Property managers face compulsory licensing – but only in Scotland

Thursday 8th December 2011

Property managers in Scotland will have to be licensed as from next October, or be banned from operating.

The managers, known as ‘factors’ in Scotland, will be controlled by a new law, the Property Factors (Scotland) Act.

It will force property managers to be registered for the first time and introduce a body to resolve disputes.

In England and Wales, anyone can set up as a property manager. However, it is notable that at least one law in Scotland – on tenancy deposit protection – has now been copied in England.  

The move to license property managers has delighted people living in blocks, according to the Scottish press which cites a number of case studies, including one resident who queried a £120 bill for gutter maintenance.

It ended up costing him nearly £2,000 with penalty charges and interest by the time his case got to court. However, the factor agreed to drop the extra charges after the sheriff expressed concern about the penalties levied.

In another case, residents in a six-apartment block were charged £250 for a communal light to be repaired. Other residents elsewhere complained of being charged £44 when a light bulb was merely changed.

The new legislation is the subject of a current consultation on one of the central features of the Act – a code of conduct which will set minimum standards, such as providing written details of how fees and charges are calculated.

Operating as a property factor without being registered could result in a fine of up to £5,000 or six months’ imprisonment.

It is estimated that the new law will affect a large number of factors, who look after some 225,000 flats and tenements across Scotland. It is expected to purge ‘rogues’ from the system, leaving about 200 operators.

Research by Consumer Focus Scotland found that more than a third of people with factors had complained about the service provided.

Edinburgh City councillor Gordon Buchan, who has intervened in cases involving factors, said: “In Edinburgh you need to have a licence to become a window cleaner, but you can just call yourself a factor and do the job.”
 
Lorraine MacDonald, president of trade body the Property Managers Association Scotland, which has helped develop the new legislation, said it should improve communication between factors and residents.

She said: “The biggest concern is that we make sure bad property managers don’t get registered. It’ll be complete transparency. People should know what to expect from their property manager.”