Consultation on the Property Factors (Scotland) Act 2011 Draft Code of Conduct for Property Factors. An Analysis of Responses.

EXECUTIVE SUMMARY

Introduction

This report provides an analysis of responses to the Scottish Government consultation, 'The Property Factors (Scotland) Act 2011: Draft Code of Conduct for Property Factors'. The Act sets out a new statutory framework to protect homeowners that receive services from residential property factors and land managers in Scotland. It introduces a statutory register for all property factors (including land maintenance companies), a Code of Conduct which sets out minimum standards for all registered factors and a new dispute resolution mechanism where homeowners can take complaints about factors to a Homeowner Housing Panel.

Overview of the response

There were 138 responses to the consultation. Of these, 29 responses were identified as being identical and treated as campaign responses. They were therefore considered as a single response. In two cases, more than one response was identified from the same organisation. Again these were considered as single responses. For analytical purposes, this resulted in 108 responses being considered.

Nearly two-thirds of responses came from private individuals (including two MSPs) or Registered Social Landlords (RSLs) (or their subsidiary organisations). Representative/ membership/ professional bodies were also a significant respondent group.

Summary of responses

• Overall respondents were generally supportive of the Code, although many made detailed comments and suggestions regarding individual standards. A number of respondents suggested that the Code would benefit from further explanation and guidance. Some RSLs suggested that there should be exceptions for particular organisations, or where factoring activities were below an agreed threshold. Others felt that the timescale for introduction was unrealistic.
• Some representative bodies and private individuals raised concerns about the implications of Title Deeds or contractual agreements between property factors and homeowners taking precedence over the Code of Conduct.
• Some private individuals felt it would be helpful if the Code made clear that property factors act on behalf of homeowners. A number of RSLs felt that the Code would be enhanced by making reference to the obligations and responsibilities of homeowners in relation to the management of common parts of their property.
• In terms of providing a written statement of services, several respondents were concerned about the resource implications, potential complexity and likely increased costs of introducing written statements. Other respondents sought greater clarity about the status, content and need to update and reissue statements of service.
• Respondents were positive about the standards on communication between factors and homeowners. However, a significant number, particularly property factors, raised concerns about the requirement to consult over what may be very small pieces of work or in urgent situations.
• There was general agreement by respondents of the need for transparency in financial arrangements between property factors and homeowners. However, many property factors and their representative bodies queried the requirement for a client trust account to be opened in the name of each separate group of homeowners where a sinking or reserve fund is arranged. They suggested that this could be costly to administer and potentially complex to establish. Some RSLs argued that, as social landlords were regulated in other ways, there was not a danger of clients' funds being lost and the requirement for separate bank accounts should not apply.
• Respondents were generally supportive of the standards relating to debt recovery but a number felt that some of the terminology required further explanation.
• In relation to the provisions on insurance arranged by the property factor, the need for better information and advice for homeowners, up to date property valuations for insurance purposes, and greater transparency in the procurement of insurance was raised by various respondents.
• A significant proportion of respondents were satisfied with the provisions relating to repairs and maintenance and there was particular support for increased openness and transparency. However, there were a number of comments on how the standards would be applied in practice and some concerns that the Code does not recognise the role of the property factor as an 'agent' of the homeowner.
• Many respondents felt that the provisions for dealing with complaints were comprehensive. Some respondents felt that a clear definition of the term "complaint" would be helpful. Others argued that the Code could be more prescriptive on timescales for complaint resolution. There were also a number of comments in relation to dealing with the costs of complaint resolution.
• There were a number of additional comments from respondents. These mainly related to the other elements of the Act, primarily the process for the registration of property factors and the operation of the Homeowner Housing Panel.