Navigate the essentials of changing property factors with clarity and confidence. From reviewing title deeds and contracts to appointing a new factor, organising a vote, and coordinating the transfer of responsibilities, we’re here to guide you. AboveBoard ensures every step—communication, onboarding, and beyond—is handled smoothly and transparently for all owners.
Changing Factors: A Clear and Simple Transition Guide
Voting Requirements: Your title deeds will outline the process for changing the property factor, including the voting threshold required (usually a majority of owners). Some deeds might require unanimous consent, while others allow for a simple majority.
Notice Period: There may be specific notice periods or steps outlined in the deeds for terminating the contract with the current factor.
Termination Clauses: Review the contract with your current factor. It should specify the termination process, notice periods, and any fees that may be due upon termination.
Duration of Contract: The contract may have a minimum duration or renewal terms that could affect the timing of any change.
Notice Requirements: Ensure you understand how much notice you must give the factor and in what form (e.g., written notice).
Tender Process: You may want to put the management contract out to tender and invite several factors to bid for the position. Be sure to check the services, fees, and reputations of potential new factors.
Insurance: If the current factor manages block insurance, you will need to arrange for this to be transferred to the new factor or managed separately. Be sure to collect any necessary documents, including the claims history and valuation.
Maintenance Contracts: Review any contracts for maintenance, cleaning, or repairs. Decide whether to continue using the current providers or if you’d like to put these services out to tender through the new factor.
Check Credentials: Ensure that the new factor is registered with the Property Factors Register and complies with the Code of Conduct under Property Factors (Scotland) Act 2011.
Organise a Formal Meeting: You’ll need to call a meeting of all flat owners to vote on changing the factor.
Notification to Owners: Every owner must be notified of the meeting in accordance with the deeds. Ensure enough notice is given so that owners can attend or submit proxy votes if required.
Proxy Votes: Some owners may not be able to attend the meeting but can submit a proxy vote. Check your title deeds for proxy vote rules.
Quorum: Your title deeds will specify the number of owners who must participate (either in person or via proxy) to meet the quorum. A quorum must be met for the vote to be valid.
Majority Vote: A majority vote is typically required to approve the termination of the current factor. Ensure that the process follows the requirements set out in your title deeds.
Record the Vote: Keep clear records of the vote, including who voted and whether they were present or submitted a proxy vote. This documentation is essential for legal and administrative purposes.
Formal Notice: If the vote passes, notify owners. You must also formally notify the current factor in writing, informing them of the decision to terminate their services.
Acknowledgement: Request an acknowledgment from the factor and a confirmation of the transition date.
Request Transfer of Information: You can request a transfer of all relevant information from the current factor to the new one, including maintenance schedules, contact details of contractors, insurance policies, and other important documentation.
Handover: Ensure a smooth transition by coordinating with the current factor to hand over responsibilities. This includes the transfer of:
Sinking funds or reserve funds.
Maintenance records and service contracts.
Insurance information.
Concierge/Staff: If you have onsite staff, like concierges, clarify whether they are employed by the factor and what the transition of their employment will involve.
Provide Updates: Keep all owners informed throughout the process. Share details of the meeting, the vote outcome, the notice to the current factor, and information about the new factor.
Onboarding Process: The new factor will need to onboard your property, which includes setting up their management systems, contacting owners, and preparing for the transition.
Onboarding Forms: The new factor will likely require information from each owner (e.g., contact details, account setup) to get their systems in place.
Discover insights and tips in our Starting Out series.
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