Following the Spurtle’s recent coverage of potential legislation around how Scotland’s flatted dwellings are maintained and repaired (12.12.25; 16.12.25), reader Merlin Lewis offers his thoughts on problematic considerations still needing to be resolved.
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I believe three specific but very important items are currently not included in the ongoing dialogue about compulsory owners associations (OAs) stimulated by publication of the Scottish Law Commission’s ‘Report on Tenement Law’ [attached below].
1. Registration vehicle. There has not, to my knowledge, been confirmation on visibility of the legal entity of owners associations as legal personalities (see Report, ch. 4).
There are potentially very serious safeguarding concerns at play. It must be clarified how any new bespoke body corporate (p. 40, 4.7) would be visible. It cannot solely be held by the Scottish Government as it needs to be visible not only to banks (and lenders?!) but also to legal systems should someone, for example, want to bring a claim against an OA. How would the identity of OA members be properly protected? If the list were not secure then individuals and their properties, which might be where they live, could be found.
This is in addition to the simple rights to privacy.
I cannot see any discussion of this within the Report (pp. 20–21) where it introduces ’Embedding owners’ associations within the conveyancing infrastructure: a tenement register?’
2. Management of funds (banks and insurance)
It remains at the discretion of banks to accept or reject OAs for bank accounts and to get insurance. The Report (p.20, 2.32) fails to set out just how hard a challenge it will be getting banks and insurance providers to recognise and accept a new legal entity. This must be addressed pre-legislation otherwise owners face: (a) braking the law; (b) financial penalty if the market does not provide competitive or affordable products.
There is no plan, nor a plan to make a plan, to address this. It could take literally years. And I’m not sure it’s even possible to force a bank to lend to an entity if it doesn’t want to, especially if that entity is not a desirable customer (not borrowing, high-risk, and not keeping strong reserves).
3. Risks of alternatives to bank accounts
The requirement for OAs to use bank accounts notwithstanding, Edinburgh Council currently endorses money-management alternative Novoville. It’s unclear whether Novoville will satisfy the requirements of the new legislation, but in any case it is not regulated or guaranteed in the same way banks are.
Novoville (or similar services) might not be able to handle the massive uplift in OAs using their services (i.e. the associated increase in the amount of cash they'd be handling, and the push to develop their business). If they should fail or be unable to retain OA money for any reason, there is currently no government guarantee for people’s lost money.
Indeed, even with normal bank accounts, it’s not clear whether the usual guarantee would offer security to an OA account (in the event of a bank failing).
I think these are very serious considerations and will be contacting the relevant bodies about them. In the meantime, I am sharing them with the Spurtle because: (a) you have covered this subject recently; and (b) you will be able to appreciate the very real and personal ramifications which would be felt if these issues come to fruition.
There is so much work still to be done on this.