Revised code of conduct for registered property factors: consultation

Part Three: Proposed Modification Order

25. In this section of the consultation paper we ask for your views on modifying certain provisions of the Property Factors (Scotland) Act 2011 (the 2011 Act) with the purpose of giving further effect to the draft 'revised' Code as published as part of this consultation and also attached at Annex A.

Removal from the register and compliance with the Code and property factor enforcement orders

26. Section 1(3) of the 2011 Act provides that 'registered'" means registered in the register of property factors. Section 2(1) of the 2011 Act provides a definition of the meaning of 'property factor' ^[29] . Section 14(5) of the 2011 Act provides that a registered property factor must ensure compliance with the property factor code of conduct for the time being in force.

27. A property factor may be 'registered' at the time when an application was made by a homeowner to the First-Tier Tribunal for Scotland Housing & Property Chamber (First-Tier Tribunal) under section 17 of the 2011 Act or when a property factor enforcement order is made by the First-Tier Tribunal under section 20 of the 2011 Act. While the application is being determined, there is potential for a property factor to be removed from the register in certain circumstances, including the following:

• A property factor must be removed from the register by Scottish Ministers under section 4(7)(a) of the 2011 Act where the registration has expired and where no further application to enter the register has been submitted.
• A property factor must be removed from the register under section 8(1) of the 2011 Act (following the expiry of any appeal period) where a further application to enter the register is refused or where the property factor is removed during its period of registration as they no longer meet the considerations for entry to the register.

28. In a previous case ^[30] , a Homeowner Housing Committee (under the previous jurisdiction of the Homeowner Housing Panel) determined that the property factor's obligation to comply with a property factor enforcement order ( PFEO) and the wider code was no longer enforceable as the property factor had been removed from the register subsequent to the PFEO being issued by the Committee. This meant the homeowner had no effective remedy for conduct which occurred while the property factor was still registered.

29. Under certain circumstances, Section 23 of the 2011 Act ^[31] does already allow the First-Tier Tribunal to take account of circumstances where the property factor is unable to comply with the order because of the lack of necessary rights.

30. In light of the findings of this case, the Scottish Government is exploring whether to make an order which would amend the definition of 'property factor' and the duty to comply with the Code under the Property Factors (Scotland) Act 2011.

31. The purpose of this amendment would be to ensure that:

• where applications under section 17 of the Act (failure to comply with the property factor code of conduct or the property factor's duties) are initially lodged when a property factor is registered, but where the property factor subsequently ceases to be registered, the First-tier tribunal for Scotland Housing and Property Chamber can still:
  • determine the application;
  • make awards;
  • enforce property factor enforcement orders which result from that application; and
  • make new property factor enforcement orders in relation to that application.
• the homeowner application must be initially lodged prior to the date the property factor was removed from the register.
• any duty to comply would continue to remain enforceable until such time as the First-tier Tribunal for Scotland Housing and Property Chamber has determined the application, including any issue of compliance with a property factor enforcement order(s) issued as a result of the application.

Consultation Question

Question 12: For the limited purposes described above, should a de-registered property factor, be required to comply with the Code, including property factor enforcement orders, despite removal from the register of property factors? Choose from the following options:

Yes

No

Unsure

Please explain your answer?

Liability for Registered Property Factors and time limits for submitting homeowner applications to the First-tier Tribunal

32. The Scottish Ministers are also exploring whether to specify, by Order, a time period in the 2011 Act within which an application must be initially lodged with the First-tier Tribunal for Scotland Housing and Property Chamber following an alleged failure to comply with the Code or the property factors' duties.

33. While this has not been an issue up until now, as the property factor regime has only been in place since 2012, it is likely to become unfair for historical complaints to be raised, unless they are raised with property factors in good time. Similar rules are common to the ability to raise other legal complaints in courts and tribunals, and it may be helpful to have a clear rule which applies?

34. Section 7.4 of the draft revised Code proposes that a property factor must retain (in either electronic or paper format) all correspondence relating to a homeowner's complaint for a period of three years or until such time that they no longer have authority to act for the homeowner for example the homeowner has ended their arrangement with the property factor due to a change in ownership of the property or by collective/majority agreement with other homeowners within the group (whatever comes first).

35. The proposal is that applications against property factors must be initially lodged with the First-tier Tribunal for Scotland Housing and Property Chamber within three years of the alleged failure on the part of a property factor.

36. This would not include continuing failures which began before the three year period.

37. The Chamber President would be given the ability to reject an application which does meet this criteria. Section 18(2) of the 2011 Act makes provision on the matters which the Chamber President can take into account if considering whether to reject an application.

Consultation Question

Question 13: Should a three time limit be introduced for homeowner applications to be initially lodged with the First-tier Tribunal for Scotland Housing and Property Chamber?

Choose from the following options:

Yes

No

Unsure

Please explain your answer making reference to any alternative suggested timeframe or criteria (if applicable)?