Revised code of conduct for registered property factors: consultation

Purpose of the consultation

5. Section 14 of the 2011 Act ^[8] requires that Scottish Ministers must prepare and publish a Code from 'time to time'. The original Code was published in October 2012 and an informal review began last year to consider whether the original code required amendment. Feedback provided to the Scottish Government on how the Code has been operating in practice as well as relevant decisions and the annual reports of the previous Homeowner Housing Panel ^[9] has been considered as part of this exercise.

6. After carefully consideration of the feedback received to date, we think that there could be benefit in exploring potential changes to the Code with a view to strengthening and clarifying certain requirements and also to assist the reader's interpretation of the Code.

7. A draft revised Code has been prepared accordingly as part of that process. The 2011 Act requires for any draft Code to be published and consulted upon with such bodies as are considered appropriate and with the general public. The main areas we have strengthened and clarified are:

• amending the Code's introductory text to provide more clarification on its purpose including what is and is not covered;
• clarifying the various situations where and when homeowners should expect to be provided with a copy of a written statement of service by their property factor;
• requiring a property factor to provide information to homeowners on how it will act in circumstances where another property factor is due to or has taken over the management of common property and land owned by those homeowners. This includes a requirement for the incoming and outgoing property factor to co-operate with each other, as required;
• requiring an incoming property factor who purchases the assets of an outgoing property factor to provide information to relevant homeowners on any implications this may have for them. This also includes a requirement for an incoming property factor to consider and respond to any complaint made to them by a homeowner which relates to an alleged breach of the Code by the previous property factor and which may lead to a continuing breach;
• requiring a property factor to provide information to homeowners on its duties under the 2011 Act particularly in relation to its property factor registered number and the notification of its factoring portfolio for the purposes of supporting the register;
• requiring a property factor to provide information to homeowners of any relevant professional or trade bodies it belongs to including membership details;
• requiring a property factor to confirm to homeowners its duties under the Code including making a copy available or signposting to where the Code is published in the public domain. This also includes requiring a property factor to signpost to relevant homeowners where all decisions relating to compliance with the Code are published in the public domain;
• requiring a property factor to provide clear information to homeowners on how they can end their factoring arrangement, if applicable, including any information it requires from homeowners;
• requiring a property factor to take reasonable steps to ensure that any third parties appointed to act on their behalf are aware of any relevant requirements of the Code;
• amending the code to clearly specify the requirements placed on a property factor in circumstances where they must or may consider providing information to homeowners if requested;
• including a glossary of terms used in the Code to assist the reader.

8. The purpose of this consultation is to formally seek views on:

• the impact of the original code of conduct for property factors?
• the themes and specific requirements included in the draft revised Code and if these require further amendment?
• whether the written statement of service and complaints handling procedures should be standardised across the factoring industry?
• amending certain provisions of the 2011 Act to give further effect to the proposals in the draft revised Code?
• the impact of the requirements of the draft revised Code on businesses and other interests?
• the impact of the requirements of the draft revised Code on equality groups?

• the impact of the wider requirements of the 2011 Act and whether this has led to improvements in the regulation of property factors.

9. Following this consultation, and in accordance with section 14 of the 2011 Act, the Scottish Ministers may decide to amend the draft revised Code (as published as part of this consultation) and then lay the revised draft before the Scottish Parliament for its consideration. Responses relating to the requirements of the 2011 Act will also be considered and these may inform future policy on whether further amendments to the 2011 Act should be explored.