Are you a Registered Social Landlord engaged in property factoring? Are your factoring practices robust and ready for upcoming changes to the Property Factor's Code of Conduct?
The Property Factors (Scotland) Act 2011 is 6 years old 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 was introduced which sets minimum standards of practice for registered property factors in their business with homeowners.
The Scottish Government has been active in consultation regarding proposals for a revised Code of Conduct for registered property factors. The consultation has now closed and the final, revised version of the Code, although not yet published, is expected at any time.
By way of a reminder, the Code of Conduct includes the requirement for a factor to provide each homeowner with a Written Statement of Services. A clear, simple and transparent Written Statement of Services is, and will remain, fundamental to the Code.
The Written Statement of Services which a property factor provides must, in a simple and transparent way, set out the terms of the service and the delivery standards being provided. In the event that there is an application by a homeowner to the First-tier Tribunal, in order to demonstrate that compliance with Code obligations, a property factor must have the ability to demonstrate that (1) the Written Statement of Services is Code compliant and (2) that actions taken are in fact consistent with the terms of the Written Statement of Services which has been produced and provided to homeowners.
The written statement should set out the following:-
- The property factor's authority to act;
- The services being provided;
- Financial and charging arrangements;
- Communication arrangements;
- Declaration of any interest in the land to be managed or maintained; and
- Information as to how the factoring arrangement can be brought to an end
The Scottish Government deemed a review of the current Code of Conduct necessary to explore potential changes to the Code with a view to clarifying requirements and assisting interpretation of the Code.
Therefore, whilst the details of the revised Code are not yet known, what is clear is that changes are afoot. The underlying principles of the current Code will undoubtedly remain, however, property factors can expect to have to re-visit and review their Written Statements of Services in light of the revised Code.
By way of example:-
- It is likely that the timing for the production of the Written Statements of Services will be updated
- The Scottish Government appear to be looking for clearer information with regard to the basis of a property factor's authority to act. This will have particular implications for, for example, property factor's relying on custom and practice as their authority to act
- Many property factors are already utilising their websites as a platform for detailing their property service provision, however, many are not. Discussion at consultation suggests a drive towards the operation and maintenance of a website which homeowners would be able to access to find out about, for example, debt recovery policies, charging policies and, of course, the Written Statement itself. It will be interesting to see how, if at all, this is incorporated into the new provisions
An updated article will be produced when the revised Code is published. In the meantime, the anticipated arrival of the revised Code of Conduct for Property Factors brings with it an opportunity for Registered Social Landlords who engage in property factoring to pause and reflect on their current practices; to review their existing Written Statements of Services; and to ensure that they are not only complying with the provisions of the current Code but that they are ready for the arrival of the new Code.
If you would like further information or advice please contact a member of our team.