Under One Roof, in partnership with Gillian Campbell Consulting and The MCS Foundation, has published a new report exploring how Scotland could implement Building Reserve Funds, to help owners fund tenement maintenance and repair projects.
There are over 900,000 tenement flats in Scotland, and around 45% of them suffer from some form of disrepair to critical elements. This means that our country is facing a crisis in tenement maintenance, and tenement owners face significant financial barriers to getting the necessary work done.
To help explore solutions to this problem, Under One Roof has published a new report on Building Reserve Funds. Written in partnership with Gillian Campbell Consulting and The MCS Foundation, this report examines how Building Reserve Funds could help tenement owners to prepare and plan for maintenance work in their buildings, and how making these Funds mandatory could help tackle the tenement maintenance crisis.
Building Reserve Funds are a type of fund set up to pay for repairs to a building. All the owners pay in on a regular basis, and money is taken out of the Fund as needed to pay for major repairs. Click here to find out more about Building Repair Funds.
The report examines the use of mandatory Building Reserve Funds in Germany, the Netherlands, Ireland, Spain and France to explore how they might work in Scotland. It finds that the Funds work well as part of an integrated system of regular building inspections, accessible banking options, and compulsory owners’ associations which ensure that all the owners in a building are involved in deciding how to spend the funds.
Introducing all of these in a country where there is limited professional property management, poor awareness of building maintenance among tenement owners, and few suitable banking solutions for owners to put their Building Reserve Fund accounts will require a gradual, phased approach.
To tackle this, the report recommends that:
- The Scottish Government should introduce mandatory Building Reserve Funds, alongside compulsory owners’ associations, mandatory five year building inspections, and block buildings insurance.
- The Scottish Government should support banks to create new products which will give owners an appropriate type of account for their Building Reserve Fund, and should establish a Tenement Maintenance Finance Short Life Working Group to work alongside the banking sector.
- The Scottish Government should enable owners’ associations to access credit, to address the huge backlog of maintenance work which cannot currently be completed due to lack of funds.
The report, which contains 19 detailed recommendations, concludes that the Scottish Government should introduce mandatory Building Reserve Funds in 2026, but leave lots of time in between the legislation’s introduction and its enforcement, to allow for awareness-raising and capacity building among Scotland’s tenement communities.
