New Regime for Property Factors

August 28, 2012

New regulation of the property factoring industry in Scotland will come into place this year. The Property Factors (Scotland) 2111 will be in force from 1st October. There was fairly widespread criticism of the standards of factoring for some years before the government acted. Factoring is important in Scotland where so many residential properties in cities are flatted. The factors role is to manage property repairs and issues relative to the common property parts of tenements.

From 1st October it will be an offence to operate as a property factor unless you are registered on a national register of factors. Once registered factoring firms must then operate following a code of conduct. The code of conduct sets out minimum performance standards in various areas including levels of communication with householders, charging arrangements, instructing repairs, and debt recovery activities.

Finally the Act introduces a statutory dispute mechanism the Homeowner Housing Panel. Homeowners will be able to apply to that panel if they feel the factor dealing with their property is failing to keep to the code of conduct or failing in factoring duties.

Tenement living with several householders requiring to cooperate over repairs and so on, is a tried and tested system in Scotland. However with the rise of private lets and landlords not actually living in flats they own cooperation over common repairs has become a difficult area. The Tenement (Scotland) Act 2004 was an attempt to clear up some of the legal issues involved. Now this Act seeks to regulate better the factors actually responsible for day to day housing management. It remains to be seen how the new regime will work but both these Acts do strive to improve what had become a very frustrating system particularly for flat owners.