Property managers and factors
You may decide that the easiest way to keep up with maintenance and repair work is to hire a property factor to take care of it for you. This page explains what factors do and how they are regulated.
What does a property factor do?
Property factors are property managers and can do a combination of the following jobs:
- hiring, supervising and paying day-to-day maintenance employees, such as a caretaker, cleaner or gardener
- organising owners' meetings so you can make decisions about the running of the building
- inspecting the building at agreed intervals and arranging to get any necessary maintenance work carried out, including hiring contractors and overseeing their work
- arranging for repairs to be carried out, including getting quotes, hiring contractors and supervising their work
- dealing with any complaints owners have about the maintenance or repair work
- taking charge of a joint maintenance bank account, collecting payments and chasing up anyone who doesn't pay
- organising common insurance for the building.
Do we need a property factor?
In some situations, you may have to hire a property factor. This may be the case if:
- it's compulsory to have a factor - this will be stated in your title deeds
- you live in a newly built development - the developer may have the right to appoint a property factor of their own choosing for up to five years after the property is built, or three years if you live in sheltered housing or retirement accommodation. This means you won't be able to choose your own factor until this time is up.
- you've bought your flat through right to buy - the council or housing association you bought your home from may have the right to appoint a property factor for up to 30 years, or until two-thirds of the flats in your block have been sold through right to buy.
If you're not required to hire a property manager, you can still hire one to reduce the stress of managing the property yourselves.
Is it worth hiring a property factor?
Property factors charge for their services, the more responsibilities they have the more they'll cost. Getting a factor might be worthwhile if dividing repair and maintenance tasks between the owners is awkward, time consuming or stressful. For example, some owners might not live in the building, they could be difficult to get hold of, or too busy or disinterested to arrange maintenance work. The factor will be an expert in running properties and hiring suitable contractors, and they can advise you on repair and maintenance issues.
How do we hire or change a property factor?
Your title deeds may set out the process for hiring a property factor. If they don't, you can make a decision using the tenement management scheme (TMS).
Normally, your title deeds take precedence over the TMS. However, if your title deeds say that all the owners need to agree before you can hire or fire a property factor, you can override this. This is because it makes hiring or firing property factors very difficult. In this situation, if two-thirds of the owners decide to hire or fire a factor, they can do so.
Every owner has to pay their share of the factor's fees, even if they voted against their appointment.
Where can we find a property factor?
The Property Managers Association Scotland Limited website has a list of property factors. Alternatively, your local council may run a property managing service for owners - check your council's website to find out more.
All property factors need to be registered in the register of property factors, so make sure that they're registered before appointing a factor.
Property factor registration
Every property factor in Scotland must be registered in the register of property factors. They must also comply with the Code of Conduct for Property Factors. This sets out the minimum standards of practice that property factors must comply with.
It is a criminal offence to not be registered. The factor could be fined up to £5,000 (level 5 on the standard scale) if found guilty.
What responsibilities do property factors have?
Under the Code of Conduct property factors must give homeowners a 'written statement of services'. This must state:
- authority to act - the basis on which they are acting on behalf of all the homeowners in the building
- services - the main services that they will provide
- additional services - any services that may be required in addition to the main services provided
- cost and billing - how much their services cost (including how they will be split between homeowners), how often homeowners will be billed, how payments will be collected and the process of changing the fee
- complaints handling - their complaints handling procedure
- timescales for responses to requests - how soon they will respond to letters, emails and phone calls
- declaration of interest - any financial or other interest the building being managed, e.g. are they a letting agent or a homeowner themselves?
- ending the arrangement - how to bring the property factoring agreement to an end.
In addition, property factors must not intimidate or be abusive to homeowners. There must also be a clearly written procedure for debt collection and any charges for late payment of factoring fees must not be excessive. See the Code of Conduct for Property Factors for the complete set of standards that property factors must stick to.
Complaints and the Homeowner housing panel
The Code of Conduct requires property factors to have a complaints procedure in place and provides for a dispute resolution service for property factors and homeowners if complaints are not resolved. Your factor should provide you with a copy of their complaints procedure and give you details on how to take your complaint to the homeowner housing panel if necessary.
Here's what you need to do if you want to make a complaint about your property factor:
- write to your property factor - explain why you're complaining, e.g. they haven't carried out their factoring duties correctly, or they haven't complied with the Code of Conduct for Property Factors
- complain to the homeowner housing panel - if your property factor refuses to resolve your complaint, or delays unreasonably in resolving your complaint, you can then take your complaint to the homeowner housing panel.
You can also take your complaint to the Property Managers Association if the property factor is registered with them.
The homeowner housing panel has set up a pilot mediation project, as an alternative resolution process, for homeowners and factors. Both parties have to agree to enter the process, and the mediation will be facilitated by the Scottish Tribunals Service.