What a Written Statement of Services must contain

The Written Statement of Services is the document that sets out what a factor does for a development and on what terms. Section 1 of the Property Factors Code of Conduct says what it must contain and when owners must receive it. This note walks through both.

Who receives one, and when

Section 1.1 requires a factor to give each owner a comprehensible statement setting out, “in a simple, structured way”, the terms and service delivery standards of the arrangement between them.

Section 1.2 sets the timing. A factor must take all reasonable steps to make sure a copy reaches owners within four weeks of agreeing in writing to provide services to them, or of the date of purchase of a property whose common parts it maintains. If the factor is not told about a purchase before the settlement date, the four weeks run from the date it receives notification. The same four-week period applies when a factor identifies that it gave misleading or inaccurate information in an earlier statement.

Where a substantial change to the terms is needed, the revised statement must be issued at the earliest opportunity, in a period not exceeding three months. Changes must be clearly marked on the revised statement or listed in a separate summary of changes attached to it. At any other time, section 1.3 says a copy of the latest statement must be available to an owner on request.

What it must contain

Section 1.5 lists the required contents in seven groups, lettered A to G, with the items numbered continuously from 1 to 21. Where the land is owned by a land maintenance company or someone other than the owners, section 1.6 replaces group A.

A. Authority to act. The legal basis on which the factor acts for the owners, saying so plainly where it acts on custom and practice. If it bought another factor’s business, whether it took on that factor’s outstanding liabilities. Any delegated authority, such as the spending level up to which it can instruct work and the situations in which it can act without consulting owners.

B. Services provided. The core services, including target times for routine and emergency repairs and how often the property is visited if visits are part of the core service. Other services and work that may be needed, with how any extra fees are worked out and communicated.

C. Financial and charging arrangements. The management fee, how it is structured and the policy for reviewing it. Each owner’s share of fees and common charges, as a percentage or fraction, or a statement that a flat rate applies. Any deposit or float, with how it is repaid on sale or termination. How payments into any sinking or reserve fund are collected. When and how often bills are issued and how they are sent. How payment is collected, the methods accepted and when late payment charges apply. The debt recovery procedure, which must be available on request.

D. Communication and consultation. How owners can get the information, documents and policies they need. Response times for written and telephone enquiries, with standard working hours. The complaints handling procedure. The privacy notice and the factor’s entry on the Information Commissioner’s register.

E. Declaration of interest. Any financial or other interest the factor has in the common parts or land it manages, for example as an owner itself.

F. The 2011 Act. The factor’s duty to register, the use of its registered number, and its duty to comply with the Code.

G. How to end the arrangement. When and how owners should tell the factor about a pending sale, any notice period and any charges for early termination. Owners’ rights to end or change the arrangement, with the legislation that applies. How the factor will co-operate with an incoming factor and what information it can share.

Saying so when there is nothing to declare

One requirement is easy to miss. Item 17, the declaration of interest, ends: “If no interest is declared, then this must be clearly stated.” A statement that is silent on interests does not meet it. The absence of an interest has to be written down.

Keeping it current

A statement is not a one-off. It has to be reissued when its terms substantially change, with the changes marked, and the latest version has to be available whenever an owner asks.

Section 1.1 also explains why care matters here. If an owner applies to the First-tier Tribunal, the Tribunal will expect the factor to be able to show how its actions compare with its statement. That makes three things worth keeping:

• each version of the statement, with the date it took effect
• which owners received which version, and when
• any acknowledgement an owner gave that they had read it

With those in place, a factor can answer the question the Tribunal will ask: what did this owner’s statement say at the time?

Factorly keeps each published version of a firm’s statement and records when owners acknowledge it.