Last edited 28 Feb 2021

Property factor

In Scotland, property factors manage and maintain common parts of a property that are owned jointly by a number of homeowners or by someone else, such as a developer. This might include for example:

Details about the ownership and maintenance of common areas and the appointment of a property factor should described in the title deeds for the property, but if they are not, then the rules set out in the Tenement Management Scheme (TMS) can be adopted.

The functions of a property factor might include:

Appointing contractors, caretakers, gardeners, insurers and so on.
Organising owners' meetings.
Inspecting the building and arranging necessary works.
Dealing with complaints.
Collecting payments and managing finances.

A property factor may be a private business, a local authority or a registered social landlord. They may be appointed by the owners (if two-thirds of the owners agree), by the developer of the property, or may be imposed by a scheme such as the right to buy. Owners each pay a share of the factor's fees.

If the appointment of a factor is not imposed on the owners of a building, they can choose not to have one and instead to arrange maintenance of the common parts themselves.

From 2012, owners been given legal protection by the Property Factors (Scotland) Act 2011.

It is an offence to operate as a property factor without being registered.

Property factors must comply with the Code of Conduct for Property Factors which sets out the minimum standards that must be met and the details that must be included in a written statement of services. They must provide a written statement of services to owners within 4 weeks of being asked for it, setting out:

The basis on which they are acting.
The services they will provide.
How much the services will cost and how this will be charged to owners.
A complaints handling procedure.
Timescales for responses to requests.
How the agreement can be terminated.
A declaration of interests.

Owners can make an application to the Homeowner Housing Panel if they believe their property factor has failed to carry out their duties, or failed to comply with the Code of Conduct, if the property factor refuses to resolve the complaint themselves or delays unreasonably attempts to resolve it.

NB:

The Property Factors (Scotland) Act 2011 defines a property factor as:

a person who, in the course of that person's business, manages the common parts of land owned by two or more other persons and used to any extent for residential purposes,
a local authority or housing association which manages the common parts of land used to any extent for residential purposes and owned—

by two or more other persons, or
by the local authority or housing association and one or more other person,

a person who, in the course of that person's business, manages or maintains land which is available for use by the owners of any two or more adjoining or neighbouring residential properties (but only where the owners of those properties are required by the terms of the title deeds relating to the properties to pay for the cost of the management or maintenance of that land), and
a local authority or housing association which manages or maintains land which is available for use by—

the owners of any two or more adjoining or neighbouring residential properties, or
the local authority or housing association and the owners of any one or more such properties, but only where the owners of those properties are required by the terms of the title deeds relating to the properties to pay for the cost of the management or maintenance of that land.