Property Factor – What You Need To Know

Property Factor - what you need to know

Table of Contents

What is a Property Factor?

A Property Factor is the person or company hired to manage and maintain the common parts of a building, and any common grounds owned by two or more homeowners.

They must be registered and comply with a Code of Conduct, which sets out the minimum standards they must meet. Whether dealing with day-to-day maintenance or one-off repairs, a property factor takes full responsibility to hire the best contractors, and ensure the work is carried out legally, safely and to a high standard.

What is a Property Factor responsible for?

A Property Factor is responsible for a number of ‘core services‘ including:

  • Routine and emergency property maintenance and repairs.
  • Lift maintenance.
  • Utilities for communal areas.
  • Tendering quotes and arranging payment for works.
  • Dealing with complaints and customer queries.
  • Managing development bank accounts.
  • Debt recovery.

 

And may also be responsible for a number of additional services:

  • Regular site visits.
  • Insurance  arrangements (block insurance, public liability insurance, and/or lift insurance) and re-instatement valuations.
  • Organising building surveys to prepare plans of preventative maintenance.
  • Project Management of major works.

Do I need a Property Factor?

You may be legally obliged to use a property factor if its noted in your title deeds. It’s likely you will need one if you live a modern new build flat or new housing estate. 

Property developers will choose a property factor for the initial period, (tie-in) of the development’s life, which can be up for 5 years. At this point, you have the option to change property factor if unsatisfied with their service.

You might also choose to appoint a property factor even when not legally obliged, as it removes the work involved in managing the common areas yourself.

Do I need a Property Factor
Common Areas
Common Areas

Common Areas

Common areas are the parts of a building or development that are used by more than one resident, and needs to be maintained. If a common area is in a state of disrepair, you need to determine who is responsible for the property maintenance and repairs.

If you do not know who is responsible, check your title deeds or ‘Deeds of Conditions’. If you cannot find the information you need, refer to the Tenement Management Scheme (TMS) which plugs any gaps in your deeds.

All owners of a building can play a role in the decision-making but also have to contribute to the cost of repairs and improvements. If you purchased your home via a right to buy scheme, responsibility for common areas may still lie with the housing association or council.

If you want to make improvements in common areas, it is important to consider what is noted in your deeds in addition to the preferences, safety and needs of fellow residents.

Title Deeds (Title Sheets)

The Title Deeds contain all the important information about your land or property. These are sometimes referred to as Title Sheets and are made up of four sections:

  • The address.
  • Who owns it.
  • Any mortgage over the property.
  • The burdens, which are unique to each building (or development).

The burdens state the rules about your building which you must follow as a homeowner, and can include:

  • How to appoint or dismiss a factor.
  • How to call a meeting of owners and make decisions.
  • Details of quorums for meetings is (the minimum number that can attend).
  • What your voting rights are.
  • Majority vote requirements to make decisions.
  • Any tie-in period of a property factor (if a new development).
  • What your share of costs are.
  • Who is responsible for the common areas of your property.
  • What you can and cannot do with your property.

 

If you don’t have a copy of your title deeds, you can download your title sheets from Registers of Scotland for £3 + VAT.

Tenement Management Scheme (TMS)

Sometimes your title deeds will have gaps which can lead to problems when trying to make decisions with other owners in your tenement. For example, your title deeds might not:

  • Explain how decisions should be made.
  • Describe all the common areas.
  • Give a share of costs that adds up to 100%.

 

If this is the case, you and the other owners can revert to the Tenement Management Scheme (TMS) found at Schedule 1 of the Tenement (Scotland) Act 2004. This fills in the gaps in title deeds and helps make flat owners’ responsibilities clearer.

The scheme explains:

  • What counts as maintenance.
  • The parts of the tenement every flat owner should maintain, otherwise known as ‘scheme property’.
  • How to come to agreements about maintenance, otherwise known as ‘scheme decisions’.
  • How maintenance costs should be shared between owners.

How do I appoint a Property Factor?

You may decide to appoint a property factor when not legally obliged to, e.g. if you live in a tenement block and the responsibility of arranging repairs is becoming too onerous.

If you live in an older property, your titles may be ‘silent’ on the matter of appointing a property factor and you will need to refer to the Tenement Management Scheme (TMS) to determine how you make decisions in your block.

You will firstly need a call a meeting of the owners to discuss the matter and discuss options of who you wish to appoint. Gather as many owners as possible. Landlord’s details can be gathered from tenants or from the Landlord Register.

Ensure you have a quorum of owners at the meeting, otherwise any decision made will be invalid. For a vote to stand, it is important to follow the rules in your titles or in the TMS.

If you get a majority vote to appoint a property factor, each owner will be responsible for paying their share of the fees, even if they did not want to appoint them.

Appoint a Property Factor
Call a meeting of owners
Hold a meeting
Get a majority vote

How do I get rid of a Property Factor?

If you are not satisfied with your current property factor, the chances are your neighbours feel the same and it’s time to get rid of your factor.

You firstly need a call a meeting of the owners to discuss changing factor. If you have an owners’ association, they can set this up for you. Failing that, speak to your neighbours to get contact details and gather as many as possible to ensure a majority vote.

It is possible that your title deeds will tell you how to hire or change a property factor, e.g. how to call a meeting of owners, make decisions, the quorum required, the majority vote required and any tie-in period. For a vote to stand, it is important to follow the rules in your titles.

You will also need to check your current factor’s termination period.

Once a date and time has been agreed, send out:

  • Meeting details.
  • An agenda noting the reason for the meeting is to discuss removing the current factor.
  • Details of other factors to replace them.

 

At the time of the meeting, ensure you have a quorum otherwise any decision made will be invalid. If you do not have a quorum, reschedule the meeting to another time.  

It will be helpful for someone to act as chairperson, and someone to act as secretary to take minutes.

Take a vote to remove the factor. If you get a majority vote, gather details of those in favour to change, as this may be required as proof from your current factor. Also take a vote on the new factor.

You can then terminate the contract with your current factor and appoint your new one.

Finding a Property Factor

If you are looking for a reputable factor, ensure they are registered on the Property Factors Register. This was established under the Property Factors (Scotland) Act 2011 (the Act) which came into force on 1 October 2012. This will ensure they are following the Property Factor Code of Conduct.

It is illegal for anyone to provide property factor services for a fee if they are not registered. Those found guilty of working as unregistered property factors can face fines up to £5,000. 

Property Factor Finding a Property Factor

Property Factor Code of Conduct

All registered property factors are legally required to ensure compliance with the Property Factor Code of Conduct. This sets out minimum standards of practice for registered property factors.

There are several elements to the Code of Conduct:

  • Written Statement of Services.
  • Communication.
  • Financial Obligation.
  • Debt Recovery.
  • Insurance.
  • Carrying out Repairs and Maintenance.
  • Complaints Resolution.

Written Statement of Services

The written statement of services should include detailed information about the Property Factors’ services:

  • Their authority to act on behalf of homeowners.
  • Services provided and associated costs (core and additional services).
  • Financial and charging arrangements (fees, apportionment of costs, payment of invoices, debt recovery, disputed items).
  • Communication arrangements (raising issues, timescales to respond, complaints procedure).
  • Declaration of interest.
  • How to end the arrangement (selling your property, termination arrangement).
  • Insurance. 
  • Fire safety.
  • Limitations of liability.

Getting the Best from your Property Factor

There are several steps you can take to make sure you are getting as much value as possible from your property factor service. These include:

  • Holding regular meetings between owners and the factor so issues can be discussed.
  • Starting an owners’ association.
  • Opting for extras not included in your agreement e.g., building surveys.

 

Communication is key – if your factor does not know about an issue you are facing, they will not be able to help you.

Some problems may not be your factors’ fault. They may not have been alerted to ownership changes, owners may ignore communication sent, or owners may assume problems have already been brought up by others.

Some owners may opt for patch repairs even though larger repairs are required, to save time and money, which could result in bigger problems down the line.

Your factor should be able to tell you if people have not responded to communication, but they may be unable to give you certain information due to confidentiality rules.

If you know a fellow owner is not responding to the factor, talk to them directly. You may need to emphasise the importance of the issue.

Paying your bills on time helps the property factor ensure consistency of services. They must ensure that your maintenance account stays “in funds” at all times, otherwise they will not have adequate funds to pay for the maintenance and repairs. This could also cause issues with insurance cover if premiums are not paid.

Getting the best from your Property Factor blocks of flats
Getting the best from your Property Factor housing
Property Factor Complaining about your Property Factor

Complaining about your Property Factor

It is best to start informally when you have an issue by contacting your property manager. In most cases, when issues are brought to the property managers attention, they will be able to resolve them. However, it is always wise to keep records of emails and phone calls should you need to take it further. 

If several owners are unhappy, you may wish to organise a meeting and invite a representative from the company, ensuring minutes are taken as a record of the conversation. However, should the property manager not resolve your issue, you can begin their formal complaints procedure which all registered property factors must have in place.

Issues you may need to complain about include poor workmanship, cost disputes, and failure of them complying with their Written Statement of Services, or Code of Conduct.

If you do not reach a resolution with their complaint’s procedure, you can take your case to the First Tier Tribunal Housing and Property Chamber.

This is a free service, and you do not require legal representation. Most hearings are informal. They will be attended by the factor company, Tribunal members and affected owners, and be chaired by a legal professional. The Tribunal members will be experienced in various property-related fields. 

Your Tribunal cannot dismiss your factor, change your title deeds or costs, or deal with any problem that emerged before October 2012 (unless it continued after this point). However, if you are successful, your factor may be told to pay you compensation, improve their practices, and can be removed from the Property Factor register.

Self-Factoring

Self-Factoring is when the owners and residents of a block take on the role of property managers themselves to deal with maintenance and repairs. This can work well for some flat owners if their title deeds allow it.

If you want to self-factor, you must be able to deal with a wide range of property-related issues and know who to contact when professional assistance is needed. It may be hard to enlist the services of builders, repair, and maintenance staff as many contractors are concerned they will not be paid for their work.

It can involve a great deal of work, so requires people who have time and interest. Even if all owners agree to collaborate, some may find that they are doing more work than others and having to deal with slow payers. They may even find themselves paying out more.

Some jobs may be hard to complete without experience, and it can be hard to get things organised when other owners are away from home.

Owners taking on this role cannot charge other owners for their services, but as a result do not need to register on the Property Factors Register.

The main benefit of self-factoring is that it will save owners the cost of management fees. It is likely to be more successful if an Owner’s Association is in place and members are happy to carry out various duties. Creating a maintenance bank account can also be helpful and should ensure everyone is paying their share. 

Property Factor Self-Factoring

change factor
guide

leave your details below to get our free guide

This simple infographic guide will help you to change factor.