Hansard

The Liberal Democrats welcome the member’s bill that Patricia Ferguson has introduced and offer our congratulations to her. I also congratulate the clerks, witnesses and committee members, all of whom contributed significantly to get the bill to this stage.

The bill aims to provide home owners with much-needed protection from factoring companies who overcharge, do little of the work that they are contracted to provide and put every obstacle and excuse in place when it comes to resolving a dispute with residents. We hope that the bill will raise standards in the property management industry, albeit that some of its detail will need to be looked at more closely at stage 2 if residents’ concerns are to be overcome.

Since the mid-1990s, developers have engaged factoring companies to maintain common areas and to charge residents for that service. They have done that by writing into title deeds that residents jointly own common areas and should seek to have a factoring company to maintain such areas. The usual situation is for the factor to be engaged initially by the developer. That means that rather than, for example, paying an up-front fee for in-perpetuity maintenance to the local authority, the developer hands on responsibility to the people who purchase their new home. Many such purchasers subsequently claim that their lawyer, estate agent or, indeed, developer did not inform them of the on-going costs that are associated with their new property. To add insult to injury, in recent years a new model has become quite common, in which the factor owns the common areas of land within a new development and is legally able to charge residents for the maintenance of the land and equipment that the factor owns.

As a member of the Local Government and Communities Committee, which is the designated lead committee for the bill, I have had the opportunity to examine the evidence that was presented by a range of bodies including factoring companies, housing associations and consumer bodies. We also took evidence from concerned residents and from the Minister for Housing and Communities. The committee supports the general principles of the bill subject to further examination of a number of issues. In our stage 1 report, we noted the clear evidence that testified to the problems that members of the public encounter with property factors. Some of the problems relate to the maintenance of shared parts of a building—for example, the stairwell in a block of flats. Other problems relate to the maintenance—or, some would say, the lack of it—of public open spaces and equipment.

The large volume of complaints that I receive in my constituency makes me certain that any existing or proposed voluntary accreditation scheme will not address the problem of factors that provide a poor service to consumers. We need to proceed with a statutory framework to regulate property factors and provide a reasonable quality of service to residents who own or use land or property that is maintained by a factor.

Part 1 of the bill places a duty on Scottish ministers to prepare and maintain a register of property factors. In order to be added to that register, the property factor must be considered to be a “fit and proper” person. That means that they can be removed from the register if they fail to comply with the code of conduct or any order of the proposed home owner housing committee. Registration can also be refused. As other members have said, the issue of deregistration raises some significant questions. If a factor fails to meet the standard and is removed from the register—that will take place only once dispute procedures have been exhausted—where will their removal leave residents? Clarity is needed to ensure that there are no unintended consequences in that regard.

The code of conduct will serve a useful role in setting out the standards that are to be expected from property factors. However, more detail is required on the standards that should be included in the code, as well as on how it can improve the service standards that property factors provide, without referring to reserved matters.

As all members will be aware from our work in our constituencies, property factoring issues affect many people throughout Scotland; the problem is not only in our cities. Around 225,000 house owners in Scotland are forced to use property factors to carry out repair and maintenance responsibilities in their estates. As things stand, it is extremely difficult to progress a dispute with a factor. Owner-occupiers can find themselves legally boxed in and unable—at least in practical terms—to get out of a contract with an unsatisfactory property factor.

The Scottish Government’s plans for a voluntary, industry-led accreditation scheme for property managers do not go far enough. The Government has stated that it will impose statutory measures should this prove necessary. It is clear that such mandatory measures are required now. There is cross-party support for taking action in this area, although opinion is split on whether a voluntary scheme should be tried first. We share the view of the Office of Fair Trading that a voluntary scheme gives people no effective means of redress if things go wrong. At the very least, a statutory accreditation scheme should be ready to be enacted should that happen.

The Liberal Democrats welcome Patricia Ferguson’s bill and are content to support it at stage 1.

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