15 February 2021

Version 2.0 of The Code of Conduct for Property Factors (the Revised Code), was laid before the Scottish Parliament last month. Subject to Parliamentary approval, the Revised Code will come into force on 16 August 2021 replacing the current Code which has been in force since October 2012.

As Factors appreciate, compliance with the Code is a legal requirement for all Property Factors by virtue of s14(5) of the Property Factors (Scotland) Act 2011. The requirement to comply will remain unchanged. 

Some of the key changes coming in with the Revised Code:

• “Overarching Standards of Practice” are added. These are various standards to which Factors must adhere when carrying out their work, including compliance with all relevant legislation and remaining honest, open and transparent in all dealings with homeowners.
• Any substantial change to a Written Statement of Services (WSS) must be provided to homeowners at the earliest opportunity within a 3 month period. The current Code allows changes to be provided within a 1 year period.
• The Revised Code provides further guidance and detail as to what must be included in each WSS. Additionally, they must include information about the 2011 Act and Factors’ duties under this. We would encourage a review of all WSS issued by your business to ensure they will remain compliant.
• There is now explicit reference to a Factor’s obligation to comply with Data Protection Legislation when handling personal data of clients.
• Compliance with anti-money laundering legislation and guidance is brought into a Factor’s financial obligations. The current Code is silent on this.
• A Factor must treat customers in default/arrears: “fairly, with forbearance and due consideration.” A Factor’s debt recovery procedure should advise customers that independent, free debt advice organisations are available to them.
• Factors are to provide an annual insurance statement to each homeowner or a statement within 3 months following a change in insurance provider. This is new.
• Further details must be included in a Factor’s Complaints Handling Procedure, including how a homeowner can make an application to the First Tier Tribunal should their complaint remain unresolved.

The Revised Code is an attempt to standardise Factors’ service across the country, some ten years after the introduction of the original Code. It is to be welcomed. While there are new provisions, the main driver behind the changes is to provide further detail to ensure consistent standards are implemented within the sector. The Revised Code also introduces a new, six page, glossary of terms, again signalling an effort to strengthen the clarity of the Code.

Should you have any questions in relation to the Revised Code, please do not hesitate to contact:

Grant Hunter, Partner: ghu@bto.co.uk / 0141 221 8012