with the voting process along the lines of who the owners are and to restrict particular owners because they own more than one flat. It is only owners who would vote—it would not be tenants within the properties—so each owner would have equal access to voting rights. We think that that is the fairest way to deal with the issue.

Photo of Murray Tosh Murray Tosh Conservative

I ask Dennis Canavan to wind up the debate and to indicate whether he will press amendment 79.

Photo of Dennis Canavan Dennis Canavan Independent

I listened carefully to participants in the debate and in particular to what the minister had to say, but I am not convinced.

I welcome the fact that the Executive is at least considering introducing its own measures for mediation in housing disputes, but that should not exclude the acceptance of my amendment. If at some future date it is felt that the powers of my proposed ombudsman should be extended or amended, so be it. The Executive could introduce regulations for parliamentary approval to bring such amendments into effect. I take on board the criticism that we are perhaps in danger of setting up too many ombudspersons, but I would certainly be in favour of there being one ombudsperson for all disputes relating to housing matters. Although amendment 79 aims specifically to set up an ombudsman service for tenements, it could be extended at a later date to include other types of complaints relating to housing.

Annabel Goldie expressed some sympathy for the purpose of my amendment—I am grateful to her for her sympathy—but she argued against the amendment on the grounds that the findings of the ombudsman would not be legally enforceable. However, that is the case with most of the ombudsmen who are in existence, whether in the public sector or the private sector. That is not sufficient reason for not setting up an ombudsman in the first instance. In some cases, the ombudsman might be able to resolve the dispute in a voluntary fashion without it having to go to court, but if the ombudsman's intervention could not solve the dispute, either party would still have the right to seek legal action through the courts.

For all those reasons, I hope that Parliament will accept amendment 79. I press my amendment to a vote for two reasons: first, I think that it is an excellent amendment and, secondly, I want to test the new-fangled electronic voting system to ensure that it works.

Photo of Murray Tosh Murray Tosh Conservative

On that basis, I am sure that we are all obliged to Mr Canavan.

The question is, that amendment 79 be agreed to. Are we agreed?

Members:

No.

Division number 1

For: Ballance, Chris, Canavan, Dennis, Fox, Colin, Harvie, Patrick, Ruskell, Mr Mark, Scott, Eleanor, Sheridan, Tommy, Swinburne, John, Turner, Dr Jean
Against: Adam, Brian, Aitken, Bill, Alexander, Ms Wendy, Baker, Richard, Barrie, Scott, Boyack, Sarah, Brankin, Rhona, Brocklebank, Mr Ted, Brown, Robert, Butler, Bill, Chisholm, Malcolm, Craigie, Cathie, Cunningham, Roseanna, Curran, Ms Margaret, Davidson, Mr David, Deacon, Susan, Douglas-Hamilton, Lord James, Eadie, Helen, Fabiani, Linda, Ferguson, Patricia, Fergusson, Alex, Finnie, Ross, Fraser, Murdo, Gibson, Rob, Gillon, Karen, Glen, Marlyn, Godman, Trish, Goldie, Miss Annabel, Gorrie, Donald, Grahame, Christine, Henry, Hugh, Home Robertson, Mr John, Hughes, Janis, Ingram, Mr Adam, Jackson, Dr Sylvia, Jackson, Gordon, Jamieson, Cathy, Jamieson, Margaret, Johnstone, Alex, Kerr, Mr Andy, Lamont, Johann, Livingstone, Marilyn, Lochhead, Richard, Lyon, George, MacAskill, Mr Kenny, Macdonald, Lewis, Maclean, Kate, Macmillan, Maureen, Martin, Paul, Marwick, Tricia, Maxwell, Mr Stewart, May, Christine, McAveety, Mr Frank, McCabe, Mr Tom, McConnell, Mr Jack, McFee, Mr Bruce, McMahon, Michael, McNeil, Mr Duncan, McNeill, Pauline, McNulty, Des, Milne, Mrs Nanette, Mitchell, Margaret, Morgan, Alasdair, Morrison, Mr Alasdair, Muldoon, Bristow, Mulligan, Mrs Mary, Mundell, David, Munro, John Farquhar, Murray, Dr Elaine, Neil, Alex, Oldfather, Irene, Peacock, Peter, Peattie, Cathy, Pringle, Mike, Purvis, Jeremy, Radcliffe, Nora, Robison, Shona, Robson, Euan, Rumbles, Mike, Scanlon, Mary, Scott, John, Scott, Tavish, Smith, Elaine, Smith, Iain, Smith, Margaret, Stephen, Nicol, Stone, Mr Jamie, Wallace, Mr Jim, Watson, Mike, Welsh, Mr Andrew, White, Ms Sandra, Whitefield, Karen, Wilson, Allan

Photo of Murray Tosh Murray Tosh Conservative

The result of the division is: For 9, Against 93, Abstentions 0.

Amendment 79 disagreed to.