Frequently Asked Questions
Q: Nobody told me about a Factor when I purchased my property, why do we have to pay for a factor?
A: This is the responsibility of your solicitor who should provide basic information about factoring arrangements. Your Factor will write to you when you move in introducing themselves. The Title Deeds or Deed of Conditions which forms part of your property titles provides for the appointment of professional managing agents or Factor to manage the common parts.
Q: What is a Title Deed or Deed of conditions?
A: A legal document outlining your own obligations in terms of the title of your property and shared responsibility for the common parts. It may explain the common parts and in what proportion you must pay for any maintenance to them.
Q: What is a float, why do I have to pay this?
A: In most residential developments, each owner is required to contribute a float on taking entry to the property, either as stipulated in the Title Deed or Deed of condition or as part of your Factors terms and conditions. The Factor requires this so that he has sufficient capital to instruct and pay for works and services, very often carried out without advance funding and invoiced in arrears to their clients.
Q: I already have buildings insurance, why do I have to pay the factor?
A: In the majority of instances your Title Deed or Deed of Condition, requires you to arrange a Common Buildings Insurance Policy via the Factor. There is, in these cases no need to have private buildings cover. It is possible that your private insurers will consider a premium refund, once you explain your obligations as a joint owner
Q: Why do we have common insurance? Can we not all just do our own thing?
A . There are huge advantages to a common policy, not least, an uncomplicated claims process in the event of a major claim. With only one insurer involved, devastating losses such as fire, storms and serious burst pipes can be dealt with far more expeditiously by a single loss adjuster appointed to manage the entire claim process ensuring that the building is restored as quickly as possible. Only one excess payment applies rather than many individual excesses.
Q: Do you get commission for this from the insurance company?
A: Yes. A factor will negotiate a commission commensurate with the work involved in arranging the insurance, notifying claims, liaising with owners and insurers and maintaining compliance with FSA regulations. The amount of commission negotiated must be disclosed upon request.
Q: Are contractors employed by you, subsidiaries of your Firm?
A: No, most companies operate an approved list of contractors where there is strict criteria and vetting of contractors to ensure that they are competent and have the necessary insurance and health & safety policies in place.
Q: Do you receive commission from contractors?
A: No, contrary to popular belief, we do not receive commission based incentives from contractors employed on your behalf.
Q: How do we change Factor?
A: Refer to your Title Deeds or Deed of conditions for guidance. It may that there is a requirement to call a meeting or a simple majority of the owners may be sufficient. Always make sure you have made plans to have a reputable manager in place before terminating the contract.
Q: Can you help me with my noisy neighbours?
A: This is very much as social issue falling out-with the factors remit. Factors have no power to engage with "noisy neighbours" We recommend that you contact your local police office or consult the Local Authority Anti-Social Behaviour Department.
Q: My neighbour has erected their own satellite dish, can the factor get this removed?
A: There are two issues here 1) did your neighbour obtain appropriate Planning Consent from the Local Authority? 2) Has the aerial/dish been attached to the building in contravention of the Deed of Conditions? Factors have no authority simply to have the aerial/dish removed. However we can assist by suggesting an appropriate course of action towards removal of the offending aerial/dish.
Q: Why do my bills vary?
A: It is feasible that charges will fluctuate in each billing period. This will be dependant on the specific services actually carried out during the period. You can normally agree with your Factor to spread the cost of maintenance by arranging a monthly payment method such as Direct Debit.
Q: Why do I Have to pay an Advanced Charge?
A. Some Title Deeds or Deeds of Condition specify that in place of a Float being held by the Factor clients must provide an Advanced Payment invoiced as an Advanced Charge which is then treated as a payment to account towards expenditure being incurred between accounting periods. Accounting periods are typically annually or half yearly and specified within the Title. At the end of the invoicing period the Advanced Charge and payment thereof is thereafter credited towards the detailed account. Any credit balances is thereafter offset against the next accounting period with any debit balance accruing falling due for payment.
Q: I rent out my flat, can the Tenant pay the Factors bill?
A: No. Our contract is with the joint Owners. If you let your property you will need to tell your Factor where to send correspondence, other than the tenanted address, for you.
Q: My neighbour caused a leak and brought down the ceiling, why should I have to pay the insurance excess charge?
A: In terms of the Policy cover, the requirement to pay any excess lies with the claimant, regardless of the nature or cause of the insured incident. However, in block of flats insurance the claimant is “The Co Owners” and not necessarily any one individual. Your Factor may agree a specific policy with the block Owners in advance of agreeing the management contract, or, have a specific policy on how to treat excesses for the Owners. This can be to charge them as a common expense or as individual charges.
Q: The owners association made a decision at the recent meeting that I do not agree with. Am I bound by it?
A: The Deed of Conditions will lay down how different types of decision are to be made. However, if it was a proper decision made at a quorate (quorum is the stipulated number of owners attending any meeting which makes the meeting valid), within the terms of the Deeds, then you are liable for your share of any agreed expenditure.
Q: There is an item on my account for legal expenses for pursuing an owner who had not paid their bill. Surely that is the Factor's cost.
A: Not necessarily. Owners are liable for the costs incurred in managing the common property and in the case of modern developments a Deed of Condition may make provisions that expenses incurred in pursing non-payment of bad debtors can be legitimately recharged to other Owners if the debt is unrecoverable. However you should consult with your title or ask your Factor to show evidence that they can do this
Q: The flat next door is let out. Is this legal?
A: Provided that there is no prohibition against letting in the Deed of Conditions or the Title Deeds, then an owner is entitled to let their property. However, the tenants must adhere to the rules under the Deeds, such as not causing noise, perhaps no pets etc, and it is up to the owner to ensure that they do so.
Q: What if there is a prohibition in Title against letting?
A: An Owner, or group of Owners, is entitled to raise a civil action against the offending owner.
Q: A friend of mine is a contractor. Can we use them?
A: Yes, providing it is agreed by the owners and they pass the managing agents vetting criteria for approved contractors. All contractors must hold relevant liability insurance and health and safety policies.