Compulsory owners’ associations in Scotland: what it could mean for tenement owners

Scotland’s tenement system has worked, just about, for a long time. In reality though, many shared buildings are held together by informal agreements, crossed fingers, and the hope that everyone pays their share on time. That fragility is exactly what the Scottish Government asked the Scottish Law Commission to look at.

The Commission has now published its final report, recommending the introduction of compulsory owners’ associations for tenement buildings, alongside wider reforms such as regular building inspections and sinking funds for maintenance. A draft Tenements (Amendment) (Scotland) Bill has also been produced. What happens next is up to Government, but the direction of travel is clear.

Why compulsory owners’ associations are being proposed

At present, many tenements struggle with decision-making. Repairs stall because one owner refuses to engage. Buildings deteriorate because no one feels properly responsible. Disputes drag on, often at significant cost.

The Commission’s proposal aims to create structure where there is currently uncertainty. Owners’ associations would be created automatically by law at set points in time, rather than relying on goodwill or ad hoc arrangements. In simple terms, every tenement would have a recognised body responsible for managing shared matters.

The four core duties every association would have

Under the recommendations, each owners’ association would be subject to four key duties:

  • Appointing a manager to act on behalf of the association

  • Holding an annual general meeting, creating a formal forum for decisions

  • Approving an annual budget for shared costs

  • Registering key information about the tenement on the property registers

From a Factors Direct perspective, this is a meaningful shift. These duties formalise what good factoring already does, but crucially, they remove the ambiguity that often causes problems in unmanaged or poorly managed buildings.

Enforcement and dispute resolution

One of the most significant changes is how enforcement would work. If an association fails to meet its duties, there would be a remedial management process overseen by the First-tier Tribunal for Scotland, rather than disputes defaulting to the sheriff court.

This matters. Tribunal-led processes tend to be more accessible, more proportionate, and less intimidating for owners. It also encourages earlier resolution, before issues escalate into entrenched disputes.

Standard rules, with room for flexibility

The report also recommends a default set of association rules, giving every tenement a clear starting point. Owners could still adapt these rules through title conditions, but the emphasis is on consistency and clarity.

For many buildings, particularly older tenements with outdated or unclear titles, this could remove long-standing confusion about who is responsible for what.

What this could mean in practice

If adopted, these reforms would raise expectations across the board. Owners would have clearer obligations. Managers would operate within a more structured legal framework. Most importantly, buildings would be better protected from neglect caused by inaction or disagreement.

At Factors Direct, we see daily how clarity around authority, budgeting, inspections, and communication directly impacts the condition of a building. These proposals reflect that reality and, if implemented well, could significantly improve standards across Scotland’s tenement stock.

Industry perspective

“These proposals mirror a lot of what we already encourage owners to do as good practice. We welcome any move that helps lock a clear, consistent framework in place for all factors to follow.

Without bold steps like this, tenements in particular simply won’t be here in 20 years’ time, and that would be a real loss.”

Rob Armstrong, Managing Director, Factors Direct

FAQs

Are compulsory owners’ associations in force yet?
No. These are recommendations only. The Scottish Government now needs to review the report and decide how, and when, to legislate.

Would every tenement be affected?
The proposals apply to tenement properties, including many traditional flatted buildings, though the exact scope would be defined in legislation.

Does this mean all tenements must have a factor?
Not necessarily, but each association would need to appoint a manager. In practice, many associations may choose a professional factor to meet their legal duties properly.

What about sinking funds and inspections?
These are part of the wider reform programme running alongside owners’ associations, aimed at improving long-term maintenance planning and building safety.

How would disputes be handled under the new system?
Most maintenance and management disputes would be handled by the First-tier Tribunal, rather than the sheriff court.

If you’d like to understand what these proposed changes could mean for your building, the Factors Direct team are happy to talk it through. No pressure, just clear advice based on how your tenement is actually managed today. Talk to Factors Direct and get practical guidance from a team that deals with shared buildings every day.