As you may know, property factoring has been regulated since 2012 and all factors must adhere to the Property Factor Code of Conduct introduced as part of the Property Factors (Scotland) Act 2011.
The Code of Conduct is due to be revised following a lengthy consultation process carried out by the Scottish Government. The revised Code was laid before the Scottish Parliament last month and, subject to Parliamentary approval, will come into force in August of this year.
Nearer the time, we will require to revisit our own Written Statement of Services (WSS) to ensure compliance but, in the meantime, we thought it useful to highlight some of the key changes that will come with the revised code:
- “Overarching Standards of Practice” are added. These are various standards to which Factors must adhere when carrying out their work, including compliance with all relevant legislation and remaining honest, open and transparent in all dealings with homeowners.
- Any substantial changes to a WSS must be provided to homeowners at the earliest opportunity within a 3–month period. The current Code allows changes to be provided within a 1–year period.
- There is now explicit references to a Factor’s obligation to comply with Data Protection Legislation when handling personal data of clients.
- Compliance with anti-money laundering legislation and guidance is brought into a Factor’s financial obligations. The current Code is silent on this.
- A Factor must treat customers in default/arrears: “fairly, with forbearance and due consideration.” A Factor’s debt recovery procedure should advise customers that independent, free, debt advice organisations are available to them.
- Factors are to provide an annual insurance statement to each homeowners or a statement within 3 months following a change in insurance provider.
- The Revised Code also introduces a new, six page, glossary of terms, again signalling an effort to strengthen the clarity of the code.
If you have any further questions about the new Code of Conduct and how any of the changes may affect you, please do not hesitate to get in contact.