Court clarifies definition of property factor

A recent appeal case at the Court of Session has helped to clarify, for the first time, who is classed as a property factor under the Property Factors Act. The Act was introduced in 2011 and requires property factors to register with the Scottish Government and adhere to a statutory code of conduct.

The Act defines a property factor as a person who, in the course of that person’s business, manages the common parts of land owned by two or more other persons and used to any extent for residential purposes. Previously landlords and letting agents had been advised to exercise caution when considering whether to arrange common repairs as it could have been considered that they were managing common parts in the course of their business.

The Court of Session decision, which can be read here, clarifies that the term “in the course of their business” only applies to those who are running a property factoring business. The decision is binding on future First-tier Tribunal and Upper Tribunal cases. Therefore landlords and letting agents can now arrange common repairs to buildings in which they own or manage properties provided they don’t operate a property factoring business. It was considered important in the Court of Session case that the landlord arranging common repairs was not charging other flat owners for their service; they were only recovering sums paid to contractors for their work.

For further information on the Property Factors Act see our factsheet here, (members please remember to log in to access our documents).

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