Beware ‘MacDUFF’ Scottish consumer-friendly land laws, say freeholders in lobbying report to save their incomes

Our English leasehold laws are much better … but then they go on to cite a Scottish law that doesn’t actually exist

The freeholders’ lobbying effort “Rebalancing the relationship between freeholder and leaseholder” offers up Scottish flat ownership as a dire warning to ministers seeking to reform English leasehold law.

But it gets quite a bit wrong.

It reads:

“In 2004, legislation was brought in by the Scottish Parliament to abolish the 800-year old traditional leasehold model of ownership (Feuhold) (Tenants (Scotland) Act 2004), moving towards a residential-led model of ownership.”

This appears to be a mistake (see below), as no such law exists on the Scottish statute book.

“However, leasehold abolition began much earlier in Scotland, with the Land Tenure Reform (Scotland) Act 1974.

“In 2012, the Scottish Government brought in legislation automatically converting remaining long leases into outright ownership. This removed the role of professional freeholders as stewards and residents were given control of managing individual flats, sharing costs and collectively running complex, multi-storey apartment blocks.”

In addition, the freeholders’ report references deteriorating housing stock in Scotland (Housing and Health in Scotland: Scottish House Condition Survey 2002), revealing that 40% of owner-occupied tenement flats had at least one element in a state of urgent disrepair. This “meant nearly half of these property owners did not carry out urgent repair works”.

LKP is rather sceptical of RICS members dreaming up problems for them to solve at considerable expense.

And leaseholders have every reason to be wary of an institution that takes its professional regulation so casually as to mess up the disciplinary case against managing agent Benjamin Mire … and had to apologise and reinstate 317 members whom it had either disciplined or struck off for breaches of RICS rules.

Case against Benjamin Mire collapses, as RICS disciplinary process descends into shambles

“Over recent years the problem has worsened,” say the freeholders. “Figures from 2009 10 show that 79% of all Scottish housing stock was in disrepair, with 42% of dwellings in need of urgent repair and 72% with disrepair to critical building elements.

Analysis by RICS in 2019 concluded that this was the result of a lack of regular, ongoing maintenance, which had previously been overseen by professional freeholders. (Common Repair Provisions for Multi-owned Property: A Cause for Concern (The Provisional Report to the Royal Institution of Chartered Surveyors and Built Environment Forum Scotland, 2019)

“In 2016, the Scottish House Condition Survey (Key Findings (Scottish House Condition Survey 2016) found that 82% of housing stock is in need of some form of repair. This is particularly the case in relation to flats. In contrast, a Government report (English Housing Survey, Stock profile and condition, 2017 (Ministry for Housing, Communities and Local Government, 2019) in 2017 found that only 19% of homes in England and Wales did not meet the Decent Homes Standard.

“The scale of the problem is a worrying prospect if England were to follow suit, and more importantly, it is a trend that consumers and the Government are already wary of [No reference given].

“When leaseholders were questioned about building standards, the majority of respondents said they were concerned that standards would not be maintained if residents took on the role of the Accountable Person. Specifically, 67% of respondents felt that standards would drop, reflecting the reality of housing dilapidation north of the border.”

LKP’s Scotland land law correspondent responds:

The system of quasi-communal ownership of flats in Scotland (known as the law of the tenement) has been in place since at least the mid-1600s (Scottish Law Commission, Report on the Law of the Tenement (Scot Law Com No 162) (1998), paras 2.1-2.3.).

Each flat is in individual ownership. Shared areas of the building are in shared ownership of all the flat owners. (The relevant law is now contained in the Tenements (Scotland) Act 2004 ss1-3 and 8-9.)

This restates the pre-existing common law, as summarised in Scottish Law Commission, Report on the Law of the Tenement (Scot Law Com No 162) (1988), paras 2.4-2.12.)

Responsibility for the management and maintenance of the building is imposed jointly on all flat owners by the inclusion of obligations to that effect in the titles to each of the flats.

Scotland has never had an equivalent to the role the freeholder plays in relation to flats in England.

The suggestion in the Savanta [the freeholders’] report that a feudal superior in Scotland was equivalent to an English freeholder in relation to flat ownership is wholly inaccurate.

In particular, a feudal superior did not own the building separately from ownership of the flats and had no right or responsibility to manage or maintain it.

The Savanta report contains significant inaccuracies.

It states that, in 2004, legislation was brought in by the Scottish Parliament to abolish the 800-year old traditional leasehold model of ownership, and cites the “Tenants (Scotland) Act 2004”.

First, as noted above, the feudal system was not equivalent to the English leasehold system in relation to the way ownership was or is structured in blocks of flats. Its abolition had no bearing on the law of the tenement.

Second, the feudal system was abolished by legislation passed by the Scottish Parliament in 2000 (Abolition of Feudal Tenure etc (Scotland) Act 2000).

Third, the “Tenants (Scotland) Act 2004” does not exist.

The report may have meant to refer to the Tenements (Scotland) Act 2004. This Act codified the long-standing common law of the tenement and introduced a new process for decision-making in relation to the parts of the building which are the shared responsibility of flat owners.

It had no effect on the feudal system. It also had no effect on the way in which blocks of flats were owned.

The report also states that, in 2012, the Scottish Government brought in legislation automatically converting remaining long leases into outright ownership.

It is claimed this removed the role of professional freeholders as stewards.

Long leases existed in Scotland as an alternative to feudal tenure, and were used only in the very small minority of cases where feudal tenure was not possible. (Scottish Law Commission, Report on Conversion of Long Leases (Scot Law Com No 204) (2006), para 1.7.)

At the time leasehold conversion took place, fewer than 9,000 long leases existed in Scotland, the majority of which related to commercial property. (Scottish Law Commission, Report on Conversion of Long Leases (Scot Law Com No 204) (2006), Appendix C.)

There is nothing in the research carried out by the Scottish Law Commission prior to the 2012 legislation to suggest that long leases were mainly held by professional freeholders or an equivalent.

Standing the ownership of blocks of flats in Scotland under the law of the tenement as explained above, it would be extremely surprising to find that long leases were held by “professional freeholders” or an equivalent at all.

The freeholders’ report “Rebalancing the relationship between freeholder and leaseholder” can be read here: