The 'Missing Share'

24 Oct 2018

Whether renting or owning a property, many of us will have dealt with the frustration of a communal area that is not quite up to standard at some point in our lives.

 

Usually, people work together, often through a factor to address this. However, sometimes owners are unable or occasionally unwilling to contribute to common works. This can lead to a deterioration in the condition of the building and has a direct impact on the living conditions of other residents. These may include private, local authority or housing association tenants.

 

To help maintain and improve Scotland’ social housing stock, the SNP Government has embarked upon an ambitious affordable house building programme, constructing another 50,000 affordable houses from 2016-2021, including 35,000 for social rent. Only this month it was revealed that the SNP Government has allocated £102,188,000 over five years to North Ayrshire Council to help it build 1,732 new Council homes. 

 

The Scottish Parliament has also passed legislation such as the Housing (Scotland) Act 2014, to ensure better protection of tenancy rights and conditions.

 

In this Act, the SNP Government introduced ‘missing share’ powers, allowing local authorities to carry out necessary communal works and recuperating the share from unwilling owners, as long as a majority of owners had agreed to the work being undertaken.

 

Also included was the opportunity, subject to consultation, to extend those powers to Registered Social Landlords (RSLs).

 

A registered social landlord currently has a right, as do other owners, to participate in the majority decision-making process set out in the tenement management scheme. If the RSL owns a majority of the flats or can form a majority with some of the other owners, work to repair or maintain common parts can go ahead. However, if an owner cannot or will not pay their share, the RSL is in the difficult position of using tenants’ money to pay for owners’ shares. If its constitution or covenant allows that.

 

Alternatively of course, an RSL can leave the repairs and maintenance work undone. The new regulations provide a more effective route to ensure owners pay for their share of common works and allow RSLs to enforce majority decisions by creating a repayment charge, which is a form of security recorded in the land register against title deeds.

 

The landlord can seek to recover the charge in instalments from the owner in question over five to 30 years and this security means that the owner will be obliged to pay their share of costs before they can sell their home. This is however not a solution in every case. It will not help if the landlord cannot get a majority in favour of works or if the value of the owner’s flat is so low that their equity does not cover a charge. However, it is useful for landlords keen to repair and maintain buildings they share.

 

When this proposal came before the Scottish Parliament’s Local Government and Communities Committee on which I sit, I was pleased to support it as did Tory and Green MSPs. Although Labour’s MSP was absent, I have no reason to believe they will not add their support, to  help improve social housing property standards across Scotland.

 

The extension of the ‘missing share’ power to RSLs will give landlords such as Cunninghame Housing Association, Irvine Housing Association and Trust Housing Association the opportunity to recuperated the missing share from owners who are unwilling to pay their fair share for necessary maintenance, as long as there was a majority that voted for it. Hopefully North Ayrshire Council will soon start using their missing share powers too!  

 

ENDS

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