Building standards enforcement handbook: first edition

13  Recovery of expenses

13.1 When local authorities may recover expenses

When LAs undertake work in relation to compliance or enforcement, or in relation to a defective or dangerous building, they may recover any expenses reasonably incurred and normal methods of debt recovery apply.

Section 44 – Expenses

Where LAs serve on a person a demand for payment for expense incurred by them in carrying out the work in relation to a building under sections 25(7)(b), 26(3)(b), 27(7)(b), 28(10)(b), 29(2) or (3) or 30(4)(b), sections (2) to (4) make provision for liability for expenses to be restricted or transferred.

Section 45 - Compulsory purchase where owner cannot be found

When LAs have carried out work under sections 29(2) or (3) or 30(4)(b), and the expenses incurred cannot be recovered from the building owner, Scottish Ministers may authorise LAs to purchase the building and its site compulsorily.

Section 46 – Sale of materials from demolished buildings

If a building is demolished by LAs under sections 27(7)(b), 29(2) or (3) or 30 (4)b, LAs may sell any building materials arising from the demolition. LAs may offset the proceeds of any such sale against any sum recovered by them from the building owner under sections 25-30.

13.2 Charging Orders

The Act was amended on 24 January 2015 by the Buildng (Recovery of Expenses)(Scotland) Act 2014 to improve cost recovery powers and help LAs cover their expenses. It introduced charging order provisions in sections 46A to 46H applicable to notices served under section 25-30, or urgent action undertaken on a dangerous building under 29(3). The notices are:

• Building regulations compliance notice
• Continuing requirement enforcement notice
• Building warrant enforcement notice
• Defective building notice
• Dangerous building notice.

The charging order provisions supplement normal methods of debt recovery and allow LAs to make a charging order and register it in the appropriate land register. This means either registering in the Land Register of Scotland or recording in the Register of Sasines.

LAs entitled to their recoverable expenses under sections 25-30 (qualifying expenses) are also entitled to the registration and administration fees associated with the charging order and its discharge, and interest at a reasonable rate.

When LAs make a charging order it must be registered in the appropriate land register.

They must serve a copy of the charging order on the owner(s) of the building concerned and advise them of the effect of the charging order and the right of appeal. The charging order will specify the building concerned and the repayable amount. LAs can determine the most appropriate number of annual instalments between 5 and 30 and the date for payment of each instalment which, will be set out in the charging order.

Although the charging order sets out annual instalments, the owner can repay the full amount at any time. The LA may also agree a lower settlement sum with the owner if they choose.

When the outstanding amount has been paid, the LA must register the discharge of the charging order in the appropriate land register.

An owner can appeal a charging order in the same way as the other decisions and notices in the Act, that is within 21 days of being made. LAs can register the charging order immediately after they have made it even though it does not come into effect until the 21 day appeal period has passed, or if an appeal is made, the appeal has been determined.

The charging order provisions are also designed to help prevent owners from transferring ownership of their building to avoid their liabilities, and help prevent owners using the appeal mechanism as a stalling tactic. If a new owner acquires right to the building 14 or more days after registration, both the new and former owners will become severally liable.

Standard forms for a charging order and a discharge of a charging order are set out in the Building (Scotland) Act 2003 (Charging Orders) Regulations 2014, together with details of notification of the making of a charging order.

13.3 Apportionment of costs

Where the costs have to be recovered for work to a building with multiple owners the title deeds of the building usually confirm how the costs should be shared between the owners.

If this is not stipulated in the deeds or there are gaps in the deeds then the Tenement Management Scheme (TMS), schedule 1 of the Tenements (Scotland) Act 2004 applies.

Under the TMS, all owners pay an equal share of the costs of maintenance and repairs, except:

• when the work involves a part of the tenement that is not used by everyone (in which case only the owners of the flats involved should pay)
• when the floor area of the biggest flat is more than one-and-a-half times the floor area of the smaller flat (in which case repair costs should be split so the owner of the larger flat pays more).