Repairs are inevitable and need to be tackled quickly before more damage is caused leading to bigger bills, possibly affecting the value of your property. Grants for repairs are seldom available.
Savings
Ideally, you and your co-owners should all save together. You could consider a joint Building Reserve Fund or Sinking Fund where you can save for major repairs. If it’s not possible to get one of these set up, you could try setting up a Joint Maintenance Account.
If individual saving is all that is possible, consider setting up a Cash ISA with your bank where you will at least get some tax relief.
If you can only save a small amount on a weekly or monthly basis, consider saving with a credit union. Then, if you haven’t managed to save enough before a repair comes up, you can ask them for a loan.
Borrowing
If the need for repair is causing damage to your building and will lead to even further and more expensive work in the future if the work is not done now, it is worth considering getting a loan. While you pay interest on a loan, building costs are increasing at a similar kind of rate each year, so one cost tends to set off another. Additionally, getting a repair done may lead to fewer repairs in the future. An investment into your property is hardly ever a waste of money.
If you are in the position of being a minority owner, where all other owners have agreed to a repair and you have no other funds, you may have little choice but to get a loan.
There are a number of different types of loans that you may wish to consider.
You should take advice before taking out any loan and compare rates and conditions before signing up.
Types of loan
Loans secured against your flat are generally cheaper than personal loans, and extending your mortgage, if you have one, may be relatively easy. This is because the lender will have some level of ‘security’ in the event of non-payment. However, you must consider the risks involved in taking out a secured loan. You may also need to get permission from your current mortgage provider.
Unsecured personal loans are widely advertised, but you should check these out carefully using independent comparison sites which take no commission from the sale or recommendation of loans. Two are listed below. Unsecured loans may be easier to obtain if you have a good credit rating.
For older owners
If you are older and on a limited income, you may be able to get an equity release loan (lifetime mortgage or home reversion loan). Neither of these loans require you to make repayments but they are complicated and expensive, and you really must take (and probably pay for) specialist independent financial advice before taking out these types of loan. You may also need legal advice. You should be aware that not all equity release loans are legitimate.
AgeUKÂ may be able to help you with these types of loan.
Credit Unions
Credit unions are community co-operatives and offer loans at competitive rates to their members. There may be a local credit union near you or you may be able to join one through your church, your trade union, or your employer. You must normally be a saver with a credit union to get a loan. If you think you may need a loan in the future and want to consider using a Credit Union, it is recommended to become a member as soon as possible.
Before taking out any loan, get financial advice. See below for sites which can offer financial advice.
Grants
Your council may still be able to offer repair grants, but this is becoming rarer due to the current state of public finances. Missing Shares financial assistance is available from some councils. No grants can be paid if work has already started.
Welfare benefits
If you are on benefits, you may be able to get a Crisis Grant from the Scottish Welfare Fund. A Crisis Grant helps people meet expenses that have arisen as a result of an emergency or disaster, to avoid serious damage or serious risk to health or safety. You can apply for a Crisis Grant through your local council.
Can’t pay?
If you simply cannot pay for a repair, it is best to be upfront with your co-owners to try and find a solution that will work for everyone (whilst maintaining the tenement). Tell your co-owners so they can ask the council if they are able to pay Missing Shares. You will still have to repay the council, who may impose a Repayment Order. If the council cannot help, then other owners will have to divide your share of the costs between them. They may serve a charging order on you to enable them to recover their costs when you sell your flat.
