by a staff writer© The Herald
Originally published: 17.06.2008

OFT investigators will examine whether homeowners have enough choice in selecting a factor and the quality and costs of the services provided. They will also examine what redress, if any, the client has when things go wrong.

The probe has been launched under the 2002 Enterprise Act which allows a market-wide consideration of both the competition and consumer issues. It is due to conclude by the end of the year.

The umbrella body for private-sector factors, the Property Managers Association Scotland (PMAS), said it would "be happy to take part in the proposed study by the OFT" and said it was supportive of regulation or accreditation in the industry.

A particularly Scottish industry, factors usually organise repairs, maintenance and improvements of roofs, staircases, entrances and gardens, and the administration of common buildings insurance.

They are mostly found in, but not exclusive to, tenements and other collective residential properties and can be private businesses, a registered social landlord or a local authority. More than one-third of all homes in Scotland are in shared buildings such as multi-storey flats, "four in a block", or tenements, with the figure rising to more than 96% in Glasgow.

As part of the investigation the OFT will gather and analyse evidence from homeowners, suppliers operating in the sector, and other key parties as well as co-operation with the Scottish Government and the SCC.

Glasgow-based solicitor Mike Dailly, who has been working with Patricia Ferguson MSP in her quest for a law tightening property management, said he was aware of factors who had turned clients into debtors facing bankruptcy.

He said: "For many it's a racket in that they're operating in an unregulated market. I can think of no other privileged position, where someone puts their most valuable asset into the hands of someone you wouldn't send to the shop."

Ms Ferguson, Labour MSP for Maryhill, said she would await the outcome of the investigation before pushing ahead with her bill which would force property management firms to register before they can operate and establish a system of dispute resolution between homeowners and factors to avoid court.

She added: "The problem too often is factors forget they are working for the client. The response to our own consultation would indicate the need for very real change in the way factors operate."

Jamie Millar, of the PMAS, whose members manage more than 150,000 individual residential units, said: "We have met the Scottish Consumer Council and the OFT to discuss the property management industry and were aware that OFT was taking an interest in this area."

He added that owners could terminate factor contracts and that complaints to PMAS run at around 200 per year, most of which are mediated.