Hansard

I am pleased to respond to the debate, which falls under the heading of post-legislative scrutiny by the Justice Committee.

The work that the committee carried out was, as we might expect, wide ranging. Among the main issues were property factors and land maintenance companies. I will say something about those, because most members will have dealt with cases involving one or the other of those subjects—if not both—at some point in their careers.

There has, of course, been relatively recent legislation in the area: the Property Factors (Scotland) Act 2011, which was introduced by Patricia Ferguson. Therefore, I am not surprised to see her in the chamber. The Government has carried out work to implement the 2011 act, which provided for a compulsory register of factors and land maintenance companies, a statutory code of conduct and the Homeowner Housing Panel. Home owners can apply to the panel if they believe that their factor or land maintenance company has failed to comply with the code of conduct or has otherwise failed to carry out its duties.

Since it started operating on 1 October 2012, the panel has received more than 300 applications. About two thirds have related to property factors, and one third to land maintenance. As members might expect, a number of those applications have subsequently been withdrawn or rejected for a variety of reasons. Applicants must, first of all, go through the complaints procedures that the factor or land maintenance company itself operates; the panel exists to deal with disputes on matters that have not been resolved, for example on standards of service. The panel has now heard about 20 cases and decisions are published on its website.

The 2011 act did not deal with all the issues on property factors and land maintenance companies. In particular, it did not make any changes on switching or dismissing and replacing factors or land maintenance companies, which is one of the key points that the committee considered.

The 2003 act contains provisions on the dismissal and replacement of factors. In new housing developments, the housing developer often appoints a factor through a manager burden. Manager burdens are time limited, with the normal period being three years. Once the initial period has expired, owners can appoint a different factor. That is done either by simple majority or through provision that is laid down in the title deeds. Once the manager burden has expired, a two-thirds majority can always dismiss and replace a factor regardless of what the title deeds say. In right-to-buy cases, a two-thirds majority can dismiss and replace the factor straight away.

Our view is that those legislative provisions on factors are generally satisfactory. The provisions on manager burdens allow a period of stability when a development is new; thereafter, home owners have the opportunity to switch factors.

The committee raised some specific points on right-to-buy cases. As issues in that area seem to be declining, given the fall in right-to-buy sales and the Government’s planned abolition of the right to buy, we are not planning any legislative changes on switching of property factors.

However, we agree that the legislation is not always easy to understand, so we will issue guidance on a number of issues, including information on the duration of manager burdens that builds on the explanatory notes to the 2003 act, and information for factors on making a home owner’s details available to other home owners, which might make it easier for home owners to obtain the necessary majority to switch factors. That relates to the point that Christine Grahame made about disclosure of owner information—she mentioned the difficulties with data protection. There is the added complexity that data protection is a reserved rather than a devolved matter, which means that addressing the issue in legislation would result in further difficulty for Parliament.

We will also provide public-facing information on dismissal and replacement of factors, and a guide on establishing residents associations. In some cases, guidance may be included in the publication “Common Repair, Common Sense”, which the Government took over from Consumer Focus Scotland last year. It is a well-written publication, which we will expand to provide further information to flat owners.

As I have said, there is existing legislation on dismissal and replacement of factors. The position is, however, much less clear when it comes to the dismissal and replacement of land-owning land maintenance companies. We have given serious thought to legislation in that area and have consulted on the issue. We are not saying that we will never legislate; if voluntary routes cannot deliver progress, we will legislate, but at the moment we are preparing a code of conduct on dismissal and replacement of land-owning land maintenance companies, which will cover matters such as the majority that is required, information that companies should provide to home owners, the transfer of the ownership of the land, and future arrangements for maintaining the land.

As our response to the committee indicated, we decided against legislation at this stage because land maintenance companies have been subject to recent legislation—the 2011 act. It was also uncertain whether legislation would be any more effective than a code of practice and any such legislation would, of necessity, be complex. It was a marginal decision—we could have legislated—so we will review the effectiveness of the code, keep the matter under close scrutiny and will come back to the Parliament, if necessary.

In our response to the committee, we indicated that, in the longer term, we will carry out a review of the arrangements that are in place for land maintenance on housing estates. Thoughts from members on what we could consider in that review would be very welcome.

The committee also raised concerns about access to the Lands Tribunal for Scotland. I know that my colleague Sandra White has particular concerns in that area. The issue that the committee raised was expenses liability. We are considering various potential options and, as we promised in our response to the report, I will write to the committee on the matter again. Potential options include—as the Lands Tribunal suggested in supplementary written evidence—a cap on expenses or changing the provision in the 2003 act on expenses to refer to “reasonableness” rather than to “success”.

The Lands Tribunal also suggested that it could be authorised to make more decisions on the basis of written material and site visits in order to reduce expenses. I understand the concerns that have been expressed about individuals facing potentially large bills for expenses, but we need to ensure that we are treating all parties fairly. We will write to the committee with our further thoughts.

The committee considered section 53 of the 2003 act, which gives enforcement rights to neighbours in respect of certain real burdens in title deeds that were created before 2004. The section was not in the original draft bill that the Scottish Law Commission proposed, but was added as the bill made its way through Parliament. The committee recommended that the commission review section 53. The Government has accepted that and, as the committee’s convener indicated, the Law Commission has agreed to a reference in that area. Work on that is most likely to commence early in its ninth programme, in 2015.

The Government is grateful for the committee’s report. We have responded to it and have provided an action plan. We will keep the committee and Parliament closely informed and will carry out monitoring, where that is necessary.

I will make a small final point. I am acutely conscious that, once again, we are involved in a debate in which David McLetchie’s sense of humour is sorely missed. He could always be relied on to provoke laughter from even the most unpromising material and his absence is felt nowhere more than in debates such as this.