The Property Factors Code of Conduct, explained

Every registered property factor in Scotland works to the same document: the Code of Conduct for Property Factors. It is short, plainly written and enforceable. This note sets out what it is, what it asks of a factor, and what an owner can do if they think it has not been followed.

Where the Code comes from

The Property Factors (Scotland) Act 2011 created the register of property factors and, in section 14, requires the Scottish Ministers to prepare a code of conduct “setting out minimum standards of practice” for registered factors. Section 14(5) is the part with teeth: a registered property factor “must ensure compliance” with the code for the time being in force.

The current Code applies from 16 August 2021. It replaced the original Code, which had applied from 1 October 2012.

The overarching standards

Before the numbered sections, the Code sets out twelve overarching standards of practice. They apply to everything a factor does, and they read as plain obligations. A factor must conduct its business in line with the law, be honest, open, transparent and fair with owners, give information in a clear and easily accessible way, and never give information that is deliberately or negligently misleading.

Several of the standards shape day-to-day work directly. A factor must apply its policies consistently and reasonably, carry out its services with reasonable care and skill and in a timely way, keep appropriate records of its dealings with owners, handle personal information in line with data protection law, and respond to enquiries and complaints within reasonable timescales. The last standard rules out communicating with owners in a way that is abusive, intimidating or threatening.

The seven sections

The body of the Code is divided into seven sections.

1. Written statement of services. Every owner must receive a written statement of the terms and service standards of the arrangement, and it must be kept up to date. We cover its contents in a separate note.
2. Communication and consultation. How a factor keeps owners informed and when it must consult them before acting.
3. Financial obligations. How owners’ money is handled and accounted for, including what must happen when an arrangement ends or a property changes hands.
4. Debt recovery. How a factor deals with unpaid charges, fairly and in line with its published procedure.
5. Insurance. A factor’s duties where it arranges common insurance for a building.
6. Carrying out repairs and maintenance. How repairs are instructed, progressed and reported.
7. Complaints resolution. The factor’s own complaints procedure, which an owner normally uses first.

Each section is a set of short numbered paragraphs. Some set a firm period: section 1, for example, gives four weeks from agreeing in writing to provide services for the written statement to reach an owner. Many others point back to the factor’s own written statement for the detail, so the statement and the Code are read together.

When an owner thinks the Code has not been followed

Section 17 of the 2011 Act lets an owner apply to the First-tier Tribunal for Scotland (Housing and Property Chamber) for a determination of whether a factor has failed to carry out its duties or to comply with the Code.

There is a step before that. The owner must first notify the factor in writing of why they think the factor has fallen short, and the factor must have refused to resolve the concern, or unreasonably delayed in trying to. The Scottish Government’s introduction to the Code describes the same order: notify in writing, allow the factor a reasonable opportunity to put things right, then apply to the Tribunal.

Where the Tribunal finds a failure, it can make a property factor enforcement order setting out what the factor must do.

Section 1 of the Code says the Tribunal will expect a factor to be able to demonstrate how its actions compare with its Written Statement of Services. That is the clearest signal of what good practice looks like: the statement says what the factor will do, and the factor’s records show what it did.

What a factor keeps a record of

The Code does not prescribe a filing system, but its standards and sections point to the same set of records:

• the written statement of services each owner received, and when
• consultations with owners and their outcomes
• repairs from the first report to completion
• the money collected and spent for each development, and the statements sent to owners
• complaints, the replies given and the dates they were given

Keeping those together, against the development and the owner they belong to, is what makes it possible to answer an owner’s question quickly, and to show the Tribunal what happened if it ever comes to that.

Further reading

The full Code, including the overarching standards and each section, is published by the Scottish Government. The Housing and Property Chamber’s website explains how to make an application and what to expect.

Factorly is software for property factors, built around the Code’s requirements.