23 Oct 2012

New Regulation for Property Factors in Scotland

New Regulation for Property Factors in Scotland

Shona Morrison, Conveyancing Partner, welcomes the new regulation for property factors in Scotland.

Shona Morrison, Conveyancing Partner, welcomes the new regulation for property factors in Scotland.

Scottish homeowners frequently find that is a condition in their title deeds for property factors (similar to property managers) to be appointed to look after common parts of not only their building, such as roofs and stairwells, but in the case of new housing estates the common green space in these estates.  Around 225,000 house owners in Scotland use property factors.  These homeowners now for the first time have the benefit of regulation, by way of the Property Factors (Scotland) Act 2011 and its code of conduct which came into force on 1 October 2012.

The Scottish Government recognised that whilst the majority of property factors provide a good and effective service, there was still a need to protect homeowners from those factors providing a sub-standard service.  The Act aims to protect such homeowners and the code is underpinned by the principle of transparency, so homeowners are clear about what they are paying for, how the charges were calculated and how they can complain.

All property factors operating in Scotland must be registered on the public register of property factors no later than 1st October 2012.  This includes persons, whether individuals, partnerships or companies who in the course of their business manage common parts of land and local authorities or housing associations.  All those registered will be allocated a property factor registered number and registration will have to be renewed every three years.  This number must be included in any document sent to a homeowner.  Only those applicants determined to be a fit and proper person to be a property factor will be successfully registered.

As intended by the legislation, all property factors must provide certain standards of service as provided in the code of conduct.  If a homeowner is not satisfied with the service provided they can apply to the Homeowner Housing Panel.  The panel must then decide whether to reject the application or refer it to the Homeowner Housing Committee.  If the Committee agrees with the homeowner they can make an order against the property factor to take action as determined by the committee or make a payment to the homeowner.  If the property factor does not comply then they can be fined and this is a ground for removal from the register.

Shona Morrison comments “Whilst it is only in the minority of cases, this new regulation will be welcomed by our clients who are suffering from poor service from their property factor and we can advise them of the recourse they now have in such situations.  Going forward this compulsory registration can only help to enhance the reputation and integrity of the property management industry and ultimately be of benefit to our clients who are paying property management charges”.

Shona Morrison, Partner

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