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Accreditation scheme for factors

3 July 2008

The Scottish Government has announced an accreditation scheme for property managers, to improve standards and help "weed out the cowboys".

To achieve accreditation, property managers will have to meet high standards of service and have a robust complaints procedure in place.

However, consumer groups have said that they do not think accreditation schemes are the “whole answer” to the problem of bad factoring services, as the code is voluntary and the worst offenders are unlikely to sign up for it.

Transparent accounting

Property managers (or factors) administer common areas such as roofs and stairwells in tenement buildings, as well as communal gardens in some modern developments. The accreditation scheme would mean that property managers would be expected to obtain quotations for repair work from a range of contractors and show transparent accounting and billing systems, clearly highlighting all management income being received.

Accreditation could be taken away if standards are not met and Mr Maxwell promised that tougher powers have not been ruled out if unacceptable practices persist.

As reported in the journalonline on 17 June, the Office of Fair Trading recently announced that it would be carrying out an investigation into property managers following an evaluation submitted by the Scottish Consumer Council.

The SCC had found that 60% of residents in the private sector had complained about property management services and 92% of those hadn’t been satisfied with the way their complaint had been handled.

Labour MSP Patricia Ferguson has been preparing a bill which would require property management firms to register and to have in place an out-of-court dispute resolution system, but is waiting for the OFT report before proceeding.

Wake-up call

Mr Maxwell said: "This is a wake-up call for the minority of property managers delivering a substandard service. The accreditation scheme will help weed out the cowboys.

Douglas Sinclair from the Scottish Consumer Council chair said the SCC had been expressing its concerns about the current system of Scottish property managers for a long time. However, there was a “hard core” of factors who had no interest in best practice.