Kieran Findlay

Hello and welcome to the Scottish Housing News podcast with me, Kieran Findlay and Jimmy Black. Following the recent episode with Audrey Murphy and Professor Douglas Robertson, we’re returning to the issue of tenement repairs due to the launch of two big reports, one of which was described as the most significant document to be published in 2025.

Jimmy Black

So to shed light on those reports and discuss compulsory owners associations, practical implementation and the financial realities of tenement maintenance are Mike Heffron, the Chief Executive of Under One Roof and Gillian Campbell from Gillian Campbell Consulting.

Kieran Findlay

Thanks both for joining the podcast. As I mentioned in the introduction there, Audrey Murphy on the previous episode highlighted the realities faced by Abronhill Housing Association and possibly many other landlords where fragmented ownership is undermining efforts to maintain safe and secure tenemented properties. In their particular situation, of their 257 units, they have 105 tenants living across 70 mixed tenure blocks. Yet the association holds the majority ownership in just two of these. Described by Audrey on the episode as a logistical nightmare.

Jimmy Black

And you could tell her frustration with the situation, you? She quite clearly found it really difficult because she wants to repair her houses, she wants them to be good, but it’s huge logistical problems making that happen.

Kieran Findlay

Since then, the Scottish Law Commission has published their long-awaited report in which they make recommendations that an owners association and a building reserve fund should be established for every tenement building and the building should be subject to a condition inspection every five years. So that’s what brings us to today and to Mike, what is your initial reaction to the Scottish Law Commission’s recommendations?

Mike Heffron

So the report that was put out and draft legislation that was put out in late December by the Law Commission is essentially sort of did what they said that they basically what they were had originally suggested they were going to do, which was there were basically three or four main sort of key elements to it. One was that there would be a owner’s associations would essentially be created once the legislation, a certain date was set in the legislation. Those would be basically everybody in a tenement would essentially have an owners association in their building.

And there were three or four main requirements, depending on the counting, but basically the requirements were that they appoint a manager, that they hold an annual meeting, at least one,  and that they approve an annual budget. They would also have to have that information noted on the land register. So we essentially be creating a registry of owners associations.

There’s a lot of stuff in there that we can drill down into. But this was, from our perspective, and we act as co-secretariat along with BEFS of the Tenement Maintenance Working Group, we consider this a, I think, positive movement is the best way to describe this, is moving forward on this issue. We seem to have been stuck in moving forward on the issue of generally around trying to help owners organise repairs.

Jimmy Black

Let’s bring Gillian in now. What would a well-functioning owner association look like in practice? And how does that all tie in with the existing Tenements Scotland Act framework?

Gillian Campbell

Well, I think, first of all, I’d agree with the person who said that it’s one of the most significant publications of 2025. It’s immensely important in pushing things forward. But I think what is critical is that it is part of a bigger solution. As Mike alluded to there, there were three recommendations came out of the Tenement Maintenance Working Group and the Owners Association, but it’s critical.

But one of the biggest barriers to action is actually the ability of owners to not just make decisions and work together, but to actually pay for the work. So that’s where  this piece of work that I’ve been working on over the last few weeks came from, this feeling that yes, we need to address the decision making side of things, but also how do we pay, how do we make sure that flat owners are able to pay for works as well as decide what needs to be done.

Kieran Findlay

As well as the financial side of it, Gillian, what are the biggest risks to implementation of these compulsory owners associations?

Gillian Campbell

One of the big challenges we’ve got just now is that we’ve got a property ownership culture in this country that just doesn’t recognise the complexities of flat ownership. It doesn’t recognise that actually you do need to talk to your neighbours, that you are liable for shared costs, that you should actually, all homeowners should be considering long term maintenance costs as well as just the cost of purchase.

So I think one of the biggest challenges and risks is that we have to make sure that it’s a sort of real awareness raising and culture change programme goes alongside any sort of legislative changes. And I think the recommendations from the Law Commission do reflect that and that they talk about a very long sort of lead in time and similarly with the Building Reserve Funds recommendations it talks about a long lead in time to make sure that we’re making progress on changing our attitude to home ownership and flat ownership in advance of obligations being introduced.

Mike Heffron

I think Gillian, I think just is absolutely right there. And I think one of the things that was really interesting in the documents that were coming back from the Law Commission is they recognised that the minister had specifically tasked them on the issue of owners’ associations. But they also made it pretty clear that owners’ associations is only part of it.

You need to be able to have the the element of Building Reserve Funds that Gillian did her report on about being able to raise those funds and for future repairs, but also dealing with the issue of what, you know, the backlog repairs, the repair debt as you were, of what is actually happening now, but also the issue of five-year inspections. And we have to be able to know what the condition of those buildings are.

So one of the things that we want to see with this legislation is, okay, you’ve taken on the owners association, the law commission have responded to that, and you’ve asked them specifically on that issue. It’s time to bring the other two elements in and create a bill that incorporates all three of those elements into the final legislation.

Kieran Findlay

Do you think there’s a danger that won’t happen that they’ll go ahead with the law commission’s main recommendation and the other two will slip by the wayside slightly?

Gillian Campbell

If I could just jump in on that, I think this is quite an interesting subject matter because there has been a high degree of cross party consensus on this over the last few years that the Tenement Maintenance Working Group obviously is a cross party group. So there is consensus across the parliament that all three of these recommendations need to be taken forward. The risk is that taking forward any one of them, let alone all three, is a big ask.

It’s a very complex area of law and it’s placing burdens on homeowners, which isn’t always the most popular thing from a politician’s perspective. But I’m particularly hopeful that the fact that there has been this long standing cross party support means that I’m feeling optimistic about progress in the next parliament.

Jimmy Black

You know, we’ve done this before. We had housing action areas way back. Large areas of tenements were wonderfully restored. Where are the local authorities in all of this? They have the ability to impose repairs orders, works orders, you can even close buildings. Why is the role of local authorities, why has that become less significant in tenement to prepare than it was, say, at the time of the housing action areas?

Mike Heffron

From my perspective, and we work closely with all the local authorities, on this particular issue and get in fact get funding from almost every local authority to support the work that we do. But our interactions with them have told me that it’s essentially it’s a resource issue, is that there is a wide variety of private housing, people working in private housing. And obviously, in the bigger cities, yes, you have people that are dedicated to that. Edinburgh and Glasgow in particular have part of the housing team is working on private housing.

You get down to some of the other councils that we’re talking about, you’ve got somebody that’s in charge of landlord registration, but they’ve also got homelessness and they might have some other element of it as well. It is very much largely a resource issue for them and it’s one of the reasons why we get funding for them because they don’t have the resources to handle the kind of questions that they get so they will pass them on to us and say go to this independent charity and they’ll give you advice and information on those particular topics but it’s very much a resource issue.

Jimmy Black

I noticed I was looking at some figures this morning and Glasgow does spend a significant amount of money on tenement repair or certainly repairs to private sector housing. Some other councils spend nothing at all and it basically just confirms what you’ve said Mike that the money isn’t there and I don’t think there was a lot of money announced in the recent budget for this kind of thing either. So yeah, the reveal of the source issue absolutely.

Kieran Findlay

Gillian, in your research for Under One Roof, you propose a workable model for Building Reserve Funds, but did you come across any surprising attitudes from owners about long-term maintenance savings?

Gillian Campbell

The research didn’t engage directly with owners, it engaged with a wide range of stakeholders, local authorities, finance institutes and so on. As part of the research, I looked at examples of what was going on in some other parts of Europe. One of the interesting things about that was that over the last few years, number of countries have actually changed the way they approach Building Reserve Funds because they’ve learned from experience they’ve had. They’ve realised that by having, by allowing owners to choose and set their own levels of contributions, there’s a natural tendency for owners to under contribute to their Building Reserve Funds. So a number of countries have actually changed their regulations in recent years to introduce minimum contribution requirements.

And so I think one of the really interesting things is there’s a lot of lessons that Scotland could learn from what’s been going on in Europe that could help to sort of skip a few steps, I suppose, and get us to a position where we’ve got a system that’s more workable early on.

One thing that did surprise me from the stakeholder engagement I did was there was universal support for mandatory Building Reserve Funds. Everyone I spoke to, no matter what sector they were representing, recognised that where we are just now is not sustainable and unless we take some fairly decisive action, we’re all as individuals but also collectively going to be in a really difficult financial position and a difficult housing position, more difficult than we’re already in. So the unanimity around support for Building Reserve Funds was really interesting.

Jimmy Black

Let’s say you were to set up a reserve fund tomorrow, there wouldn’t be anything in it. So it’s going to be a long time before you’ve saved up enough for all your owners to actually do anything useful. But who’s going to lend you money? I mean, why would you lend an organisation like that money?

Gillian Campbell

That’s one of the big problems setting up a building reserve fund tomorrow would be incredibly difficult. There aren’t the products out there and we also have the problem where we don’t have owners’ associations as legal entities. So that needs to change first of all to make sure that owners’ associations can establish these accounts.

In terms of starting from square one and yes it will take a significant amount of time to build up a reserve and you asked the question about who would lend to such an organisation. There’s interesting as I said I looked at some European examples and there are examples both in Germany and Spain and I think the Netherlands as well where there are banks that lend to owners associations to carry out repair and improvement work and a lot of this has been focused on helping to finance energy efficiency and clean heat works going forward.

So in Germany, for example, there is a particular bank that was established back in 2015 that was actually born out of a property management company that has developed specific dedicated products and services for owners associations to help them to manage their reserves, but also to access financing to fund works in the future.

So I think there’s two sides to this. One is we need the infrastructure in place so that owners’ association can actually set up the funds and save over time. But secondly, we need a way of making sure that these owners’ associations can access credit so that they can borrow to try and catch up on some of the backlog.

Mike Heffron

And some of the things about the Building Reserve Funds as well is that it will take some time to build up those funds. It will probably take some time for even them to be implemented. I we talked, it was mentioned risk earlier. Owners associations, that part of the legislation, there isn’t much risk there in the sense it’s not actually asking for anyone to do anything  that will cost money in particular.

There might be some small fees around sort of registering on the register or something like that. That’s not actually something though, for the most part, that’s gonna cost owners. Where you get into  the stuff that might have some risk  is around asking people to contribute money and to pay money into it.

Now the idea of the Building Reserve Fund, of course, is  you’re not going to save up the money to the point where you’ve got probably all the money you need to pay for the repair. I think the way I look at it is it’s going to take a sting out of it, because right now the situation is if the roof caves in, everybody’s got to put forward a huge amount of money. If you have a building reserve fund that’s been building up for a number of years, you can draw down on that.

So the individual cost to all the owners is going to, they’ll still have one, but it’s going to be significantly less than it would be if it all came at once. And I think that’s one of the elements of the building reserve fund that is positive as well, is that it will it will take some of the financial sting out of actually having to do particularly major repair projects.

Gillian Campbell

I just going say if I could just add to that one other way of sort of accelerating the build up in funds in the earlier years is potentially looking at sort of transactional contributions and this happens already in some circumstances where the buyer or seller of a property is required to contribute a proportion of the price into a building reserve fund and that’s a way of potentially quickly building up a fund.

Another way of sort of accelerating the fund could be that you would require contributions from a period in time, but these would be ring-fenced for say the first 10 years and to build up a fund and in the interim, you would be required to meet the cost of any repairs in the way that you would just now.

It’s going to be really difficult and there’s no getting away from that and a lot of people will be unhappy and feel hard done by but we need to go back to the point at the start which is we’ve got something like 900,000 flats in Scotland and about 45% of these are in serious critical disrepair. If we don’t do anything about it we’re going to end up losing a huge amount of our housing stock which is not palatable to anybody.

Kieran Findlay

I can see a situation where you have a row of tenements each with their own owners association and a manager and a building reserve fund in place but some are better run than others, know, the managers may be a bit more proactive than the others. The tenants and residents in that building are more forthcoming and they get their building repairs done before their next door neighbour, so to speak. Then they’re also then missing out on economies of scale, getting the same jobs done at the same time. Anything to address this that you’ve come across either in your research for Scotland or further afield, Gillian?

Gillian Campbell

Interestingly, Spain, again, the way owners associations are structured in Spain, they can actually group together and build up together and actually access funding as clusters of housing associations. it’s really all of this. This discussion is all very time critical. And we’ve got this draft bill from the Law Commission.

And if we get this right, we can add in things like the Building Reserve Funds and the five-year maintenance plans, ensure that they’re correctly structured so that they can work collectively and deliver these economies of scale because we know in addition to the building and maintenance side of things, flat owners are going to have significant challenges over the next 20 years in terms of decarbonising their homes. So we need to be thinking to the future and how we can  do this as efficiently and effectively as possible.

Jimmy Black

We’ve been looking at this for years, tenements have been falling down for years. Douglas Robertson, who we’ve had on the podcast, has given catastrophic predictions of what might happen if we don’t take action to sort the tenement problem in Scotland. But nonetheless, the Scottish Law Commission gets sent off to produce a report, takes years, comes back and gets sent off to produce another report, takes years.

Do you think the Scottish Government is actually in any way enthusiastic about interfering with individual property owners’ property rights? Do you think this is going to happen in other words?

Mike Heffron

I’m confident of it and the reason I’m confident of it is I take a look at the membership of the group that is meeting, the Tenement Maintenance Working Group, and that is made up of the Scottish Association of Landlords. It’s made up of TPI Scotland, which is the old Property Managers Association Scotland, the umbrella organisation for factors. It’s made up of local authorities. It’s made up of individual factors. We’ve got as surveyors, we’ve got a wide variety of architects. We’ve got a wide variety of the housing sector. If you want to meet somebody in the housing sector, you can come along to one of those meetings.

And I think because of that cross sector support along with the cross party support, my feeling is that yes, it is absolutely taking a long time. Certainly, Douglas Robertson would know given his long sort of effort to address these issues. And to be fair, this should have probably, I’m not sure probably, it should have been addressed in the 2004 Act. Like we should have dealt with it. We dealt with this 20 years ago and we knew the issues then should have been dealt with then, but it wasn’t.

I feel that no matter who actually comes in with government, I think there’s a strong case and a strongly likelihood that we can see these issues passed. I think once we get to the issues around providing evidence of this, and there’s plenty of it,  and this is an opportunity for the Scottish Government to get ahead of a crisis. I mean, in a way, it’s a crisis right now, but we’re not talking about buildings collapsing and injuring or killing people.

Buildings certainly are coming down and there’s certainly, you we hear these stories from time to time. My fear is we get to the point where it’s tragedy that makes us act.

And this is an opportunity for the government to act before we get to the point of tragedy, to get ahead of this issue, to get ahead of the issue of the potential shortage of housing that you would have should these buildings start getting taken down because they are just in such poor condition.

So I’ve got, I’m remaining hopeful on that. I’ve only been in the housing sector, of course, for six or seven years or so. I don’t have the experience that some of the old timers do, but they still stick with it in the same way that I do. And I really feel that we can actually get some action on this. Particularly, we expect it in the next parliament with the elections coming up, but I think we really can early in the next parliament make a real push to see some action done on this.

Kieran Findlay

I can certainly vouch for some buildings falling down. We’ve got an example of that very thing in Dundee at the minute.

Mike, we get our new government, we get our mandatory ownership associations. What are the next steps after this?

Mike Heffron

Well, the next steps of this is, if we get mandatory owners associations, and I guess if we’re under the assumption that we’ve also gotten the other things, then if we’ve gotten the five-year time inspections, we’ve gotten mandatory Building Reserve Funds, then we’ve got  to really amp up the amount of support that those owner associations have. I mean, we’ve got a situation where people are going to have to start talking to their neighbours.

It’s one thing when, I’m obviously not originally from Scotland, but I hear stories like, back in the day, everybody knew what everybody’s, know, everybody else in the close and the stair, and we all looked after each other. Well, you’re going to have to start to get to know your neighbours when there’s mandatory owners associations for better or for worse.

I think there’s a lot of education that’s going to be around that. People are going to be put into situations where they’re going to have to do a lot of the work themselves. These are private owners, and they’re going to have to do a lot of this work themselves.

For example, there’s opportunities for other organisations to be supporting in that. In the West of Scotland, most of the buildings are factored, right? So factors can be the manager of the owners association. They’re already in a position where they have bank accounts. They’re already in a position where they can organise repairs or help organise repairs. So I think a factor is particularly in the West coast can play a huge role in making this successful

But then the rest of the country where buildings are not almost universally factored,  that is going to be something where people are to have to do it on their own. And they’re going to need support to get through even the basic sort of elements of running a meeting and how to do the processes that you need to do, the democratic processes that you need to do to get this moving forward.

And the other element of it and the thing that if we’re looking at what do we actually need to get it done is we need to figure out a way to help people fund these repairs. It’s probably not going to be grants. I think those days are behind us.

We’ve got social housing that actually is in a crisis and underfunded. It’s going to be hard to make the case for private owners to be getting money that otherwise would be going to social housing or for homelessness. But there’s no reason why you can’t be doing low interest loans and there are many examples of opportunities to do that. And Gillian’s working on a second paper for us right now to look into what exists now.

But there’ll also be some things in there about what actually could be possible as far as providing low interest loans to help people fix the buildings that need fixing now.

Jimmy Black

We might want Gillian to come back and tell us about that when it’s all done, when the work is done. We’ve only got a couple of minutes left, really not as long, but we’ve been talking about stopping tenements falling down. What we haven’t talked about is meeting net zero heating standards and insulation and all of the rest of it. Is there any possibility that tenement owners in Scotland will meet the standards that the government want them to meet within the targets that the governments have set?

Gillian Campbell

Absolutely, if we’ve got the right legislative framework and support framework in place, but it’s all dependent on having the right building blocks in place. If we have the tenement law reform so that flat owners are enabled to make decisions, to pay for the works and access the credit and so on, and access products like property linked finance, which I’ll maybe talk about sometime in the future.

If that sort of infrastructure is in place, if the right kind of support is in place, because a lot of flat owners don’t know what the most appropriate technical solutions for the property. If that is in place, there’s no reason why flat owners shouldn’t be able to meet the standard.

Another big hurdle here is, of course, most people who are living in the more densely populated areas with flats are going to be looking towards heat networks rather than individual solutions. So we need to progress over the next few years, rapid progress on the rolling out of heat networks. But indications are that’s a priority for certainly the current Scottish Government and depending on what happens with the election there may be legislation introduced early in the next parliament that would certainly aim to try and speed things up in terms of heat networks. So yes, I think it is perfectly achievable.

Kieran Findlay

If they don’t, and I’m sensing a lot of positivity and I don’t want to put that down at all, but if the Scottish Government don’t follow through on what we hope that they do, for me it’s a no-brainer because I don’t see how they get the energy efficiency upgrades in these buildings without the ownership, the formal associations. But are there any alternatives out there, Gillian?

Gillian Campbell

Mike mentioned earlier that in the west of Scotland we’ve got property management services in place and most properties are factored. That’s lacking in other parts of Scotland. 

That growth, significant growth in the property management industry, a professional property management industry would go a long way in helping to address this situation, along with the support and encouragement of the finance industry to start to develop products that meet this demand. But again, industry, this applies to the green finance stuff as well as this area of work. The finance industry is only going to develop products if they’re confident that there’s a market.

And that’s where you need the sort of legislation and the regulatory  drivers to create the market that then leads to the services and products being developed. Industry, the private sector, isn’t going to preempt these markets. So  I really think it would be very difficult to achieve without some sort of legislative driver to kickstart things.

There’s a couple of areas that think are really important. One is the role of the house buying and selling industry in trying to change the culture we’ve got around property ownership and property maintenance. People like solicitors, estate agents, surveyors and mortgage lenders are all guiding people through property transactions and have got a real opportunity to influence buyer and seller expectations. So there’s a lot we could be doing right now to start to talk about and normalise the idea of saving for future repairs and maintenance work. So I think that’s something we could start now in advance of legislation. We could start to make changes to the home report and to just to normalise the language.

And the other thing I think that we need to think about is technology and the development of technology. We’re talking about a long term programme here that’s potentially 10, 20 years before we saw  changes to titles and things.  We’ve already got apps like Novoville Shared Repairs service where neighbours are encouraged or enabled to engage with each other. You know, technology evolves at an incredible rate. You know, what sort of technology is going to be around in five, ten years time that’s going to facilitate this engagement and enable us to be organising ourselves more effectively than we’re doing at the moment.

Kieran Findlay

If compulsory owners associations are introduced, what does success look like in five years time?

Mike Heffron

Success in five years time would be a building industry that is complaining that they are overwhelmed with the amount of requests to do work on tenement buildings. That is probably not something that is currently happening with them right now.

I mean, because we don’t have any measurement right now. I don’t have the figures to say, how many, because you can have an owner’s association now, but we don’t have any figures to show what that actually is. So we wouldn’t be able to say, okay, because we’re going, we literally be going from a number of zero because we don’t know what it is to a hundred percent because everybody has to have an owner’s association. I think that’s what you will actually see is building works on tenement buildings. You will see a significant amount of scaffolding up around tenement buildings throughout Scotland.  That would be the most visual element of success.

The audio element of success would be moaning  from contractors that they can’t keep up with the amount of requests and owners themselves that they can’t find anyone to do the works because there’s too much going on. And there’ll be a call for Scottish Government to pour money, more money into training people in the building industry to be working on issues of tenements, particularly on older tenements. You know, there’s probably, I would say right now, and there’s a conference actually addressing it right now in the West of Scotland Housing Association today on stoneworks. And there’s a real massive push to get more people doing, trained up to be working on stone repairs. And that would be another sign that things are going well, that people are actually getting their buildings fixed.

Kieran Findlay

Now on that positive note, we’ll end it there, a full pipeline of works and plenty of jobs available. What can go wrong?

Jimmy Black

Kieran, could we just give a credit to the Dundee Chamber of Commerce? We’ll see that they have supplied mugs full of coffee for us here and we’re in their podcast studio and we’re very grateful to have the use of it. So thank you Dundee Chamber of Commerce.

Kieran Findlay

Thanks for the coffee.

So that brings us to the end of this episode. Thanks again to Mike Heffron and Gillian Campbell. Keep up the good work guys. I’ve been Kieran Findlay and Jimmy’s been Jimmy Black. We’ll be back with another episode down the line.