In March 2003, a draft document was prepared, based on the
recommendations of the Scottish law commission, asking for views and opinions
relating to the draft tenements Scotland Bill. The document ran to some 10
chapters, and in chapter 6, the issues relating to insurance in respect all
blocks of flats was discussed. In
essence, the commission recommended that
blocks of flats
insurance for tenement buildings should be made compulsory. Whilst
insurance is usually required to secure a mortgage on a property. It is not
normally compulsory by Act of Parliament. It was felt that the owners of
tenement buildings were in a fairly unique situation, in that their own
individual properties to a certain extent relied on the upkeep and maintenance
off neighbouring properties in the same block. Without adequate insurance
protection being kept in force, it was felt that an individual flat owner may
not be fully protected in the event that a neighbour does not ensure that a
insurance policy is kept in force.
The commission went on to suggest that the
blocks of flats insurance
should be provided for the full reinstatement off the property and not for its
market value. This has led to some confusion as quite often with the
construction and build off these buildings, the reinstatement value is often
more than the market value. The commission pointed out that in the case off
stone constructed properties sums in sure could quite often be higher than the
market value. If you all concerned with regard to obtain an adequate sum insured
in respect of flats, a professional opinion, should always be sought, in most
cases, following a survey for a mortgage lender, the surveyor will state the
required sum insured for insurance purposes. The commission also noted that whilst it felt compulsory
insurance for tenement blocks of flats was necessary, it was not to be
recommended that insurance on a block basis be made compulsory, and it was
further felt that it should still be left to the individual flat owner to
arrange his or her own insurance contract. However, it was noted that a communal policy should be
the recommended option for owners in blocks all the flats. Ideas and
recommendations that were produced in this document, went on to form clots off
the tenements Scotland (Act) 2004.
Section 18 off the tenements Scotland act 2004 placed an obligation on the owner
to be sure the property. It was to state as follows.
[1] it shall be the duty of each owner to effect and
keeping in force, a contract of insurance against the prescribed risks for the
reinstatement value of the owners flat in any part of the tenement building
attaching to that flat as a pertinent.
[2] The duty imposed by subsection [1] above may be
satisfied, in whole or in part by way of a common policy of insurance arranged
for the entire tenement building.
[3] The Scottish ministers may
order or prescribe risks
against which an owner shall require to insure.
[4] Where, whether because of the location of the
tenement or otherwise, an owner-
[a] having made
reasonable efforts to do so, is not able to obtain insurance against a
particular prescribed risk; or
[b] would only be
able to obtain insurance at a cost which is unreasonably high.
The duty imposed by subsection [1] above shall not
require an owner to insure against that particular risk.
[5] any owner may by notice in writing request, the owner
of any flat in the tenements produced evidence of-
(a] the policy in respect all of any contract of insurance which the owner of
that flat is required to have or to affect; and.
(b] payment of the premium for any such policy, and not later than 14 days after
that notice is given the recipient shall produce to the owner giving the
evidence as requested.
[6] the duty imposed by subsection [1] above on an owner
may be enforced by any other owner.
In May 2007, an order was attached to the tenements
Scotland act 2004 stating the prescribed risks that an owner of a flat in a
tenement block should seek insurance against. Article 2, of the order specifies
the following prescribed risks; fire, smoke, lightning, explosion, earthquake,
storm, and flood, theft or attempted theft, riot, civil commotion, labour or the
physical disturbance, malicious persons or vandals, subsidence, heave or
landslip, escape of water from water tanks, pipes, apparatus and domestic
appliances, condition with the building course to buy any moving object
originating outside the building, each each of oil from fixed heating
installations, accidental damage to underground services. An explanatory note was included, stating that the above
perils were presently the risks that any flat owner was required to insure
against. In practice, however, most modern UK blocks of flats
insurance wordings will in any case provide wider cover than that down by this
act. However, it is worth checking with an insurance company or insurance
broker, that any suggested policy wording does meet the requirements off the
above.
For the purposes of the act, the definition of a tenement
block, not only included the more traditional sandstone tenement building, but
also was extended to include converted houses, purpose built blocks, tower
blocks, etc.
The rights of tenement flat owners.
In 2004, the Tenements ( Scotland) Act
came into force in Scotland, in essence effecting everyone owing a flat in
Scotland. This change to Scotland's property law was designed to provide
benefits for in excess of 1.4 million homeowners living in tenements and
buildings such as blocks of flats.
The law applies to any building, converted into, two or more flats or
apartments and is based on a " common repair - common sense " approach. The
consultation for this act started in 2003 with the emphasis on obtaining a
better deal for homeowners based on the principal that in the event of certain
issues not being specified in the lease, then the majority decision was to
rule. The new legislation, was designed to close several gaps in the law,
which previously had allowed often essential repair work to property to be
delayed for many years. In some extreme cases, some works had failed to be
carried out , simply because one owner in a block had vetoed the plans. As
well as other changes, the act outlined the requirement for owners off
tenement blocks of flats to ensure that their property was insured to protect
not only themselves by their neighbours, property. The law imposed a
requirement on owners to disclose to other interested policies. [Such as a
neighbour in the same block] details off their insurance and the premiums paid
within 14 days of a written request, being received. Whilst it is allowed for
individuals to make their own arrangements, this disclosure requirement, seems
to point the way to block insurance being more convenient and manageable.
In many cases, the conditions of
management and maintenance of tenement blocks of flats are specified within
the title documents to the property. however, if details of management and
maintenance arrangements are not stated, then under the old system, having any
works carried out to the building, often proved problematic. a default
common-law developed by the courts, designed to fill the gap was fraught with
delays and difficulties, as mentioned, sometimes as little as a single
residence in a large block, has successfully managed to to delay essential
repairs and maintenance for a considerable amount of time.
The main purpose of the tenements Scotland act 2004 was to modernize the
common law arrangements and to help clarify who actually owns which part of
the building. It created a far more fair system of shared responsibility for
maintenance of tenement buildings and introduced a statutory system off
management processes but only where ,s no management, was outlined within the
title deeds. Each tenement building now had to have a " management
scheme", setting out a basic framework for maintenance and management off the
block. Individual owners are still subject to the legislation, even if they
have not " signed up" to the arrangements.
It's important to note that not all
buildings will have the same scheme. If not specified in the title then the
tenement management scheme will apply. The law endeavours to make default
decisions based on them being both workable and pragmatic and in the main they
are commonsense decisions. In essence, decisions need to be made by the
majority when no decision process is outlined in the deeds, this seems to make
perfect sense with the majority in a property deciding on when repairs or
maintenance be carried out, thus forcing, the minority owners who may be
opposed to spending money to fall into line and to contribute towards the
total costs. Also under the bill, the tenement management scheme would
include a list called scheme property, basically , this means that unless the
title deeds say otherwise, every owner will be obliged to contribute usually
on an equal basis to the cost of maintaining the most important parts off the
tenement building. This will include the roof and the external walls. Thus
somebody living on a ground floor apartment will be equally responsible for
the upkeep of the property roof, and will be unable to claim it does not form
part of their own building. The act was not designed to replace provisions
made under property title deeds and these will continue to take precedence
over this legislation , each block will therefore have the the most up to
date and appropriate system in force. Other " rules" listed in the scheme
include
-
A full description of what
constitutes " Scheme Property"
-
What the owners can and cannot decide
for themselves.
-
Procedures relating to voting
-
How costs are to be apportioned
amongst the individual owners.
-
What the term maintenance actually
means
-
How can a manager be appointed
-
Procedures for acting during an
emergency.
To help clarify matters, the act also
outlined a full description of a tenement building, the act not only
recognized traditional tenement buildings such as those all sand stone
construction, but also included converted houses, tower blocks, purpose built
blocks of flats, and commercial premises
