19 Jul 2012

New Rules for Property Factors

New Rules for Property Factors

Gemma Perfect, Associate, casts her eye over The Property Factors (Scotland) Act 2011.

Gemma Perfect, Associate, casts her eye over The Property Factors (Scotland) Act 2011.

The Property Factors (Scotland) Act 2011 will come into force on the 1st of October. The aim of the Act is to increase protection and transparency by establishing a compulsory register, a Code of Conduct and a new statutory dispute resolution mechanism.

In Scotland a Factor is a person or firm who deals with property repair, maintenance or cleaning on behalf of property owners. When the new legislation comes into force all Factors must apply to be added to a public register and will have to make an annual return detailing the properties which they look after. Asset Managers and Conveyancing Solicitors will therefore be able to find out more easily whether a property is factored and by whom.

A Code of Conduct will also be established which will set out the minimum standards of practice. The main purpose of the Code of Conduct will be to increase transparency and to provide entitled parties with clear information on what they are paying for, how the charges have been arrived at and the options available to them in the event that they wish to make a complaint. This should stamp out improper payment requests and ensure that any charges imposed are not unreasonable or excessive. The draft Code of Conduct also states that factors must respond to queries received within prompt timescales, hopefully ensuring that transactions are not delayed due to late receipt of key factoring information.

The third element of the new legislation will be a statutory dispute resolution mechanism to be known as the Homeowner Housing Panel. Service users will be able to apply to the housing panel if they think that a Factor has failed to carry out its duties or failed to comply with the Code of Conduct. At present, options available to parties who wish to dispute factoring accounts are limited and it is hoped that the new housing panel will simplify the process of challenging unfair or excessive charges made by Factors.

The final draft of the Code of Conduct is likely to be published within the next month or so but if the current draft is followed then the new legislation should help to smooth the sometimes difficult relationship between Factors and their service users.

Gemma Perfect, Associate

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