Page last updated at 12:51 GMT, Thursday, 12 February 2009

'Raw deal' from property factors

Generic tenement
About 135,000 people in Scotland rely on property factors

Thousands of people feel they are getting a raw deal from Scotland's property factors, a report has found.

The Office of Fair Trading (OFT) study said one in five people were not satisfied with the level of service they received.

About 135,000 people who live in flats rely on management firms to carry out maintenance work on their blocks.

The OFT called on the Scottish Government to set up an advice service to help resolve difficulties.

The research found there was little competition among property managers, that people often did not know their rights, and there were limited options for consumers when things went wrong.

OFT chief executive John Fingleton said: "This is a market that is not working well for many homeowners in Scotland.

This is a market that does not serve its consumers well
Jennifer Wallace
Consumer Focus Scotland

"People often have little or no understanding about their rights, households rarely switch factors, suppliers do not seem to be actively competing with each other and the options for consumers when things go wrong are very limited.

"The OFT's recommendations for change should be to the benefit of many Scottish consumers."

Factors are responsible for the management of shared areas such as roofs, stairwells and gardens in tenement buildings.

The OFT launched its study following concerns highlighted by watchdog Consumer Focus Scotland that homeowners and tenants were getting a raw deal.

It considered the quality and cost of factors, how much choice and information was available to consumers and what their options were when things went wrong.

The findings showed that two thirds of those who had made a complaint about their management firm were dissatisfied with the way their complaint was handled.

Similar problems were found in the market for land maintenance companies, with consumers finding it hard to change suppliers when ownership of open spaces had been transferred to private companies.

Consumer Focus Scotland has agreed to assist homeowners to bring forward a test case applying legislation which allows owners to switch.

If this proves to be unworkable then the government should review the legislation, the OFT said.

'External regulation'

Ministers announced a clampdown on "cowboy" property managers last June.

The Property Managers Association of Scotland and the Scottish Federation of Housing Associations welcomed the setting up of an accreditation service for managers meeting high service levels and offering clear accounting and billing.

The OFT said that if moves to ensure better accountability of property managers failed, a statutory scheme should be introduced.

Jennifer Wallace, of Consumer Focus Scotland, said: "The findings of the OFT study reinforce what we have long suspected - that this is a market that does not serve its consumers well.

"The patience of consumers is wearing thin.

"If the industry does not develop self-regulation including an independent complaint system then we will, with the support of the OFT, move to external regulation of the market."

Peverel Scotland, which managed 10,000 properties across Scotland, welcomed the report, but said it did not go far enough.

A spokesman said: "We feel that more rigorous regulation is required to ensure more than mere lip service is paid to OFT's good intentions."

The OFT said anyone wanting to complain about their factor service should contact either Consumer Direct or their local Citizens Advice Bureau.

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