Hansard

I welcome the opportunity to debate the Property Factors (Scotland) Bill, which was introduced to the Parliament by Patricia Ferguson. The Government recognises the need for action to improve standards in residential property management, or factoring services, in Scotland. Improving the condition of the common parts of housing in the private sector is one of our key priorities, and it is clear that property managers have a crucial role to play in that.

The quality of service that some residential property managers provide is a matter of concern to the Parliament and the Government. Duncan McNeil and Patricia Ferguson have already expressed concern about that quality, and I know that previous Administrations over the past seven years felt that that was a problem.

Back in 2003, the housing improvement task force recommended that a national voluntary accreditation scheme for property managers should be set up. More recently, in 2009, the Office of Fair Trading published a report that concluded that some form of self-regulation of the industry should be introduced in order to improve the quality of services that are available to home owners. As members will be aware, the Scottish Government has acted on those recommendations to develop a voluntary accreditation scheme for property managers and land maintenance companies, but we now accept that a statutory approach is appropriate. As I have said to both Patricia Ferguson and the committee, we support the aims and general principles of the bill. Consensus is growing both within the chamber and outside it on a statutory approach to the regulation of the property management and land maintenance industry being required, and we are comfortable with that.

Although the Government, like the committee, supports the general principles of the bill, we believe that there are a number of issues that require greater clarity. Duncan McNeil made points about many of those issues on behalf of the committee. We believe that drafting improvements are required to make the bill more effective and to avoid unintended consequences, and that there are provisions in the bill that, if they are unaltered, are likely to be unworkable and run the risk of failing to live up to the consumer’s reasonable expectations for effective action.

Since the Government submitted its evidence to the committee in June, I have been consistent on the areas in the bill that require further consideration. Since then, I have set out in more detail to the committee and the member in charge of the bill the issues that require further consideration. I have already offered Patricia Ferguson the advice and support that my officials and I can provide to help her to make the bill as effective as possible and to achieve the aims that we all want to see achieved. A wide range of stakeholders have also offered their views and suggestions at stage 1 on how the bill could be improved. I am interested in hearing about the amendments that Patricia Ferguson proposes to lodge in light of all the input that she and the committee have received.

Amendments are required to a number of the bill’s provisions. The three principal challenges are: issues relating to the definition of “property factor”; the consequences of deregistration for both the factor and the consumer; and the means of dispute resolution, which Patricia Ferguson and Duncan McNeil have referred to.

We believe that the definition of “property factor” in the bill fails to cover all the organisations that it should cover. For example, the current definition does not cover cases in which land maintenance companies own the land but home owners are obliged to pay for its upkeep. During stage 1, there seemed to be almost complete consensus that the bill should cover those land maintenance models, but it appears that they are not covered in the current drafting.

If a factor or land maintenance company were removed from the register, unintended consequences would arise from section 9 in particular, if it stays as it is drafted. Some of the points are legal and some are practical. I know that many of the issues were raised in evidence to the committee, and Duncan McNeil mentioned some of them in his speech.

On the legal side, if a factor or land maintenance company were deregistered, there might still be obligations in the title deeds for residents to use and pay that factor. Surely the bill should say that any such obligations would cease to have effect. I have been advised that there are difficulties in the interactions between the bill and the terms of the Title Conditions (Scotland) Act 2003. I have written to Patricia Ferguson on that, and I hope that we can agree amendments at stage 2.

On the practical side, I will give one example of an issue that could arise if a factor were deregistered. If the body being deregistered were a land-owning land maintenance company, it is not clear what would happen to the ownership of the land and whether the residents would be entitled to appoint a new factor.

The third major issue about which we have concerns relates to dispute resolution. Many of the points have already been covered by Patricia Ferguson and Duncan McNeil. I will try to go into them in more detail in my wind-up speech but, generally speaking, we would prefer the adoption of an ombudsman system, such as the existing property ombudsman, rather than the proposal in the bill.

We are supportive of the bill in general terms. If the issues are addressed properly at stage 2, the bill can be improved dramatically and made much more effective. At the same time, we can proceed consensually with the aim of achieving the intended consequences of the provisions, rather than, as has happened too often in the past, unintended consequences that the Parliament subsequently has to correct. I agree with the committee that we should agree to the general principles of the bill, but let us work together to improve it substantially at stage 2.

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