Revealed: the great property factor scandal

[u/TimesandSundayTimes]

https://www.thetimes.com/uk/scotland/article/revealed-homeowners-face-big-bills-from-factors-they-cant-hold-to-account-cqj888hc5?utm_source=reddit&utm_campaign=scotland&utm_medium=story&utm_content=branded

One year after Kristian Stevenson bought his first flat, the 34-year-old received an unexpected demand for £4,000.

The property factor who looks after the roof, garden and maintenance of his tenement flat in Cessnock, Glasgow, claimed that he was liable for a debt owed by somebody else in the building.

The letter from 91BC, which manages almost 4,430 properties, said: “Our role as factor is to facilitate communal works and charges relating to your building. We have exhausted our debt collection process and as a last resort, we must reapportion this debt to you.”

The £16,000 bill for the building, which Stevenson said was run up before he purchased the two-bed property, had never been mentioned in conveyancing and he was liable to pay £4,200. Nothing existed in the title deeds to suggest he would be culpable for somebody else’s debt. The factor said the deeds were outdated and he must pay the bill according to their written statement of service, which he said he did not receive until two years after moving into the property he bought for £180,000.

The statement of service did state that homeowners were jointly liable for debt, even if they did not cause this themselves, as is the case for most property factor contracts.

Stevenson, a freelance TV and film production co-ordinator, pays about £130 a month to 91BC and said the “absurdly high bill” included £6,000 in late payment fees and legal fees the property factor paid when chasing the other owner’s debt.

“If I was to pay this off it would wipe out any savings I’ve rebuilt,” he said. “A substantial bill without notice, consultation or even a real explanation is both unethical and a poor business strategy.

“Dealing with a massive sum of money like that puts significantly a lot of pressure on me.”

There are hundreds of thousands of property owners like Stevenson across Scotland collectively paying tens of millions of pounds each year to factors who are almost impossible to hold to account.

A long multi-step complaints process, which requires homeowners to compile evidence and documents and often take legal advice, has been blamed for poor regulation and accountability of property factors.

[u/Alasdair91]

We have just taken our factor (Newton Property Management) to Court. Absolute ghouls who charge us roughly £80,000/pa for fuck all.

In the North I know off the top of my head that James Gibbs, HHA, FirstPort and Taylor & Martin are all rip-off merchants who provide abysmal service.

[u/abz_eng → u/Alasdair91]

James Gibbs,

We ditched them last March and still haven't had a full and final bill

They are claiming we first have to pay them for the non payers then we can individually sue each non payer for the £2 or less they owe

Getting hold of anyone is impossible

FirstPort

were Peverel and oh yes they were looking to expand ya dee dah etc etc except the development was aging and they were actually going to have to oversee communal repairs - they dumped us and refused to do any work that was concerning work that would be undertaken after the contract finished

[u/Alasdair91 → u/abz_eng]

Newton contracted paintworks for £13,500 to Bell Group. They did an atrocious job, charged owners £750 each and it still hasn’t been remedied 3 years later. We also have outstanding roofing issues, grounds issues, drainage issues, pest issues, waste issues, outstanding complaints… the list goes on.

The court system is so backed up because, surprise surprise, all factors are shite. The Government won’t intervene unless factors break the PFEOs the Court serves them. But owners can’t get PFEOs served because the Court is a mess. Catch 22. Meanwhile, factors get to keep taking money and doing fuck all.

[u/ElJaffacakeo22 → u/Alasdair91]

A Factor cannot contract works, only the homeowners can. Sounds more likely you have issues with your neighbours

[u/Alasdair91 → u/ElJaffacakeo22]

Our factor previously contracted all work in our development and had a policy of “if we don’t hear from you within 5 days to say no we go ahead with it”. Which obviously works in their favour as mail takes time to arrive and a whole bunch of owners here are absentee/rich so don’t care. We also know from speaking to people that they also don’t look at their mail or invoices so stuff just happens 🤦‍♂️

Luckily we set up an owners group, but getting anything done is like getting blood from a stone with Newton involved - and they will only ever find one quote that costs the earth. It’s a constant fight and pushback with them. It’s taken us almost 2 years to get a bin light changed (via the Council) and to get Newton to finally put together 98% of a set of access keys for the development. It’s beyond a joke at this point.

[u/Creative-Cherry3374 → u/abz_eng]

Oh yes, I used to live in a development they were in charge of. We were getting communal electricity bills for houses (not flats) where there was no communal electricity. Eventually got them to rescind the bill, with (fake sounding apologies), following threats of legal action, only to receive another bill for the same a month later. And so it goes on. And on.

Trying to get an entire housing development to agree to changing a factor is an effort.

All they do is arrange grass cutting and bin collections. God knows why we didn't get money off our council tax as the council didn't want to collect the bins when planning permission was given for the development. Buildings insurance too (very expensive) and supposed communal repairs. I'm glad I sold up because the houses were coming up to about 15 years old, and I could imagine them inventing "essential" roof repairs and so on for their cronies.

[u/Alasdair91 → u/Creative-Cherry3374]

Newton has overseen (and I use that word lightly because they’ve all but ignored it) an absolute disaster unfold with our communal electricity billing. We are currently £8,449 in alleged debt to various electricity companies (despite assurances we only had 1) and Newton cannot account for why this is the case. Upon further inspection, one stairwell has never paid for electricity and some were being charged £1,250 a quarter for electricity - to power 8 emergency lights and a fire alarm system. My stairwell apparently uses as much electricity per month as my 2-bed flat where we both work from home; Newton don’t seem to think that’s an issue worth investigating…

[u/Creative-Cherry3374 → u/Alasdair91]

We think the communal electricity charge actually relates to the social housing part of the development (which is supposed to be managed entirely separately). It should be an easy enough question to answer, since none of us have any communal electricity, but James Gibb seem to have run up thousands of bills for it.

We don't have any communal stairwells or emergency lighting. All the houses have their own front doors.

It seems to be quite a nice little earner for them. How they think they can get away with such thieving is a mystery, but they are clearly confident enough they will never be brought to account.

[u/Alasdair91 → u/Creative-Cherry3374]

They get away with it because 1) the law is written to benefit them, 2) the First Tier Tribunal system is in undated with complaints and can’t move things forward at pace and 3) the Scottish Government ultimately won’t intervene (we have this in writing from the Office of the Housing Minister).

[u/Creative-Cherry3374 → u/Alasdair91]

Was a reason given by the Housing Minister for that?

Other that too many snouts in the trough?

[u/Alasdair91 → u/Creative-Cherry3374]

They told us that:

“The Scottish Government is unable to intervene in disputes between parties as the Tribunal is the appropriate route of redress that is available to homeowners who have a dispute with a property factor. It is right that that the justice system remains independent of the Government.”

The issue is that the system isn’t working and ultimately, the Scottish Government and Ministers make the laws and can intervene (which a FOI from 2022 we found shows they have done in the past), but instead they just sit back and ignore the problem. Upon raising this situation and need for further protections, they said:

“With regards to your final question, there are no legislative or regulatory reforms to provide homeowners with greater protection against negligent property factors under consideration at this time.”

Basically, good luck losers.

[u/Creative-Cherry3374 → u/Alasdair91]

Amazing how all those MSP's managed to get legislation passed for their special interests in the property market, particularly rental properties (and have mainly succeeded in making rents more expensive and in the creation of super-landlords and gigantic Edinburgh HMOs (50 person or more) which didn't exist before the raft of legislation.

But its all "oh no? Legislation? Never heard of such a thing. You expect us to pass legislation to solve a growing problem in a particular market? Thats not what we are here for!"

They do like to control people's lives, don't they? The peasants must not be allowed too much freedom.