FAQs

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 managing agents or Factor to manage the common parts.

Factoring charges usually include the costs of servicing, maintaining and repairing the common parts of your building and any associated common land, plus the Management Fee charged by the factor for administration of this. If you have a common buildings insurance policy, your factor may show commission separately for arrangement and/or administration of this policy. If you do have a common buildings insurance policy, you should let your mortgage provider or any other individual insurer, know of this requirement.

The Property Factors (Scotland) Act 2011 is the legislation that governs factors in Scotland. It obliges factors to register with the Scottish Government and to abide by a Code of Conduct. It also provides a dispute resolution route for homeowners through the Housing and Property Chamber of the First-Tier Tribunal for Scotland.

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.

In most residential developments, each homeowner 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 Written Statement of Services. The factor requires this so that he has sufficient capital to instruct and pay for works and services, that are carried out without need of advance funding. These are then invoiced in arrears to their clients. More major works normal require separate advance funding from all homeowners.

In many instances, your Title Deed or Deed of Condition requires you to arrange a Common Buildings Insurance Policy via the factor.

In these cases there is 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 homeowner in a building with common parts.

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. This should help ensure that the building is restored as quickly as possible.

Normally only one excess payment applies rather than many individual excesses.

A factor may negotiate a commission commensurate with the work involved in arranging the insurance, notifying claims, liaising with owners and insurers and, where applicable, maintaining compliance with FCA regulations. The amount of commission negotiated must be disclosed.

The vast majority of maintenance contractors employed by Member Firms are entirely separate entities and have no connection to the firm. Your factor will ensure, within their power to do so, that contractors are competent, and that they have the necessary insurance policies in place.

Some companies directly employ, or have subsidiaries employing, contractors. These arrangements must be carried out within Property Factors Act / Code of Conduct requirements.

No, contrary to popular belief, we do not receive commission based incentives from contractors employed on your behalf.

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.

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.

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. 

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. 

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 balance is thereafter offset against the next accounting period with any debit balance accruing falling due for payment.

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.

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.

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.

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

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.

An Owner, or group of Owners, is entitled to raise a civil action against the offending owner.

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.

Factors must act within the law, and the Property Factors (Scotland) Act 2011 details their obligations. These are further detailed in the associated Code of Conduct.

• Property Factors (Scotland) Act 2011 Code of Conduct for Property Factors
• Property Factors (Scotland) Act 2011

Apportionment typically refers to the allocation of property expenses, such as maintenance and insurance, between the buyer and seller at the time of a transaction, that involves a piece of real estate. When the Factor carries out this apportionment function, usually at the request of the sellers solicitor, they will charge an Apportionment Fee to cover the administrative cost of arranging the communication, calculations, systems updates and documentation. This work is not part of the factor’s core functions and only affects owners selling their properties. This activity normally falls outwith normal accounting periods and, by arrangement, can include calculations involving agreed repair work that will not be completed by the point of sale.

Not necessarily. If the Factor instructs a broker and the disclosed principals are the homeowners, then the Factor, acting as an agent of the homeowners, may simply be collecting the premiums.

In this case, where the Insurance Broker takes on the role of insurance intermediary and the Factor is not the controlling body (as there is no borrowing, there is no credit being extended and the Factor does not control their clients insurance payments, instead acting in a ‘post-box’ capacity), the Factor may decide that FCA registration is not required