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

1. INTRODUCTION

About this report

1.1 This report provides an analysis to the Scottish Government consultation, 'The Property Factors (Scotland) Act 2011: Draft Code of Conduct for Property Factors'. The report provides a detailed analysis of each element of the consultation. It looks in detail at the responses to the consultation questions and provides an analysis of the views of particular groups, highlighting trends and issues where appropriate.

Background to the consultation

1.2 Over one third of Scotland's housing is located in buildings with common parts. The arrangements for managing the maintenance and repair of these properties are crucial if their condition is not to deteriorate.

1.3 In February 2009, the Office of Fair Trading (OFT) published the findings of a study it had undertaken into the property management market in Scotland. The report recommended that the Scottish Government take the lead in establishing a self-regulatory scheme with a robust complaints and redress system, backed up with better information and advice for consumers. The report also recommended that the Scottish Government should consider statutory regulation, if voluntary self-regulation proved to be ineffective.

1.4 In 2010, the Scottish Government undertook a consultation on proposed standards for a voluntary accreditation scheme for property managers. However, this was overtaken by the introduction of a Member's Bill which led to The Property Factors (Scotland) Act 2011 being passed in March 2011, and receiving Royal Assent in April 2011. The Act will come into force by 1 October 2012.

1.5 The primary objective of the Act is to create a statutory framework which will protect Scottish homeowners to whom property factors provide services. The Act has three main elements:

• a statutory register of all residential property factors, including land maintenance companies, in Scotland;
• a code of conduct, to be developed by the Scottish Government, which all registered factors must abide by; and
• a new dispute resolution mechanism where homeowners can take complaints about factors to a Homeowner Housing Panel, created by expanding the role of the current Private Rented Housing Panel (PRHP).

1.6 For the purposes of the Act, 'property factors' means property and land managers operating in Scotland, whether they are private businesses, local authorities or Registered Social Landlords (RSLs).

1.7 Section 14 of the Act sets out how the Scottish Government must go about establishing the Code of Conduct. It must be published in draft, consulted upon, and then must be approved by affirmative parliamentary procedure. The Code will set out the minimum standards of practice for registered property factors.

1.8 The Act comes into force on 1 October 2012 or "such earlier date" as Scottish Ministers agree. This means that property factors must have applied for registration by 1 October 2012 and must meet the standards set out in the approved Code of Conduct unless the implementation date is brought forward by Scottish Ministers.

1.9 This consultation sets out, and seeks views on, the draft Code of Conduct for residential property managers and land maintenance companies in Scotland.

1.10 The draft Code builds on the standards that were developed for the voluntary accreditation scheme which had been proposed earlier. The Code is organised into eight sections:

1. General obligations
2. Written statement of services
3. Communication and consultation
4. Financial obligations
5. Debt recovery
6. Insurance
7. Carrying out repairs and maintenance
8. Complaints resolution.

1.11 Some of the standards (for example those relating to the provision of insurance) will not be relevant to all property factors.

About the consultation

1.12 The consultation included 10 questions, relating to the proposed Code. Respondents were able to provide either an open response or complete the consultation questionnaire, offering systematic responses to each of the consultation questions.

1.13 The analysis was undertaken using a response matrix. Respondents were categorised into stakeholder groups and responses were fed into the matrix in accordance with the answer to the consultation question. General and additional points that did not relate to the questions were fed into a separate section of the matrix and analysed manually.

1.14 Twenty-four respondents chose not to answer the consultation questionnaire. These responses were read thoroughly and where the respondent directly answered any of the questions, the comments were fed into the appropriate place on the matrix. Other substantive comments were treated separately as with other responses.

1.15 The analysis drew out the themes emerging within each of the questions posed and the range of views being expressed. It also highlighted any specific trends among stakeholder groups.

1.16 Eleven consultative events were also organised as part of the consultation during October and November 2011. Ten of these were arranged by the Scottish Government and one by the Scottish Housing Regulator. The events were targeted at different sections of the property management industry and their customers including:

• private sector property managers;
• local authority and RSL (or their subsidiaries) property managers;
• land maintenance companies;
• customers of property managers; and
• customers of land maintenance companies.

1.17 The consultative events were held in Glasgow, Edinburgh and Aberdeen. The events were structured to provide an overview of the Act, and allow an opportunity for participants to discuss and provide feedback on the standards included in the proposed Code of Conduct.

1.18 A record of each of the consultation events was kept, and the views expressed have been considered as part of this report.