Land-owning land maintenance companies: voluntary code of practice

Part 1 - Homeowners

Preparations for approaching the LOLMC

Homeowners should ensure that they understand the consequences of dismissing and replacing their property factor where it is a LOLMC, including any impact on their title deeds which may set out the arrangements for the management of open spaces, and should obtain independent legal advice before approaching their LOLMC. Regardless of whether homeowners seek legal advice, the services of a solicitor will be required to facilitate the transfer of the ownership of the open spaces to the successor body (that is, the conveyancing process).

If an Owners’ Association has not been set up, then homeowners should consider taking steps to do so (see A guide to setting up an owners' association | Under One Roof for more information in setting up an association). This could include rules on meetings of homeowners, taking votes, etc. which can facilitate the decision-making process on behalf of all homeowners in the development.

Dismissing an LOLMC is likely to involve the transfer of ownership of the open spaces to homeowners. Homeowners, therefore, will need to decide how best this can be achieved in their circumstances. In particular, homeowners will need to consider how the ownership of the open spaces is to be held. For example, should it be held by a company incorporated for that purpose, an association, a trust, or some other legal body? Homeowners should seek legal advice on this matter.

Homeowners should have in place arrangements for the management of the open spaces to be transferred before the transfer of ownership, which might be another property factor. This will ensure that open spaces are not left to deteriorate if maintenance work is required.

Section 1 – Information and the consent of homeowners

In order to facilitate the transfer of land, the LOLMC may require information such as:

i. Confirmation that a simple majority of all relevant homeowners have agreed to dismiss and replace the LOLMC as property factor over the open spaces, based on 1 vote per property, together with verifiable evidence.

ii. Confirmation that a successor body has been, or will be, established so that title to the open spaces can be legally transferred to it.

iii. Confirmation that an appropriate person/ body (e.g. a property factor or a landscape company) is in place to maintain the open spaces.

iv. In order to meet planning obligations, the property developer may have had to submit plans on how the open spaces were to be maintained. In these circumstances, confirmation may be required that the successor body will abide by any planning obligations in relation to the open spaces and that any necessary approval from the local planning authority/ statutory body/ relevant third parties has been obtained.

Homeowners might wish to consider setting up an Owners’ Association, if they have not already done so, to facilitate communication between themselves and the LOLMC.

Section 2 – Expenses

The LOLMC is the owner of the open spaces and so it is for them to set out any conditions for the transfer of ownership to the successor body. These should facilitate their dismissal as the LOLMC. These conditions might include the following:

i. The need to pay a fee for the transfer of the open spaces. The Scottish Government expects any such fee to reflect the fee paid for the open spaces by the LOLMC, which would normally be expected to be a nominal sum, such as £1. If any substantive fee is sought then homeowners should seek proof of the sum paid by the LOLMC to the developer.

ii. The need to pay the reasonable fees of the LOLMC for any costs incurred in the transfer of ownership of the open spaces. This might include any legal fees and outlays, which might include processing an application, provision of information etc.. The cost of any application could vary significantly depending on individual circumstances and may in some cases - for example where the LOLMC manages a large area on behalf of a significant number of properties - run into tens of thousands of pounds.

Section 3 – Understanding the full extent of the title transfer

Homeowners should be fully aware of the implications of the title being transferred to them, including any obligations to maintain the open spaces that are set out in the title deeds. This is likely to include any associated liabilities arising from being the owners of the open spaces, for example, insurance payments or having to appoint a contractor to undertake work.

It would not, however, include liabilities arising from any acts or omissions which took place when the LOLMC was owner of the land, such as a person injuring themselves because the open spaces were not properly maintained by the LOLMC. These types of liabilities will continue to be the responsibility of the LOLMC.

Section 4 – When an application can be made

Due to the nature of the services of LOLMCs, which can include the landscaping of open spaces, the full extent of the results of the work undertaken by a LOLMC may take a number of years to materialise, and it would seem unfair to seek to dismiss a LOLMC before, for example, any landscaping services have had a chance to establish. While individual facts and circumstances may vary, the Scottish Government considers that homeowners should not generally seek to make an application for the dismissal of a LOLMC until after a period of three years has elapsed from the commencement of the LOLMC’s services on the development. However, nothing we say here is binding and so homeowners could seek to take action sooner than 3 years where individual circumstances merit an earlier action.

Please note that there is no specific application form for homeowners to complete. The initial approach to the LOLMC by correspondence sent by email or post is sufficient to be deemed an “application” for the purposes of this Code. Alternatively, a LOLMC may publish its own application form to aid the process and homeowners can use this to apply.

Section 5 - Where an application has failed during the process to dismiss the LOLMC

Engaging with the dismissal process is likely to involve substantial work both for homeowners and the LOLMC. Repeated and vexatious approaches to an LOLMC to initiate the process for dismissal and transfer are not acceptable.

In the event that a request to dismiss the LOLMC is initiated but does not proceed to the ultimate dismissal of the LOLMC, the Scottish Government considers that homeowners should not apply again until a reasonable time period has elapsed or there has been a significant change in circumstances. The question of whether a further attempt to initiate the dismissal process is reasonable or whether there has been a change in circumstances will depend on each individual situation.

While there is no set time period, the Scottish Government considers that, generally, it is reasonable to allow for a period of two years to elapse before a new application for dismissal may be submitted. This allows LOLMCs time to engage with homeowners and address concerns outwith the dismissal process, while affording homeowners time to take any necessary steps to ensure any future application is successful.

Where, however, the reasons for an application failing are more administrative, such as not attaching correct paperwork etc., then the Government considers that homeowners should be able to begin a fresh application straight away.