The Scottish Government has launched a consultation into regulation for property management companies, known as factors in Scotland, amid claims they are not always run as well as home owners would like.
The use of factors has been increasing, especially for new build homes. A Statutory Code of Practice for registered property factors has existed since October 2012 and formed part of the Property Factors (Scotland) Act 2011. As well as a code of practice, the Act established a new statutory framework which property factors are obliged to abide by.
Broadly speaking, a property factor is responsible for managing common parts of land owned by two or more ‘other persons’, who have adjoining or neighbouring properties. The Homeowner Housing Panel (HOHP) was created to resolve disputes between disgruntled home owners and their property factor in relation to the property factors’ statutory duties and compliance with the Property Factors’ Code of Conduct.
When the Property Factors (Scotland) Act 2011 was passed, provision was made for a regular review of the Code of Practice, to ensure that it is still achieving its original objectives and striking the right balance between standards and duties placed on property factors.
In accordance with this provision, last year, Ministers began their first review of the code since its introduction, the findings from which form the basis of the consultation document. The consultation document cites recent annual reports from the HOHP which provide evidence of dissatisfaction with the way some property factors communicate and handle complaints.
The consultation sets out to establish a revised statutory Code of Practice for registered property factors and seeks views and evidence regarding whether the original code has had an impact and led to improvements in the quality of factoring services.
‘The Scottish Government’s vision is for the people of Scotland to be able to live in good quality homes which have high management standards and are fit for the future. Protecting the common parts of property and land as well as improving standards is an important part of that vision,’ said Kevin Stewart, Minister for Local Government and Housing.
‘We recognise that home owners are ultimately responsible for ensuring that shared spaces connected to their property such as roofs, communal stairways, shared gardens and other common land are properly maintained and kept in a good condition. This brings benefits in protecting a home owner’s investment in their property as well as making a crucial impact to their own and their neighbour’s health and wellbeing,’ he pointed out.
‘In circumstances where a property factor has responsibilities for managing that process on behalf of home owners, then they should deliver their services in a clear and transparent way and to the home owners’ satisfaction,’ he explained.
Stewart also pointed out that the requirements set out in the Property Factors (Scotland) Act 2011, including the Code of Conduct, are now approaching their sixth year of operation and in that time the number of registered property factors has increased year on year.
He acknowledged that there is evidence from the HOHP that there could be further improvement particularly in relation to communication and complaint handling and this presents an opportunity to consider strengthening the requirements of the Code and the wider regulatory regime.
‘Registered property factors are an important part of the provision of housing related services in Scotland and the Code sets the minimum standards of practice for how they should undertake their business with homeowners. While I recognise that some property factors will endeavour to provide a level of service to their customers that exceed these standards, there is an established pathway under the Act for home owners to seek resolution where they believe that the service they have received has fallen short of the standards required,’ Stewart added.
