Homeowners protected

Following the decision to remove Apex Property Factor from the official register for failing to meet minimum standards of practice, Housing Minister Kevin Stewart said:

“I have written to homeowners and parliament to update them on the decision to remove Apex Property Factor from the official register. The reason for this decision is that Apex have failed to meet minimum standards of practice for their duties.

“I am clear that the Scottish Government not hesitate to take appropriate action against factors who fall below the standards expected of them, and that this decision will provide an important safeguard for homeowners.

“This case demonstrates the importance of ensuring the regulations we have in place are effective. The Scottish Government will continue to do all we can to protect homeowners and tenants who benefit from the services of property factors.”

A copy of Mr Stewart’s letter to parliament is below.

As you know, the Property Factors (Scotland) Act 2011 (the Act) led the way in putting in place a statutory framework to protect homeowners who use the services of property factors. The Act requires factors to register, to comply with a Code of Conduct (the Code) which is intended to set minimum standards of practice, and provides a dispute resolution mechanism, through the First-tier Tribunal for Scotland (Housing and Property Chamber).

Scottish Ministers took action to remove Apex Property Factor Limited (Apex) from the register of property factors (the register) on 10 April 2019, as they no longer met the considerations for entry to the register. Apex were removed under section 8 of the Act. This section allows the following circumstances to be taken into account by Scottish Ministers when considering removal of a property factor from the Register under section 8 of the Act:

• The property factor is no longer a fit and proper person
• Non-compliance with the Code
• Non-compliance with a Property Factor Enforcement Order (PFEO)
• The property factor has not included the property factor registered number in any document sent to a homeowner

Scottish Ministers considered that the first three matters applied to Apex.

Apex lodged an appeal in the Sheriff Court against this decision and consequently the law allowed them to continue to operate as a property factor until their appeal was concluded.

A substantive hearing was held on the 19 December 2019 and the decision made by the Sheriff was to refuse the appeal. Apex did not appeal this decision within the 21-day period (by 9 January 2020) therefore Apex’s appeal against removal from the register is now concluded and they can no longer continue to operate as a property factor.

As required by the Act, a public notice will be published in newspapers circulating in the locality where Apex operated. In summary the notice indicates that, by virtue of section 9(2) of the Act, after 10 January 2020 (being the relevant date):

(a)     No costs incurred by Apex in respect of work instructed after 10 January 2020 are recoverable;

(b)     No charge imposed by Apex which relates to a period after 10 January 2020 is recoverable;

(c)     Homeowners may appoint new property factors (or decide to manage their properties without appointing a property factor), in accordance with the procedures made in relation to such decisions in their title deeds or, as the case may be, the Tenement Management Scheme; and

(d)     A notice of potential liability for costs may not be lodged by Apex under section 13(1) of the Tenements (Scotland) Act 2004 in respect of work instructed after 10 January 2020.

All homeowners of properties registered as being factored by Apex were written to on 13 January, to provide them with information in relation to the removal of Apex from the register.

The power to remove a property factor is exercised after careful consideration and in accordance with the requirements of the Act. Removal from the register is not something that Scottish Ministers undertake lightly but it does provide an important safeguard for home owners. Since the Act came into force, Scottish Ministers have removed 12 factors under Section 8 of the Act for no longer meeting the conditions for entry to the register, 3 of whom were removed for failing to comply with the Code or their factoring duties.

This case demonstrates that the regulatory regime is proportionate and effective in ensuring property factors meet the standards expected of them, and that Scottish Ministers will not hesitate to take appropriate action. I am sure you will agree that this approach is what homeowners and reputable property factors are entitled to expect.

KEVIN STEWART