Factoring the factor into the homeowner equation…
With the Property Factors (Scotland) Act 2011 tightening up the underhanded practises demonstrated by a considerable number of dubious property factors in years-gone-by, and the considerable number of apartment buildings in Scotland, the issue of building factoring and ensuring you are getting value for money has never been more relevant. Protections in factoring and building management law give Scottish consumers greater control when it comes to the management of their property, but questions are still asked of how to deal with factors when things go wrong.
The number of apartment buildings in Glasgow alone is impressive, with an estimated 73% of Glaswegians living in a flat of some kind, compared to other areas in England and Wales where this figure is under a quarter of the population. With people living busier lives, working longer hours and lacking the time or energy to inspect and complete work on their own properties, hiring someone else to do it is the logical option. Many employ property factors to do this on their behalf.
It is a criminal offence for a factor to operate in Scotland without being registered on the Scottish Property Factor Register (https://www.propertyfactorregister.gov.scot/PropertyFactorRegister/), which was established under the Property Factors (Scotland) Act 2011. This register holds information on registered Property Factors, who need to go through a vetting process, including payment of registration fees, for them to be able to operate as a factor in Scotland. This Act, which came into force on the 1st of October 2012, helped to improve situations which saw many consumers paying exorbitant fees to factors, often with additional unsolicited service and interest charges. These rogue traders could do whatever they wanted unregulated and often got away with it as they were largely unmonitored.
Many prospective homeowners don’t consider the cost of a factor when budgeting for a new property in a shared building. These costs can be considerable, depending on the factor and the size, age and location of the building. Information around whether the building is tied to a specific factor can be found in the title deeds for the property.
At consumeradvice.scot, we understand that there can be some confusion around what the factors actually do and what consumers can do when they find themselves in conflict with their factor for any reason. We have put together some of the more commonly asked questions about factors that we receive.
What are you paying the factor to do?
Factors are employed primarily as ‘Building Managers’. Their main duties and responsibilities include:
- Arranging for annual inspections of the property and subsequently dealing with any issues that these inspections reveal.
- Give estimates for one-off maintenance and repair work, gain consensus from the owners and arrange the work to commence if there is agreement.
- Other services related to the building – arranging common insurance for the building, dealing with service and maintenance contracts for gardeners, boilers etc.
Alternatives to contracting a factor
The alternative to employing a factor is to do it yourself. Self-factoring can save the financial cost of paying someone to manage the maintenance and repairs on the building, however sometimes trusting the professionals is the best course of action. Self-factoring a property can become very time consuming and living in a building as well as managing it can make things more difficult. At times, attempting to gain consensus of everyone in the building can be difficult. In all instances when it comes to building-related issues, title deeds should be referred to, and failing this, the Tenement Management Scheme can provide guidance.
Under One Roof (http://www.underoneroof.scot/articles/1347/Owners_Associations/Self_Factoring) provide an excellent guide on how to set up to self-factor, including running an owners association and managing communal finances through a maintenance account.
My Factor isn’t doing what I’m paying them to – What should I do?
- Complain directly to the factor – How can someone know that we have a problem if we don’t tell them first? By complaining directly to the factor in the first instance, and allowing them the appropriate time to respond, we can resolve a lot of issues relatively quickly.
- If your initial direct complaint is not answered to your satisfaction – You can request a copy of their complaints procedure, which they must have under the factoring code of conduct. The complaint should be made formally in writing and outline previous communication and the preferred outcome for you.
- Complain to the Housing and Property Chamber of the First-Tier Tribunal for Scotland – If you have complained to your factor in writing and not received a satisfactory response after a reasonable period of time, you can then complain to the Housing and Property Chamber, who will decide whether or not to take the complaint to a Tribunal.
Your title deeds should outline the process for appointing and dismissing a property factor. If this information is not present in the title deeds, then you should refer to the Tenement Management Scheme. Note that consensus with neighbours is required in order to dismiss or appoint a factor and title deeds outline voting rights in the building (i.e. how many need to agree to a motion to change).
If you would like more advice on Factoring, or in relation to anything related to contracts, you can contact consumeradvice.scot on 0808 164 6000. We are open 9am-5pm, Monday-Friday. You can follow us on social media – Twitter: @advicedotscot, Instagram: @advice.scot and Facebook: www.facebook.com/advice.scot/, or get ahead by visiting our knowledge centre at www.consumeradvice.scot.