There have been calls for formal regulation of the Property Management industry for as long as I can remember but successive governments have ignored these calls on the basis that while there are a few rogue operators in any sector, the vast majority of property management businesses provide a good standard of service to residents. Further, the worst excesses of property managers should arguably be avoided by proper use by the tenants of the existing statutory safeguards, mainly found in the Landlord and Tenant Act 1985.
The Property Factors (Scotland) Act 2011 has changed all that but as the title suggests, only inScotland. This legislation will result in a register of property management businesses and will create a new offence of operating as a property factor (ie property manager) without the correct registration.
In order to achieve registration a business/individual will have to pass a “fit and proper person” test, which is designed to exclude those with criminal convictions for crimes involving dishonesty/violence/drugs, those who have been found to practice unlawful discrimination or contravened any provision of the law relating to tenements, property or debt.
The question is, will this form of regulatory regime work? One potential criticism is that in reality, the fit and proper person test will only operate to exclude a small minority from the industry. Further, there is not express provision for those who are persistently found to have been overcharging or contravening lease provisions either through complaints or through LVT findings (or the Scottish equivalent) to be sanctioned. However, there can be little argument that this is a step in the right direction for residents provided it is properly enforced by the authorities. The question is when will England and Wales see similar steps introduced.