SUBMISSION FROM GREENBELT GROUP LIMITED

Transcription

1 SUBMISSION FROM GREENBELT GROUP LIMITED 1. Greenbelt Group Limited, (No.SC192378) of Abbotsford House, Abbotsford Place, Glasgow G5 9SS, (GGL) invites the Committee to have regard to the following submissions when considering the Property Factors (Scotland) Bill ("the Bill"). Introduction 2. GGL was established in 1999, following consultation with Scottish Natural Heritage and Scottish Enterprise, to own, manage and maintain open spaces in new housing developments. It is the UK market leader in residential open space land management and maintenance providing services to more than 30,000 residential units. 3. GGL carries out annual maintenance of landscapes (soft and hard), play areas, drainage (SUDS and water features), woodlands (young and mature), public art features, access and lighting and also inspections as required under current European legislation. 4. GGL offers developers and planners a distinct alternative to traditional property factoring arrangements for long term management of open space land, enabling the transfer of land ownership to a single party along with the responsibilities associated with land ownership, there being obvious benefits of such a clear and simple land transfer. SUBMISSIONS Meaning of Property Factor 5. The purpose of the Bill is to establish a system of statutory registration for all property factors and an alternative means of resolving factoring disputes to the courts. 6. A clear distinction must be made between a factor's role and status and the role and status of bodies such as GGL owning and managing or maintaining open space where the title deeds (by inclusion of real burdens) provide a legal obligation for the body to manage and maintain with a reciprocal obligation placed on home owners to pay for the cost of this management and maintenance. These two mechanisms are entirely different. Factoring is based on a common ownership model whilst the mechanism used by GGL and others is based on the single ownership model. A factor is one who administers the property of others. GGL is not a property factor. It is administering its own land -something that any owner can do -and not land which is owned in common by others. 7. There is often a fundamental failure on the part of homeowners to understand this distinction which can result in misplaced complaints and misunderstandings. The Bill in its' present form fails to recognise this distinction. As a result it is in GGL's view fundamentally flawed. 8. Further, to refer to companies operating the model such as Greenbelt as mere land maintenance companies does not in GGL's view adequately identify the

2 nature of such companies' relationship with the land. A land maintenance company could be an organisation which undertakes short term garden or open space maintenance work on the land of others. Companies such as Greenbelt are land owners, with rights and responsibilities far removed from those of a maintenance company as described above. 9. The legislation which regulates land ownership and the enforceability of real burdens is the Title Conditions (Scotland) Act 2003 ("the 2003 Act"), and the proposed Bill, in attempting to include within its' scope "landowning maintenance companies" is inappropriate. In doing so it potentially undermines, confuses and compromises the operation of the 2003 Act, which is already a complex piece of legislation, and indeed other existing legislation which regulates land ownership. 10. Therefore, the Committee should consider the interaction between section 2 of the Bill and the Title Conditions (Scotland) Act GGL's position is that section 2 (1) (c) should be removed from the scope of the Bill. Application for registration 11. Section 3 of the Bill seeks to oblige the applicant to disclose its client and property portfolio. 12. GGL takes care to ensure that the personal data held on its' customers is handled carefully, kept secure, not released in an inappropriate manner, and processed in accordance with the data protection principles. 13. The Bill proposals place a potentially very onerous obligation on the applicant and the practical effect is to place information which is confidential between the property factor and its' customers into the public domain. On that basis GGL would strongly oppose this. GGL also seeks clarification on whether the purpose of this is to assess the extent of the portfolio for fixing the registration fees in which case it is possible to achieve this much less intrusively, or it seeks to serve some other purpose 14. Further, section 3 seeks to oblige the applicant to disclose the details of any other person who is or is to be directly concerned with the control or governance of the property factor (including any person who owns 25% or more of the equity in a business which is a property factor). In the case of a Company operating as a factor the provision of this type of information is regulated by the provisions of the Companies Acts. 15. Section 3 provides that an application must be signed by the responsible person as therein defined. The Bill proposes several new offences in relation to factors who operate while unregistered, or whose standards fall below those expected by the proposed new national, statutory 'code of conduct'. In the case of a Company operating as a factor, GGL's position is that the Company should have the power to delegate this authority and that it is appropriate for the responsible person to be a Director whose intromissions are regulated by the Companies Acts. 16. Again, therefore, the Committee should consider the interaction between section 3 of the Bill and the Companies Acts.

3 Section 4: Considerations 17. Section 5 (2) provides that Material falls within this subsection if the responsible person has practised unlawful discrimination. GGL's position is that this should be a consideration only where a court or tribunal (or other appropriate body at law) has issued a ruling against the responsible person. 18. A responsible person who is a Company Director will also require to satisfy the provisions of the Companies Acts. Notice of Potential Liability ("NOPL") 19. Section 9 (2) (c) provides that a de-registered factor is ineligible to lodge a NOPL. However a de-registered factor should at law be able to pursue recovery of costs legitimately incurred prior to de-registration. Code of Conduct 20. Section 13 envisages the introduction of a Code of Conduct for factors. In its' present wording, the Bill gives a huge discretion to the Scottish Ministers. They are to "consult" with such bodies as they consider appropriate. Having done so, they "may" amend the draft. In terms of section 4, a responsible person is to demonstrate "reasonable compliance" with the Code of Conduct. The Code requires to be clear and unequivocal in its' terms so that it is capable of strict interpretation as to what constitutes compliance and non compliance. 21. Given that the Code is fundamental to the operation of the Bill, which seeks to introduce a statutory system of registration of property factors, GGL's position is that it is inappropriate for the Bill to be passed until such time as the draft Code is available for consideration together with the Bill. Financial Impact 22. The Bill proposals would result in new administrative costs being incurred by Scottish Ministers. Property factors would incur costs in fees for registration and in ensuring compliance with the proposed code of conduct. There will also be costs incurred in the dispute resolution procedure. There are presently no indicators as to the level of such costs per case or the number of cases likely to be referred. Property factors would presumably seek to pass these costs to consumers through increased charges. Dispute resolution 23. Section 16 provides that the homeowner housing panel can determine whether there has been reasonable compliance with the new code of conduct ("conduct") and can also determine whether the property factor has failed to comply with its' contract with the homeowners ("service"). 24. The range of issues for the Panel to consider could be very broad. The Committee should therefore consider carefully the eligibility of an application in order not to put in place (in good faith) a dispute resolution system capable of opening the floodgates to abuse. 25. To be eligible an application should meet certain criteria (to be laid down by the Bill) and an applicant must be a person eligible to make the application. Criteria

4 may of course be slightly different depending on the type of application and whether it relates to conduct or service. 26. It is always best to investigate complaints as soon as possible after the event, when memories are fresh and paperwork is intact and available. GGL therefore suggests that one of the criteria should be that the Panel determines applications made within only a specified time limit of the business being completed or the matter coming to the applicant's attention. 27. Further the application must have been considered by the property factor first in terms of their internal complaints procedure. 28. An application must be capable of being investigated and determined and must not be considered if it is "vexatious" (in the legal sense). 29. The Committee should consider whether such a Panel is better placed to make decisions relating to contract law than a court. 30. In its' present wording, the Bill proposes that a property factor may be removed from the register as a result of failure to comply with a property factor enforcement order determined in favour of one homeowner on one residential site/in one tenement. The Committee should consider fully the consequences of deregistration of a factor for all other homeowners under the management of the property factor in tenements and on residential developments not the subject of any enforcement order. 31. GGL's position is therefore that in such a situation, the registration of the property factor should only be removed from involvement on the tenement or residential development which is the subject matter of the property factor enforcement order. Voluntary Accreditation Scheme 32. GGL have noted the Scottish Government's submission to the Committee. GGL would concur in any decision to defer the Bill while the Accreditation Scheme was given a chance to work. GGL views the accreditation scheme as having the potential to develop and be an effective forum for participating members. It has the scope to embrace new initiatives and prove a successful scheme of regulation. Conclusion 33. GGL is supportive of the aims of the Bill in relation to the regulation of property factors who operate under a common ownership model but that the Bill in its' present form fails to recognise the distinction between property factors and bodies which own land under a single ownership model. For the reasons stated GGL's position is that bodies which own land under a single ownership model should be removed from the scope of the Bill. 34. The submissions above do not represent all the comments GGL could make on the Bill, but they have sought to keep their submissions concise and constructive. A number of the provisions require more detailed scrutiny and meaningful consultation with all key stakeholders including GGL would be welcomed.

5 Greenbelt Group Limited August 2010