By David Gibbon, RICS Conservation Accredited Building Surveyor
The repair of common property in Edinburgh
In Scotland it has always been possible to own a flat or a part of a building outright. In England multi-owned buildings generally have a head leaseholder and it is only possible to own a lease. It means that there is always an entity that owns the overall building and has responsibility for its maintenance and repair. This can result in far from perfect situations but in Scotland, far from perfect situations are almost routine. The ownership of common property in Scotland is governed by a mixture of archaic law, unhelpful statutory provision like the Tenement Act and often contradictory title property-specific deeds. More modern properties usually have relatively coherent and well written title deeds that make provision for a Factor to be appointed to look after the building as a whole but in older properties this provision is patchy and in Edinburgh, largely non-existent.
The amazing powers of Edinburgh City Council
The City of Edinburgh Council has powers in respect of the repair and maintenance of privately owned property that are unique in Scotland, unheard of in the rest of the UK and possibly in the rest of the free world. Through the Edinburgh District Council Order Confirmation Act 1991 the Council has the power to step in and do repair and maintenance work to private property without the owners’ consent and to recover the cost from them. This is a power that goes far beyond the standard power that all local authorities have to take action in the case of structures that are dangerous to the public. CEC have interpreted the Act as permitting them to issue Statutory Notices in relation to a missing slate or two or a patch of missing render. In go the contractors, up goes the scaffolding and before you know it hundreds of thousands of pounds worth of work may have been carried out. As an owner you have no say, no right of appeal, nothing. You simply have to await the bill and pay it. Some have waited for years but now they are arriving thick and fast on doormats.
How they used them
In the heyday of this tenemental property repair boom Edinburgh Council created a large department and put through it millions of pounds worth of work at the expense of private owners. They were issuing hundreds of Statutory Notices. One of their main inspectors issuing these notices had come straight from a job as a slab layer. To be fair, the EU Procurement Regulations pushed them into adopting quite a clever system for appointing contractors. They selected a number of local contractors and invited them to sumit rates for a huge list of work items covering just about every possible item of work that a statutory notice might cover, from pointing, to replacing slatework, to replacing stonework, to renewing gutting and to replacing leadwork. This enabled them to rank the “framework” contractors for any particular project in order of total cost. When a contractor was considered to be overloaded with work, the council officials could select the next lowest tender.
How it all went wrong
Then there came a point when council officials decided to start appointing contractors who were not on the framework and had not gone through any sort of tendering process. The favoured contractors responded with hospitality largesse and other benefits to the council officials giving out the work.
The scope of work that council officials instructed routinely exceeded their statutory remit. In the prevailing hubristic atmosphere individual officials were making up their own rules as they went along and triggering vast amounts of work that could not possibly be described as essential and sometimes were not even desirable. Contractors were getting away with murder by way of grossly exaggerated accounts for the works.
The balloon goes up, rather slowly
The Council suspected that something was going amiss and conducted a secret inquiry but the results were suppressed and the abuse continued for another couple of years. Then the whole rotten system blew up. Framework contractors were peeved about all the work that was going to the non-framework pet contractors of the council officials. Deloittes were appointed to undertake two investigations and reports but were kept away from some of the most sensitive information. Deloittes’ job had already been done for them but they still managed to charge the best part of £2m for their services. A police investigation was also undertaken. The Deloittes and Police reports make astonishing reading but the Council somehow managed to avoid prosecutions (on the Conservation side anyway) and have kept Deloittes on side by smothering them with further eye-watering fees.
The “resolution process”
Deloittes were appointed to compile reports on each outstanding case of which there were a great many. It was their task to sift through the documentation and say what they thought was a fair amount for the owners to pay. There were, however, some flaws in this arrangement. Firstly someone had destroyed most of the council’s paper files and computer records at the start of the investigation into corruption and wrongdoing so the process of compiling accounts consisted of a lot of scratching around for sketchy information. Secondly Deloittes remit did not include any site checks on quantities. Thirdly, despite vigorous attempts to conceal the extent of information or lack of it from the owners, some emerged as a result of Freedom of Information Requests from which it was possible to discover gaping irregularities in the accounts approved by Deloittes. Fourthly the owners were not permitted to have any dialogue with Deloittes and Council officials simply deflected (and continue to deflect) any representations by referring to the Delloittes process.
Business as usual
Despite the abject failure of the Stat Notice system CEC have decided to reinstate it although, for the time being, they have not been able to recruit suitably qualified staff. This surprised us. Why would Chartered Building Surveyors not be queuing up to join this reputable organisation? However no-one should underestimate the council’s determination and the need. A dependency culture having been created among the owners of tenemental property in Edinburgh, there is now very little in place to facilitate the repair and maintenance of common property.
Council officials continue to be obstructive. They have access to the database of owner’s names and contact details and not only won’t they share this information among the owners because of “data protection”, they won’t even ask the owners for permission to do so. Finding out how to get in touch with the other owners in a tenement can be a major stumbling block at the very outset. In addition the Council have the extraordinary ability not to charge VAT on the building work they carry out or on their management charge. If we set aside their incompetence, to the uninitiated this looked and may still look like a useful benefit. Another driver is the council’s policy of dividing all repair bills into equal shares and ignoring the title deed shares. This can prove highly beneficial for, say, a shop whose share may be high but for whom a roof leak is of little concern. They are highly likely to hold out if there is any prospect of a council run common repair scheme.
What are the lessons to learn from this?
Just as in the case of a tenant signing a Full Repairing and Insuring Lease, it makes sense for the prospective owner of a property within a tenement to know what they are getting themselves into. Unfortunately most pre-acquisition surveys barely touch on the condition of roofs and other common parts and Home Reports, although they give the impression that roofs come within their remit, invariably say nothing useful at all. The obligations of flat ownership (or retail units on the ground floor of a tenement) in Edinburgh should be carefully assessed. A building survey that extends to the roof and common parts should not be regarded as an optional extra.
Existing owners should make sure they know and understand the state of their building and are in a position to take the lead ahead of any reinstatement of the Council’s nightmare regime. GLM Shared Repairs provides a very simple low cost way of getting to grips with common repairing liabilities.
Or alternatively buy a detached house or an out of town retail unit.