Introduction and background
1. In 2011, after considering a Members Bill, the Scottish Parliament passed the Property Factors (Scotland) Act (the 2011 Act) with broad support across all parties. The 2011 Act came into force on 1 October 2012 and created a statutory framework providing protections for homeowners who receive services from a property factor. As part of that framework, a code of conduct (the Code) was introduced which sets minimum standards of practice for registered property factors in their business with homeowners.
2. The 2011 Act applies to private sector businesses, local authorities and housing associations who operate as a property factor. The 2011 Act introduced a mandatory requirement for property factors to register with Scottish Ministers. There are currently around 400 registered property factors, around 620,000 property addresses and 2,500 land records searchable on the register.
3. Scottish Ministers have responsibility for preparing the Code and, following parliamentary approval, the original code took effect from when the 2011 Act came into force. The Code includes requirements for a registered property factor to provide a written statement of service to homeowners and how they communicate and consult with homeowners. The Code also includes requirements in relation to financial obligations, debt recovery procedures, arranging insurance, carrying out repairs and maintenance and handling complaints from homeowners.
4. A homeowner who believes that their registered property factor has failed to comply with the code of conduct under section 14(5) of the 2011 Act or its duties specified under section 17(5) of the 2011 Act may apply to have their case considered by the First-Tier Tribunal for Scotland Housing and Property Chamber (First-Tier Tribunal) who are an independent tribunal separate from Scottish Ministers. The First-Tier Tribunal can issue a legally binding property factor enforcement order (PFEO) against a registered property factor if it finds that there has been a breach of the code or factoring duties. Scottish Ministers can also take a property factor's compliance with the code of conduct and PFEOs into account when considering whether an applicant should be entered on the register or be removed from it if already registered.