Hansard

I am pleased that we are debating the Local Government and Communities Committee’s stage 1 report on the Property Factors (Scotland) Bill, and I would like to thank the committee for its careful consideration of the bill. I also thank the committee clerks and the staff of the Scottish Parliament’s non-Executive bills unit for their professionalism and sage advice; my constituency office staff, who have all developed a fair degree of expertise on the issue over the past few years; Mike Dailly of Govan Law Centre, not only for his help in getting us to this point but for championing in the courts those who have found themselves at the mercy of unscrupulous property factors; and the Evening Times and The Herald, whose campaigning work on the issue has given many people the courage to challenge bad factors and offer their experiences as evidence of the need for legislation.

I will spend most of my time addressing issues that were raised by the committee in its report. Before I do that, however, it is right to reflect on the reasons why legislation is necessary. On previous occasions, I have highlighted the situations that have been faced by my constituents, but I make no apology for doing so again, because the situation has not changed and will not change until the Parliament passes legislation that prevents rogue factors from operating as they currently do.

I have spoken before of Mr and Mrs A, who were being sued by their factor, and of Mr B, whose initial debt was grossly inflated by the addition of administration fees and charges for letters that were sent to him regarding his debt. Today, I will tell members about a constituent of mine who has had major problems with their factor, whose name, for the record, is Walker Sandford Property Management.

Walker Sandford wrote off £10,760 in charges, consisting of monthly compound interest, weekly reminder letters costing £15 plus VAT, and an assortment of legal fees. The original bill was for £536, but the sum quickly mushroomed to several thousand pounds. Walker Sandford commenced an action for payment of the debt at Glasgow sheriff court. The action was defended by Govan Law Centre on behalf of my constituent, and the action was dropped when Walker Sandford agreed that the actual debt was only £536. However, after dismissal of the action, Walker Sandford continued to add compound interest and charges to the earlier disputed bill. Interest charges in excess of £300 were added to the bill every month. Govan Law Centre applied for civil legal aid to enable my constituent to bring an action for declarator and interdict in the Court of Session. However, before that could be completed, Walker Sandford wrote off the entire bill of £10,760.

That is just one case, and one particularly bad factor, but there are many more cases. Only last week, a constituent came to see me on behalf of the residents of the development in which she lives. Two years after changing factor because of problems with the original one, they find that the problems are even greater than they were.

I know, too, from inquiries that I have received, that this is not just a Glasgow or west of Scotland problem and that there are difficulties across the country. People are looking to us to do what Parliaments do and provide them with legislation that will provide a remedy and safeguards.

I sincerely believe that we need to have an accreditation scheme that is underpinned by legislation, and I am pleased that the committee has agreed that a voluntary scheme will not work. That concept underpins everything else that the bill aims to do, so it is important that we establish that principle.

Members of the committee were rightly concerned that we should be clear about who will be covered by the bill, so I emphasise that land maintenance companies are covered. I deliberately worded the bill to say that the definition includes

“a person who owns and manages or maintains land which is available for use by the owners of any adjoining or neighbouring residential properties (but only where the owners of those properties are required by the terms of the title deeds relating to the properties to pay for the cost of the management or maintenance of that land).”

That makes it very clear who is covered.

On the point about the information that property managers are to supply for the purposes of registration, I understand the committee’s concerns about the disclosure of a company’s property portfolio. The point of that requirement is to ensure that those who are factored by a company can be notified that their factor has been deregistered in the unlikely event that that occurs. If we do not include that provision, they may be left in the dark and unable to make alternative arrangements. However, the committee is right to suggest that the database should be updated only on a yearly basis, rather than immediately a change occurs. I will seek to clarify that provision at stage 2. I propose that the information should remain confidential and should not be published.

One of the most debated points in the committee’s report is deregistration, which I accept is the thorniest issue that we must grapple with. Deregistration must be the ultimate sanction and, given the other provisions in the bill, I view it as a last resort. The measure will be used only when a property factor exhibits a sustained failure to provide an appropriate service, when the home owner housing committee recommends to ministers that deregistration is justified and after the factor has been afforded the opportunity to make representations. I recognise that factors are concerned that the provision might prevent them from recouping moneys that are fairly due to them. That is certainly not my intention, and I will review and amend the provision if necessary.

I would expect that ministers would serve notice of their intention to deregister a factor in order to provide home owners with the opportunity to select a new factor prior to the deregistration taking effect.

I accept, and am acutely aware, that land maintenance companies are an added complication in that regard. Members will be aware that work has been on-going in that area, not least among some of the organisations that have lobbied us and given evidence to the committee. I am planning—and have started—to work with those organisations to lodge amendments at stage 2 that I hope will address what is a particularly difficult but very interesting and concerning element of the property factor system.

On enforcement, I expect that, as with any criminal activity, non-compliance could be reported to the police and action could be taken in the usual way. Again, I will review that element of the bill and amend it if necessary.

In order to make the system as transparent as possible, I intend to lodge an amendment that will replicate the system that the Government proposes for landlord registration, whereby a registration number or symbol—I tell the Minister for Housing and Communities that we can have that debate any time he likes—is used to identify those companies that have successfully registered.

The committee report seeks more detail on the code of conduct. I emphasise that I do not intend to reinvent the wheel in that regard. Since March 2009, the Scottish Government has been working in partnership with the property management industry and other key stakeholders through its working group. The working group has developed and consulted on core standards for a voluntary accreditation scheme. Those standards cover issues such as communication and consultation, financial obligations, debt recovery and insurance, contractors and repairs and complaints resolution.

Many positive responses and suggestions came from the recent consultation, not least one of the most common suggestions, which is that accreditation should be compulsory. I believe that that body of work ensures that the Government is well placed to fulfil the requirements of my bill and that it can prepare a code of conduct for introduction when statutory regulation comes into force.

There has also been discussion about the mechanism for dispute resolution. We all agree that there needs to be such a mechanism. Where I differ from the minister and the Property Managers Association Scotland is on what that mechanism should be. I believe that the existing home owner housing panel is best placed to deal with the complexity of the cases that will arise. I have provided the Presiding Officer with a detailed account of the likely costs, which I am pleased he has accepted and which I am sure can be shared with the committee.

I hope that I have addressed most of the issues that are raised in the committee’s report. If I have missed any, I will try to address them in my closing speech.

I move,

That the Parliament agrees to the general principles of the Property Factors (Scotland) Bill.

15:45