Land-owning land maintenance companies: voluntary code of practice

Part 2 - Land-owning land maintenance company (LOLMC)

Whilst we consider that the majority of LOLMCs are discharging their functions well there may be instances where for whatever reason homeowners wish to seek their dismissal.

LOLMC – Current in-house policy when homeowners seek their dismissal

We understand that some LOLMCs have an established policy for dealing with homeowners who seek to dismiss their appointment. While this Voluntary Code may reproduce some practices already in place, its overall purpose is to ensure consistent best-practice for homeowners and LOLMCs across the board, regardless of which LOLMC manages their spaces.

Section 1 – Signposting the Voluntary Code

LOLMCs should publish the voluntary code on their website and ensure that homeowners can easily access it if required.

Section 2 – Handling a request for dismissal

An application by homeowners can be made after a period of three years has elapsed from the commencement of the LOLMC’s services on the development.

The Scottish Government understands that, in the initial stages of property development, homeowners may not necessarily see the results of the work that a LOLMC has undertaken. Three years would seem a reasonable timeframe to allow the work undertaken by a LOLMC to begin to be realised.

Although three years is a reasonable period of time in general, this would depend on the complexity of the open spaces to be managed by a LOLMC. Where simple or complex arrangements are undertaken, LOLMCs can consider reducing or extending this time period depending on individual developments.

Section 3 – Notifying homeowners

It may be that not all homeowners have been fully engaged in an application to dismiss and replace a LOLMC. Where a LOLMC has been approached about dismissal and replacement, the LOLMC may seek to notify all homeowners in the relevant development about the application and signpost them to this Voluntary Code. This ensures that all relevant persons are aware that an application has been made and the relevant steps that might have to be undertaken to complete the process.

Section 4 – Voting thresholds

The LOLMC may ask for proof that a majority of the homeowners are in agreement to dismiss their LOLMC. This is a simple majority based on 1 vote per property.

The simple majority threshold is the same threshold needed to remove a property factor under sections 28 and 64 of the Title Conditions (Scotland) Act 2003. The Scottish Government consider this to be a fair and consistent approach and should apply where homeowners seek to dismiss their LOLMC. The required threshold for dismissal should not be set at a higher level.

Section 5 – Operational information to be provided to homeowners

The LOLMC should ensure that any relevant operational information, where available, is provided to enable the successor body to fulfil its obligations. On receipt of an application from homeowners the LOLMC should provide the following information, where applicable:

i. An outline of the work needed to maintain the land, which might include any open spaces, woodland areas, SUDS (sustainable urban drainage systems), children’s play areas, sports pitches, electrical/mechanical items, etc.

ii. Details of any contracts in place and their termination dates, particularly any contracts that are nearing renewal given the practical impact these could have during the dismissal and transfer process.

iii. Insurance cover that might be in place in respect of the land, particularly if renewal of any policy falls due during the dismissal and transfer process.

iv. Records of inspections that need to be kept for insurance purposes, or any other record that are required as part of the LOLMCs functions in managing the land.

v. Any planning obligations, conservation area, tree preservation order or other obligations over the land. This will assist homeowners if they are required to seek third party consent to the transfer of title.

vi. Any other information which may be relevant.

Section 6 – Conditions to be met by homeowners for transfer of land

As the current owner of the land, a LOLMC should be satisfied that homeowners have/ will set up a successor body to enable the transfer of title of land.

Homeowners should provide evidence that a successor body has been/ will be set up to manage the open spaces so that title can be transferred. For example, homeowners could confirm in an email an agreement that a successor body has been established and it undertakes to manage the land.

Section 7 – Associated costs incurred by LOLMC for transfer

The LOLMC should set out the financial conditions for agreeing to transfer ownership of land to the successor body, including any reasoning for the fee sought. The conditions of transfer might require the successor body to pay a fee for the purchase of the open spaces to be transferred. The Scottish Government expects any such fee to reflect any money paid by the LOLMC for the land and, depending on the arrangement between the LOLMC and the Developer, this could be a nominal amount, such as £1.

The Scottish Government understands that transferring title to land is an expense for a LOLMC and therefore any such costs incurred in the transfer of ownership, including legal fees and outlays,. which might include processing the application, provision of information etc. should be paid for by the successor body.

An estimate of these fees should be provided by the LOLMC as early as possible in the application process.

The Scottish Government expects any such fees to be reasonable.

Section 8 – Providing information on extent of responsibilities upon dismissal of LOLMC

In order to ensure that the title transfer is successful, the LOLMC should ensure that all necessary information in title deeds has been provided to those making the application so that the successor body understands and accepts:

i. that title transfer is subject to (a) any existing title obligations and planning designations as open space; and (b) any particular provisions required having regard to the particular site in question.

ii. that the transfer of the land includes any features owned/maintained (such as play parks, woodlands etc.) by the LOLMC on the land, and any associated liabilities.

The LOLMC should provide any additional information not detailed in the title deeds, or not readily available to the homeowners, to ensure the successor body has full details before the land is transferred.

Section 9 – Incomplete applications

If an application for dismissal does not proceed, a LOLMC should expect no further application from homeowners until a reasonable time has elapsed or there has been a significant change in circumstances. This will help prevent LOLMCs having to respond to repeated or vexatious applications, and any associated costs.

The Scottish Government recognises that engaging with the dismissal process may involve significant work for a LOLMC and that repeated or vexatious applications need not be accepted.

While there is no set time period the Scottish Government considers that 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 while affording homeowners time to take any necessary steps to ensure any future application is successful.

As to 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.

Where administrative errors have occurred, such as not attaching correct paperwork etc., then the Scottish Government’s view is that homeowners should be able to begin a fresh application straight away.

Any costs arising from a failed attempt may be charged to the homeowners, however LOLMCs should apply discretion to the individual circumstances of each application when considering whether to charge for a failed attempt.

Scottish Government

The Scottish Government has no involvement in the event of any disagreements between parties to the process set out in this voluntary code.

If any disputes arise about the process then these should be taken to an independent arbitrator for decisions. Any costs involved will normally fall to the losing party.