JUST over a week ago, the Scottish Law Commission (SLC) published its discussion paper on changes to the law of the tenement in Scotland.

It proposes that the owner of every tenement flat in Scotland should be required to enter into a compulsory association with the owners of the other flats in the same building.

The purpose of the owner’s association (OA) would be to manage maintenance and repair of the building’s fabric. This would include appointing an agent as manager of the OA – most likely a property factor company – to organise works.

The SLC’s consultation runs until August 1 this year, before a final report is published and a draft bill arrives in 2026.

It’s estimated there are over one million tenement flats in Scotland – some 40% of all residential dwellings. Accordingly, this proposed law reform will be of widespread importance.

The definition of a tenement includes two or more related but separate flats divided from each other horizontally.

Built Environment Forum Scotland suggests that up to half of all tenements in Scotland need critical repairs now and nearly a third need urgent attention.

The idea of the compulsory OA is to help facilitate repairs. At present, the title deeds of a property take precedence as regards maintaining common property, such as the common close, roof, external supporting walls and stairwell.

Often, title deeds can be vague or silent on some issues and that’s when the 2004 Tenements (Scotland) Act comes in and the tenement management scheme (TMS) fills in any gaps. The SLC propose a new statutory scheme as part of the OA to replace the TMS.

The most frequent problem for flat owners is one person fails or refuses to pay for their share of essential repairs or maintenance.

Section 50 of the 2006 Housing (Scotland) Act requires local authorities to establish a “missing shares” scheme where owners can apply to the council and it can pay the missing share and pursue the defaulting owner for repayment. The 2006 Act also provides for councils to set up schemes of assistance whereby loans or means tested grants are available to help ensure necessary repairs take place. Eligibility rules are available on the council’s website.

The SLC consultation is also a good opportunity to address the ability of some property factors to use the right to register a notice of potential liability for costs (NPLC) as a punitive form of debt recovery for their own fees. Typically, this is where one owner hasn’t paid their way.

A property factor can register a NPLC against that person’s property, which means anyone who buys that flat inherits the debt – so the sums due will have to be repaid in order to sell the property.

The difficulty is that NPLCs are often registered for disputed sums and it is common for this process to have no real oversight on the fairness of the assertions recorded. In the case of Mallick v. MXM Property Solutions (2021), the First-tier Tribunal held that a NPLC should relate directly to maintenance and works to common property and not to general debts or legal fees.

This decision was overturned by the Upper Tribunal for Scotland, which held that section 11 of the 2004 Act only required costs to be “related to” maintenance or work.

Perhaps it’s time to amend the law on NPLCs?