We are experiencing an increase in enquiries relating to resident Wardens accommodation within sheltered housing developments owned by RSLs. With advances in technology in remote alarm systems and older persons generally becoming more independent, there is a trend of proprietors in sheltered housing developments opting to replace their live-in resident warden with a non-resident visiting manager.
This change results in an additional property becoming vacant within the development, this can result in additional benefits for both existing residents and the RSL proprietor as the property can be sold on the open market (either shared ownership or otherwise).
If residents within your sheltered housing developments express an interest in making this change, what do you need to consider?
- Voting Procedures
It is common for the title deeds for a sheltered housing development to include a Deed of Conditions which outlines the management and maintenance requirements for proprietors within the development. This should include provisions for the appointment and dismissal of the resident warden. This is usually determined by a vote of proprietors within the development. When carrying out such a vote it is crucial that you ensure the correct voting procedures are followed and the correct majority threshold is obtained for the decision to be binding on all proprietors within the development. If the correct procedures as outlined in your Deed of Conditions are not followed, then this decision can be challenged by a proprietor who does not agree with this.
If your Deed of Conditions does not provide for how the resident warden is appointed or dismissed, the terms of the Title Conditions (Scotland) Act 2003 applies which requires 2/3 of proprietors in a sheltered housing development to vote in favour of such a change.
- Amendment to Title Deeds by Lands Tribunal Application
Once you have successfully achieved the required vote to change the resident warden to a non-resident visiting warden, an application to the Lands Tribunal for Scotland is required to formally amend the terms of the development Deed of Conditions to reflect the new arrangements. Such an application would require a minimum of 25% of proprietors within the development to be in favour of and sign same, and would tackle the following points:
- Remove the requirement for a resident warden to reside at the development full time in the allocated Warden’s Accommodation
- Allow the Warden’s Accommodation to be sold on the open market and impose on the heritable proprietor an obligation to contribute an appropriate share of the cost of the maintenance, insurance and upkeep of the common parts of the development
- Provide for the appointment, remuneration and dismissal of the new non-resident visiting manager
Once the Lands Tribunal for Scotland has provided their decision on the terms of the application, which currently is taking up to a year from the date of submission of the signed application, the decision is binding on all proprietors within the development. We would recommend registering the decision in the Land Register of Scotland against all titles within the development to ensure the changes are transparent to current and future proprietors.
- Sale of Property and Sale Proceeds
Once the Lands Tribunal for Scotland decision has been registered, the former Warden’s Accommodation can be marketed for sale. The terms of the Deed of Conditions may dictate how sale proceeds from the Warden’s Accommodation are to be distributed. Before proceeding with any sale you should ensure you are complying with the title obligations and the terms of any agreement made with proprietors at the voting stage. Any legal fees incurred in relation to the Lands Tribunal for Scotland application incurred by the RSL may be deducted from the sale proceeds if these are to be distributed or proceeds are to be introduced into the development maintenance fund for the benefit of all proprietors within the specific development.
For more information or advice, please contact our team.
