Consumer Experiences of Property Management Services: A Case Study

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Consumer Experiences of

Property Management Services:

A Case Study

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Executive Summary

In December 2006 the Scottish Consumer Council commissioned ODS Consulting to undertake a short study to assess consumer experiences of property management (factoring) services in the Dennistoun ward area of Glasgow. The study involved a survey of home owners, two public events and interviews with factoring companies providing a service in the area.

Issues relating to the management of property with common and shared parts have been the subject of scrutiny in recent years. The Housing Improvement Task Force identified a range of measures that could strengthen the framework in which such property is managed. This has led to a number of legislative changes. However, proposals to introduce an accreditation scheme that would establish nationally recognised standards for the provision of property management services have yet to be effected.

While the findings of this study are based on a relatively small sample of home owners, they suggest that the maintenance of property with common and shared parts is an unsatisfactory experience for many.

There are an estimated 434 buildings with flatted accommodation in Dennistoun. Around 198 are factored by two Registered Social Landlords (RSLs). Of the remainder, 13 factors were identified providing services in 108 buildings. The dominance of two factors in the market demonstrates the relationship between property ownership and management arrangements. For some individual owners the market therefore operates in a restricted way and places a significant onus on a framework being in place that offers a degree of protection to individual consumers. The rise in the buy-to-let market in some areas strengthens the need for such a framework.

Many consumers perceive there to be a lack of clarity about the role of factors and what services they can reasonably expect from their factor. The need for improved communication was a recurring theme in our consultations that is at the heart of many of the criticisms levelled at factors.

Both owners and many factors support the case for the introduction of an accreditation scheme. It would offer a benchmark against which owners could exercise objective judgements of quality of service received.

However, many owners are not aware sufficiently aware about their responsibilities or the legal framework for managing flatted accommodation. The study highlighted the need for good quality independent information and advice to be available

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1. Introduction

Aims of the Study

1.1 In December 2006 the Scottish Consumer Council commissioned ODS Consulting to undertake a study to assess consumer experiences of property management (factoring) services1_{in the Dennistoun ward area}

of Glasgow.

1.2 There were two elements to the study. Firstly, mapping the existing arrangements in terms of the numbers of companies providing a factoring service to properties with common and shared parts, the services offered and the charges applied. Secondly, gathering consumer views of the services they receive, problems experienced, complaint handling mechanisms and attitudes towards the establishment of a national accreditation scheme.

Background

1.3 The Housing Improvement Task Force (HITF), established in 2000, reported that there is a lack of understanding over the role of property managers. The Task Force raised concerns over the quality of service provision and highlighted the lack of any nationally recognised standards for the provision of property management services. It recommended the establishment of a national accreditation scheme for property managers.

1.4 Research into the views of owner-occupiers towards factoring services provided by local authorities was undertaken by the Scottish Consumer Council in two studies in 1998 and 1999. The latter2_{, involving a survey of}

owners in six local authorities, was conducted with the aim of establishing the quality of the relationship between local authorities as property managers and owners in ex Right to Buy properties. The study identified:

owners felt that they had not received adequate information regarding

•

common repairs responsibilities prior to purchasing their home;

common repairs were usually undertaken by the local authority, but

•

owners expressed dissatisfaction regarding the quality of work and their inability to influence the work being done;

owners were concerned that they were expected to pay for repair work

•

at short notice, although conversely, they found it difficult to recoup costs from the council when instructing works themselves; and

there was a lack of provision of basic information on issues such as

•

cost of works and buildings insurance.

1_{For the purposes of the study we defined a property management as ‘the management of}

the administration of common and shared property of a property by an agent appointed by or responsible to the co-proprietors’. This agent is known as the factor.

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1.5 However, as was highlighted in a more recent study3_{, property management}

services are delivered by organisations within the private, public and Registered Social Landlord (RSL) sectors. The underlying reasons for each sector becoming involved in property management vary considerably, leading to differences in the way in which services are organised and delivered. Despite a range of standards, guidelines and codes of practice being in place, there is no commonly accepted quality framework which consumers can refer to when appointing or assessing the performance of property managers.

1.6 The study found there to be general support amongst service providers, consumers and representative organisations for the development of a national accreditation scheme. However, participation was likely to be dependent on the agreed standards representing good practice while not being too onerous to place participants at a financial disadvantage, and having active support from the Scottish Executive and other stakeholders.

1.7 It is intended that this short study should capture the views and experiences of co-proprietors receiving a service from the private companies and RSLs, building on the work that was previously undertaken of services provided by local authorities.

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2. Methodology

2.1 The study has been undertaken in two parts. Firstly, a short survey was carried out of a sample of home owners living in properties with common and shared parts in the area. To achieve this, the two RSLs identified as operating in the area were contacted and agreement gained that they would circulate the survey to all owners whose property they factored. Three hundred surveys were then distributed across the area to householders living in properties which were identified as potentially receiving a service from a private factor or self-factoring. As a result of a relatively low response rate, a further 460 surveys were circulated. In total, 1,151 surveys were distributed. In all cases a prepaid envelope was provided and responses incentivised. A copy of the survey was also posted on the Dennistoun community website. (www.dennistoun.co.uk).

Table 2.1: Survey response rate

Method of Circulation No. of Surveys _Issued No. of Surveys _Returned % Response _Rate

RSL1 201 30 15%

RSL 2 190 35 18%

Private & self-factoring 760 69 9%

Total 1,151 134 12%

2.2 A total of 134 completed survey forms were received representing a 12 per cent response rate. The lowest proportion of responses was from households not receiving a service from an RSL. However, this may be partly explained by the fact that some of the households receiving a survey may have been private tenancies.

2.3 The purpose of the survey was to map factoring arrangements within the area in terms of identifying the number of property managers providing services. It was also used to gather quantitative information on the services provided and charges levied, together with qualitative feedback on satisfaction with current arrangements and complaints resolution. A copy of the survey is attached as Appendix 1.

2.4 The survey was supplemented by two public events, which provided an opportunity for owners to discuss their experiences of factoring services in more depth. Both were publicised on the community website and through posters that were displayed in public places and in local businesses throughout the Dennistoun area. A total of 14 people participated in the public events.

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2.5 Property managers identified through the survey as providing a service in Dennistoun were contacted to ascertain the number of properties they provided a service to in the area. Information was collected on the scope of services provided, how complaints were addressed and attitudes towards accreditation. In addition to the two RSLs providing a factoring service in the area, 13 private factors were identified. Five agreed to participate in the study either by way of interview or responding to written questions. Of the remaining eight, one declined and the remainder failed to respond to correspondence and telephone messages.

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3. The Dennistoun Ward

3.1 The Glasgow Dennistoun ward was selected on the basis that it represented an inner urban residential area where the property type was predominately flatted, with recently developed as well as older property. The ward lies to the east of High Street, with its southern and eastern boundary following the railway line from High Street station to Onslow Drive. Its northern boundary runs along Onslow Drive and Broompark Drive to Castle Street.

3.2 The 2001 census identified that there were some 3,654 flatted properties within Dennistoun. Of these, 2,027 (55%) were in private ownership and 1,627 (45%) were owned by RSLs. At 1 April 2006 Glasgow City Council estimates indicate that there were some 4,033 flatted properties within Dennistoun. Of these, 2,376 (59%) were in private ownership and 1,657 (40%) were owned by RSLs. Council tax estimates suggest that, of the 2,376 privately owned properties, 708 were in the private rented sector. While these latter figures are estimates, they provide a good indication of the overall trends.

Table 3.1: Change in number & tenure of flatted accommodation in Dennistoun 2001-2006 2001 2006 Percentage _Change Owner occupied 1,494 1,668 +12% Private rented 533 708 +32% Social rented 1,627 1,657 +2% Total 3,654 4,033 +11%

Source: 2001 Census & Glasgow City Council Tax Estimates, 2006

3.3 The growth in flatted accommodation since 2001 is largely accounted for by a single large development of some 253 flats at ‘Dennistoun Village’ between Finlay Drive and Whitehill Street.

3.4 While the number of owner-occupied properties has increased in proportion to the overall increase in flatted accommodation, the change in the size of the private rented sector is significant. Over a five-year period, the proportion of flatted accommodation in the sector has increased by nearly one-third, reflecting the growing attraction of the area to the buy-to-let market.

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4. Mapping of Property

Management Services

4.1 Although information is available on the number of privately owned flatted properties in the area, there is no empirical source of the number of buildings that have common and shared parts. In order to make an estimate, we have assumed that there is an average of eight flats per close within pre-1919 buildings where there is no social rented sector involvement. This would suggest there are around 194 pre-1919 tenement buildings. A further 42 privately owned post-1919 buildings with flatted accommodation have been identified (with varying numbers of flats in each building) based on visual inspections and agents’ marketing information.

4.2 We have identified two RSLs with social rented housing in the area, both of whom provide a factoring service to owners in buildings where they have (or have had) an interest. One currently factors 190 flats in 98 buildings and the other an estimated 201 flats in 100 buildings.

4.3 We therefore estimate that there are in the order of 434 buildings in Dennistoun that have common and shared parts. For the purposes of the study, we have assumed that each of these buildings has some form of property management arrangement in place. We have sought to identify what these arrangements are, based on survey returns and contact with property managers.

4.4 RSL property is located to the south of Duke Street and within the north-western quadrant of the Dennistoun ward.

4.5 Private sector property management companies are primarily providing services in the area to the south of Onslow Drive and north of Duke Street, to the east of Westercraigs Street and west from Cumbernauld Road. There are also a small number of privately factored properties on Bellgrove Street. We have been able to identify 13 private property managers providing services to 108 buildings.

4.6 As can be seen in Table 4.1 we have been able to identify 70 per cent of the estimated total number of factoring arrangements. The two RSLs dominate the market, accounting for nearly 65 per cent of the identified market. However, these figures are slightly distorted by the fact that, of the 30 per cent of buildings for which no factoring arrangements have been identified, all are presumed to receive a service from the private sector or self-factor.

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Table 4.1 Profile of factoring arrangements in Dennistoun, ODS 2007

Factor Number of Buildings _Factored % of Buildings _Factored

RSL Factor 1 100* 32.7% RSL Factor 2 98 32.0% Private Factor A 43 14.1% Private Factor B 15 4.9% Private Factor C 12 3.9% Private Factor D 9 2.9% Private Factor E 7 2.3% Private Factor F 4 1.3% Private Factor G 3 1.0% Private Factor H 3 1.0% Private Factor I 2 0.7% Private Factor J 2 0.7% Private Factor K 1 0.3% Private Factor L 1 0.3% Private Factor M 1 0.3% Self-Factor 5 1.6%

No. of buildings with factors identified 306 100%

Estimated total number of buildings 434

Percentage of factors identified 70%

*estimate

4.7 The dominance of two RSLs providing factoring services illustrates two situations that will be common in many residential areas in Glasgow: firstly, management arrangements that have been put in place where housing stock formerly in the social rented sector has been sold under the Right to Buy; secondly, where pre-1919 property has been subject to Housing Action Area activity which has been co-ordinated by an RSL. In many cases this will have resulted in the RSL acquiring a majority interest in a building and taking over factoring responsibilities from a private factor. This latter set of circumstances is likely to be replicated within many inner urban areas of Glasgow.

4.8 Our ability to identify only 46 per cent of factoring arrangements in buildings that are presumed to receive a service from the private sector or self-factor was constrained by the difficulty of engaging with private sector property managers. Of the 13 companies identified, only five agreed to participate. The remainder either failed to respond to correspondence or declined to become involved. However, of those that did contribute only two were willing to indicate the numbers of buildings they managed in the area.

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4.9 Based on the information collected of private sector activity, one factor appears to have a greater presence than the remainder. However, they were one of the two that provided information on the number of properties they manage. The focus of their involvement primarily relates to new build properties.

4.10 While the majority of private factors identified are long established businesses, it is also apparent that there are some more recently established companies operating in the area. In one case it would appear that a private letting agent is also providing factoring services. From the limited information available, it seems that they are taking on this service as they (or their clients) obtain a majority interest in a building. This suggests that, to a lesser extent, the private rented sector may be operating in a similar way to social landlords in taking on factoring where they have a majority interest in the property. Given the increasing size of the sector referred to in Section 3 this could have relevance for the future.

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5. The Nature of Services and Charges

5.1 We sought to identify the nature of services offered by factors and the administrative charges levied. Respondents to our survey identified a range of services outlined in Table 5.1.

Table 5.1: Services received from factors

Service No. of Respondents _{Receiving Service} _{Receiving Service}%of Respondents

Common repairs 121 100%

Buildings insurance 98 76%

Stair cleaning 75 58%

Contents insurance 14 10%

Internal repairs to property 14 10%

Other – primarily gardening &

backcourt maintenance 32 25%

5.2 While all indicated that they received a common repairs service, only around three-quarters indicated that their factor provided building insurance. However, it was clear from the discussion at the public meetings that there is confusion about insurance provided by the factor and (where applicable) buildings insurance cover taken out as part of an owners’ mortgage arrangements. It was also apparent that there was a lack of clarity over the nature of the cover. A typical example of the ambiguities is illustrated by one comment posted on the Dennistoun website.

Oh, where to start with factors!!! My current factors are charging me for buildings insurance and I have just recently found out that they have only insured my property for £8,000 when, in fact, it is worth more than 10 times that amount. I have enquired with the insurance company and they have advised me that I do not have to take out buildings insurance with them through the factors, and informed me that I could cancel the policy and go with another insurer. However, when I enquire with the factor they advise the buildings insurance must be done through themselves. Can you advise me how to resolve this situation to the best outcome?

Comment posted on Dennistoun online

5.3 Increasingly a range of additional services are being provided by factors, including stair cleaning and ground maintenance. These appear to be more prevalent in new build properties and buildings receiving a service from RSL factors. At least one RSL factor is also offering contents insurance.

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5.4 The administrative cost of services varies between factors. RSL 1 currently charges an annual fee of £76 (plus VAT) for a tenemental property compared to £90 charged by RSL 2. However, the former charges an average insurance premium of £155 compared to £75 charged by the latter. Information provided by private sector factors suggests a range of charges from £70 to £100 per annum.

5.5 The perception of co-proprietors to the administrative charges levied was somewhat different with many quoting a higher range of figures. This may in part be due to confusion between administrative and other costs such as insurance premiums and repairs.

5.6 When asked their opinion on the cost of service provided, three-fifths of survey respondents felt that they paid too much in administration fees while the remainder felt them to be at an appropriate level.

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6. Service Standards and Communication

6.1 Understanding the level of service that could (and should) reasonably be expected from their factor was a major theme throughout our consultations. As one participant at a public meeting commented ‘factoring is the only service I pay for where I have no idea what I can expect or how to compare the service with that provided by others’.

6.2 In our survey we asked owners about the way in which their factor communicated with them and their satisfaction with the approach adopted.4

As can be seen in Table 6.1 there was a considerable variation in the perception that respondents had in the way in which different service providers communicated with them over repairs.

Table 6.1: Factors communication with owners.

Respondents who indicated

their factor advised: RSL 1 RSL 2

Private

Factors Total

That something is in need of repair 4 (13%) 20 (57%) 26 (41%) 50 (39%) The timescales for undertaking a

repair 4 (13%) 14 (40%) 10 (16%) 28 (22%)

The share of common repairs

costs prior to commencing work 8 (27%) 23 (66%) 30 (48%) 61 (48%

6.3 While one RSL was rated poorly, the other appeared to be much more successful in its communications. This is reflected in the fact that 80 per cent of respondents receiving a service from the latter were satisfied with the quality of communication received (Table 6.2). Dissatisfaction with the quality of communication received from private factors was particularly high.

6.4 Despite the criticisms made about RSL 1 they had distributed a comprehensive owners’ handbook in the past year and circulated a quarterly newsletter to all owners receiving a service. This highlights that, in some cases, far more than written information is required to raise awareness levels amongst co-proprietors.

6.5 At the public events most participants indicated they had little understanding of the service standards they could expect from their factor. As highlighted in Section 1 previous studies have found the lack of any commonly accepted industry standards is a source of confusion to many.

4_{The survey analysis is not intended to draw a conclusion between the services provided by private}

as opposed to RSL factors. However, the sample size is too small to disaggregate responses received from owners receiving services from different private sector factors.

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6.6 One exception however was where residents in a close had decided to engage a factor having self-factored for a number of years and decided to relinquish this role as a result of ownership changes in the building. In appointing the factor, they had established clear service standards and were now seeking to ensure that these were adhered to. It was suggested that achieving this was not always without its difficulties but the fact that residents had been clear about their expectations at the time of appointment provided a benchmark against which to monitor performance.

6.7 Responding to our survey a small number of owners indicated that they had taken on responsibility for factoring themselves as a result of dissatisfaction with the service they had received in the past.

We decided to self-factor because of charges and a lack of accountability on the part of the factor. Decisions were made without consultation.

Comment from survey respondent

Table 6.2: Customer satisfaction with factors.

Respondents who were satisfied with: Satisfied Neither Dissatisfied The quality of communications from their factor

RSL1 5 (17%) 9 (30%) 16 (53%)

RSL 2 28 (80%) 3 (9%) 3 (9%)

Private Factors 8 (13%) 13 (21%) 41 (65%)

Overall 41 (32%) 25 (19%) 60 (47%)

The timescale for undertaking repairs

RSL1 3 (10%) 8 (27%) 14 (47%)

RSL 2 27 (77%) 3 (9%) 2 (6%)

Private Factors 11 (17%) 24 (38%) 26 (41%)

Overall 41 (32%) 35 (27%) 42 (32%)

The cost of undertaking repairs

RSL1 1 (3%) 7 (23%) 16 (53%)

RSL 2 19 (54%) 6 (17%) 7 (20%)

Private Factors 7 (11%) 12 (19%) 39 (62%)

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of time (and having paid a sum of money to the factor towards the work), they pursued the matter to be told, after further delays, the work could not proceed as agreement was still awaited from some of the co-proprietors. Concern was expressed that they no communication had been received from the factor over a period of many months and they would have been none the wiser of the situation if they had not pursued it themselves.

It took the factors three months to reply to a letter I sent them.

It was very difficult to speak to someone who could help. They seem to exist within a culture of non communication.

Comments from survey respondents

6.9 Changes in the housing market were also perceived as contributing to the frustrations of effective repairs. A number of participants at meetings reflected on the fact that, historically, there had been a low turnover of residents, whom they knew and were able to discuss maintenance issues with. While a more active housing market in recent years had resulted in an acceleration in turnover of properties, reducing the opportunity for informal networks to develop, the rise in the private rented market had significantly complicated the issue due to ‘absentee landlords’ being uncontactable by other co-proprietors. Those present were unaware that landlord registration was being introduced as part of the Antisocial Behaviour etc. (Scotland) Act 2004. When explained, they were uncertain whether this would help the situation.

6.10 At the public events a number of people indicated they were being charged excessive amounts for what they perceived to be relatively minor repairs. Further discussion identified two underlying issues. Firstly, concerns were raised about the way in which information was communicated to co-proprietors in bills which were sometimes felt to lack the necessary detail. Secondly, expectations about the costs of maintaining property sometimes appeared to be unrealistic. Contributors included a former tenant who had exercised their Right to Buy and a first-time buyer, neither of whom may have had any previous reference points as to the cost of building maintenance nor had received any advice on the issue prior to becoming home owners.

I was charged for work done on another property.

Work was undertaken without my consent or knowledge and there was no proof of work provided when requested.

Plinth on neighbour’s kitchen unit was broken by the factor’s plumber and it was imposed as a common repair.

Comments in respondents’ surveys

6.11 Generally there was considerable mistrust and suspicion about charges being raised for repair works. The concept of the factor acting as an agent for the co-proprietors is an alien one to many who participated.

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6.12 Four of the five factors who participated were members of the Property Managers Association of Scotland (PMAS) and reported that they followed the service guidelines agreed by the Association. The fifth indicated that they had been a member of PMAS but were no longer and that they followed no particular standards of service provision.

6.13 Limits of authority and timescales for undertaking repairs were generally provided to owners by their factors. However, a number pointed out that timescales for carrying out work were subject to receiving payment from owners in order to finance repairs. This has become increasingly difficult due to the growing number of owners renting their properties. As a result it can take time to contact absent owners and secure payment for repair work to be carried out.

6.14 The issue of social landlords providing factoring services to meet their own objectives was illustrated by comments made by a number of attendees at one of the meetings. Using their majority ownership, close painting was being undertaken on a three-year cycle without prior consultation with other co-proprietors. The cost of this work was then spread over a three-year period and charged in equal instalments as part of quarterly accounts.

6.15 While those receiving a service from this factor felt their properties were being well maintained, they were concerned that the priorities set for building maintenance were the factor’s. As minority proprietors they felt that they did not have a meaningful say in the management. One suggested that owners should be consulted over service issues in the same was as the RSL tenants were understood to be.

6.16 For most owners, their factor was ‘acquired’ with the purchase of their property. However, the survey and the discussion that took place at meetings suggested that incoming owners had not received information regarding management arrangements or standards on taking entry to their property.

Table 6.3: Factoring information provided on change of ownership

Respondents receiving information from

factoring service on acquiring their property Yes No

RSL1 15 (50%) 15 (50%)

RSL 2 29 (83%) 6 (17%)

Private Factors 24 (38%) 38 (60%)

Overall 68 (53%) 59 (47%)

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6.18 This position is at odds with what factors told us about the service they provide. Both RSLs indicated that they offer information to new owner-occupiers on the standards of service they offer, including insurance arrangements.

6.19 All private factors who responded indicated that they sent a letter introducing themselves to new owners along with a brochure that provides details of their standards of service and future planned repairs. Two advised that they provided welcome packs for new owners providing comprehensive details on the role of the property manager, how charges are incurred, details of building insurance and how to process insurance claims.

Complaints Resolution

6.20 Over half of survey respondents indicated that they had complained about the service they received. There appears to be less differentiation between service provider than with some of the other issues explored.

Table 6.4: Complaints made about factoring services

Respondents who have complained about

the service received from their factor Yes No

RSL1 17 (57%) 13 (43%)

RSL 2 14 (40%) 21 (60%)

Private factors 39 (62%) 24 (38%)

Overall 70 (54%) 58 (46%)

6.21 Quality of communication was a significant feature of complaints about RSL 1 and private factors. However, time taken to undertake work, the quality of work and its cost were all issues over which a significant proportion of complaints were made.

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Table 6.5: Nature of complaints made about factoring service

Respondents whose complaint related to: Yes No The quality of communications received

RSL1 8 (47%) 3 (18%)

RSL 2 4 (29%) 0 (0%)

Overall 40 (57%) 7 (10%)

The timescale for undertaking repairs

RSL1 6 (35%) 4 (23%)

RSL 2 3 (21%) 0 (0%)

Overall 25 (36%) 13 (19%)

The quality of work undertaken

RSL1 7 (41%) 4 (23%)

RSL 2 7 (50%) 0 (0%)

Overall 36 (51%) 11 (16%)

The cost of the service

RSL1 7 (41%) 2 (11%)

RSL 2 7 (50%) 1 (7%)

Overall 40 (57%) 9 (13%)

6.22 With the exception of RSL 2, complainants appear to be largely dissatisfied with the way in which complaints have been resolved – and even then one half of complainants are dissatisfied.

Table 6.6: Satisfaction with complaints resolution

Respondents satisfied with complaints resolution Yes No

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6.23 Clearly resolving complaints over issues relating to management services may be complex on occasion with issues relating to timing, specification, quality and cost of work being intertwined. Nevertheless, it is notable that the highest proportion of complaints relate to the quality of communication, an issue totally within the control of factors.

6.24 The public meetings that were held reinforced this view with a number of people highlighting that they had cause to complain in relation to issues such as poor quality repairs and maintenance, excessive bills, no consultation over the need for repairs and repairs not being carried out. However, the issue that concerned participants the greatest was the manner in which complaints were dealt with. Lack of response or slow response to communications was a common theme. Of those participating, none were aware of recourse to a third party.

6.25 In consulting with factors, a clear distinction is to be found in the approach adopted by those in the RSL and private sectors. RSLs are required by their regulator to have a published complaints procedure in place. Any complaint that cannot be resolved internally can be referred by the complainant to the Scottish Public Services Ombudsman.

6.26 Within the private sector a number of the factors operating in Dennistoun belong to the Property Managers Association of Scotland (PMAS), an association of around 38 private property managers throughout Scotland. The PMAS has developed a ‘Code of Practice’ which aims to promote efficient property management among its member organisations. All members of PMAS agree to comply with a Code of Practice which establishes a number of broad standards to which members should adhere, as much as is reasonably possible. All members must include final recourse to the PMAS within their complaints procedure. A copy of the code is attached as Appendix 2.

6.27 The most common complaints indicated by factors were in relation to work not being undertaken, together with the cost and quality of work undertaken. Responsibility for remedying vandalism to communal areas was a further area of concern. A number of factors pointed out that works are often not carried out if there is an outstanding debt owed on a property. Interestingly, the issue of administration was not raised by any consultee.

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7. Knowledge of the Legal Framework

7.1 In our survey we asked owners whether they knew how to appoint or dismiss a factor. Eighty-eight per cent of respondents indicated that they did not know how to do this, highlighting the low understanding of the legal framework in which factoring arrangements and the maintenance of common and shared areas are effected.

7.2 At our meetings the concept of majority agreement being required to undertake works was broadly understood. However, there was less awareness of the legal framework underpinning this, including the existence or role of Deeds of Condition.

7.3 The majority of owners that attended the public meeting did not know the terms and conditions of their contracts with their factor and were therefore unaware of their own responsibilities or what could be expected from the property managers.

An owner asked for a copy of the contract we had and it took seven months for him to get it.

Comment on Dennistoun online

7.4 One owner at a meeting related the process co-proprietors had undergone a number of years ago to dismiss a factor, undertake self-factoring for a period of time and then re-appoint a new factor. While this process interested others present, a number of participants indicated that, in reality, this was not a choice they had, due to properties in their building being in the ownership of private landlords for whom they had no contact details. They therefore felt powerless to institute a change of manager if they wished to and their only realistic option appeared to be ‘to work with who they had’.

7.5 We met no one who was aware of the legislative changes that have been introduced in recent years to strengthen the framework for managing and maintaining property with common and shared parts.

7.6 As highlighted in 6.9 knowledge of the requirement of landlords to register under the terms of the Antisocial Behaviour etc. (Scotland) Act 2004 was also non-existent and those participating in public events were unsure the impact it would have in encouraging non-resident co-proprietors to take a more active role in the maintenance of their property.

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7.8 A number of attendees at the meetings were seeking information and advice as to how to resolve problems they faced regarding the management of common parts. The need for good quality impartial information and advice was a general theme raised regularly in the discussions that took place. While participants understood they could seek legal advice, they felt this was an inappropriate source and would incur costs which many could not afford. Suggestions as to how the situation could be improved included the production of online and published material on the legal and administrative framework within which property management operated (some participants suggested an update of The Tenement Handbook), and a telephone advice line.

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8. Property Managers’ Accreditation Scheme

8.1 In our discussions at public meetings and consultations with factors, we sought views on the establishment of a property managers’ accreditation scheme as proposed by the Housing Improvement Task Force and the subject of a subsequent feasibility study.

8.2 Both RSLs were supportive of the idea in principle. One felt that the establishment of an accreditation scheme was a good idea and would raise industry service standards as well as providing more information and choice to consumers. The benefits of an accreditation scheme were seen as favouring the consumer rather than the property manager. The second RSL we consulted was also keen on the principle but felt that further discussions were required on the establishment of an accreditation scheme and how standards would be adopted prior to committing themselves further.

8.3 Four of the five factors that we spoke to voiced qualified support for the introduction of an accreditation scheme. The general feeling was that it would bring about consistency in service provision and introduce transparency to the industry. One suggested that an accreditation scheme would end householders’ suspicion of property factors.

8.4 However, all stated that their participation would be dependent on its detailed design. In two cases, it was indicated that participation would be dependent on it being implemented by an independent professional body. Concerns were raised by one consultee that if the scheme was not managed correctly it would simply add another level of bureaucracy upon factors and not result in any improvement in service standards.

8.5 There was only outright opposition to the introduction of an accreditation scheme from one factor who responded. Their view was that the current role of the PMAS provided sufficient monitoring of service standards and further regulation was unnecessary.

8.6 The attendees at the public events were supportive of the concept of an accreditation scheme for property managers being established. It was felt that such a scheme would bring greater transparency to service standards and allow consumers to make more informed choices when selecting a factor.

8.7 However, accreditation was generally viewed as a ‘first step’ and a number of participants argued for more robust regulation of property management services. Some suggested that a system of licensing should be introduced which would provide a statutory framework against which standards could

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9. Conclusions

9.1 The study provides an insight into the perceptions of a relatively small group of owners in the Dennistoun area. Given the numbers participating and the fact that those who have had or are experiencing difficulties may be more motivated to contribute, some caution must be exercised in interpreting the response.

9.2 Nevertheless, they reinforce the findings of work undertaken elsewhere to suggest that, for many owners, the maintenance of property with common and shared parts, is an unsatisfactory experience.

9.3 While considerable attention has been paid to strengthening the legal framework for buildings with common and shared parts in recent years, consumer awareness appears to be low. Even if more widely promoted, it would not improve the position for many where a legal framework for managing the maintenance of common parts already exists.

9.4 The concept of the factor being an agent acting on behalf of the co-proprietors is not a true reflection of the relationship for many owners who responded to us in Dennistoun. Majority ownership of a building with common and shared parts by a single (social or private rented sector) landlord or their agent often make it difficult for resident owners to exercise their role as employer in a meaningful way.

9.5 The reality for many owners who wish to take an active interest in the management of the common parts of their property is that the relationship with their agent is not an equal one and their option of exercising any right of altering the terms of engagement may be significantly constrained. In this respect, the market operates in a restricted way and places a significant onus on a framework being in place that offers a degree of protection to individual consumers.

9.6 Given the number of factors operating in the Dennistoun area that did not participate in the study it is not possible to provide a comprehensive overview of the service standards adopted. However, it is clear that many consumers perceive there to be a lack of clarity about them, and what they can reasonably expect by way of a service from their factor.

9.7 The need for improved communication was a recurring theme that appears to be at the heart of many of the criticisms levelled at factors. It is the issue that most owners appear to be dissatisfied with and would be central to any improvements in service standards.

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9.8 The way in which the market operates, coupled with the apparent lack of confidence of a significant proportion of owners participating, reinforces the case for the introduction of an accreditation scheme. The way in which it is designed would clearly have a significant bearing on its success. However, many factors also recognise the role it could play in improving the relationship with their customers and their image in the marketplace. It would offer a benchmark against which owners could exercise objective judgements of quality of service received.

9.9 However, the issue is not simply about factors’ performance. It is clear that owners are not always sufficiently aware of their responsibilities. There is a need for greater awareness-raising in this area as part of a coherent framework of measures to encourage better management regimes in property with common and shared parts.

9.10 Independent information and advice needs to extend to supporting consumers understand the legal and administrative framework, deal with general queries and provide advice when service standards are felt to be unsatisfactory.

9.11 Currently no agency is taking on this role. However, the introduction of the Housing (Scotland) Act 2006 provides for local authorities or their agents to introduce Schemes of Assistance. It is anticipated that these will include information and advice, and can extend to maintenance regimes. The evidence from Dennistoun suggests that there would be value in Glasgow City Council considering how this could be appropriately addressed when considering the implementation of the Act.

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Appendix 2 – Property Managers

Association Scotland Ltd. Code of Practice

All members of Property Managers Association Scotland Limited (‘the Association’) undertake to comply with the following Code of Practice which has been drawn up by the Association to promote and foster the efficient management of all classes of heritable property and the highest standards of practice of Property Managers.

1. Members of the Association have a general duty of fair dealing towards clients, past and present, fellow Members of the Association and the general public.

2. Members of the Association will where possible have regard to any Deed of Conditions or title conditions relating to the property managed.

3. In carrying out their duties, Members of the Association will use all reasonable endeavours to ensure that legal and statutory requirements are observed and acted upon.

4. Unless Contractors are nominated by clients, Members will use all reasonable endeavours to order repairs and other works from Contractors which either to the best of the Members’ knowledge and belief or in his experience are reliable and capable of completing the works satisfactorily and at a reasonable cost.

5. Members shall use all reasonable endeavours to respond promptly to complaints from clients of unsatisfactory work.

6. Members shall use all reasonable endeavours to ensure that payments are made by or on behalf of clients within the time limits specified for payment of such sums and in particular will use all reasonable endeavours to ensure that payment of ground burdens does not fall into arrears.

7. Members shall advise clients of any material change in the terms and conditions of business applicable to the Members appointment in advance of the date of implementation of such change.

8. Members shall inform clients in writing of any shareholding or financial interest held by that member firm in any company, firm or person whose services it engages for the provision of repairs or other works to the property managed on each occasion the member engages such company, firm or person.

9. Members shall use all reasonable endeavours to employ the highest standards of management in carrying out their duties and shall seek to promote the highest standards of management throughout the profession of Property Managers by encouraging continuing professional and vocational education opportunities among their staff.

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10. Members shall uphold this Code of Practice and co-operate with fellow Members and the Council of the Association to enforce decisions on any matter arising from its application. Members shall procure that their principals, partners, directors, associates and employees act in a manner consistent with this code.

11. Members shall not engage in any practice nor be seen to conduct him or herself in any manner which is considered in the reasonable opinion of the Council of the Association to be detrimental to the reputation of the Association or the reputation of the Property Manager’s profession.

12. Members are expected to arrange an adequate level of professional indemnity insurance, the cost of which will be borne by the Member.

13. Members will have a complaints procedure in respect of which complaints from clients about the Member will be dealt with in accordance with that procedure and if an adequate remedy is not available to the client, recourse can be taken by the client to the Property Managers Association Scotland Limited.

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www.scotconsumer.org.uk

Royal Exchange House 100 Queen Street Glasgow G1 3DN Telephone 0141 226 5261 Facsimile 0141 221 0731 www.scotconsumer.org.uk