Property Factors (Scotland) Bill: Stage 2
Item 2 is consideration of stage 2 amendments to the Property Factors (Scotland) Bill. I welcome Alex Neil, the Minister for Housing and Communities, and, from the Scottish Government, Simon Stockwell, the head of family and property law; Barry McCaffrey, legal adviser to the Scottish Government’s European Union office; and Willie Ferrie, Scottish parliamentary counsel. The member in charge of the bill, Patricia Ferguson MSP, is supported by Mike Dailly, principal solicitor of Govan Law Centre. Malcolm Chisholm is here as a committee substitute.
Section 1—Register of property factors
Amendment 36, in the name of Patricia Ferguson, is grouped with amendments 37, 38, 40 to 42, 114, 43 to 45, 50 to 54, 58, 106 and 111.
I will be brief. The first group consists of technical amendments that are designed to provide clarity and to correct typographical issues in part 1 of the bill. Amendment 54 updates section 5(2)(b) to provide a link with the new Equality Act 2010.
I move amendment 36.
The Government is content with amendments 36, 37, 38, 40, 41, 42, 114, 43, 44, 45, 50, 51, 52, 53, 54, 58, 106, 111—I am happy to repeat those numbers if members wish. All the amendments are from the member in charge of the bill and many of them pick up comments that the Government has made.
Amendment 42 is fine as far as it goes, but companies that gave evidence at stage 1 criticised section 3(2)(e) on the ground of commercial confidentiality. The committee also noted that the need for constant updates was too onerous. In the stage 1 debate, Patricia Ferguson said:
“the committee is right to suggest that the database should be updated ... on a yearly basis, rather than immediately a change occurs. I will seek to clarify that provision at stage 2. I propose that the information should remain confidential and should not be published.”—[Official Report, 8 December 2010; c 31294.]
It would be useful to know whether she plans to lodge further amendments on that at stage 3.
We are still considering that matter. I am happy to look at it again before stage 3 and to lodge further amendments if necessary. We have tried to clarify the position in several amendments that are to be discussed today. I hope that that will become clearer as we deal with those amendments. Our amendment 42 covers the specifics of publishing the list.
Amendment 36 agreed to.
Section 1, as amended, agreed to.
Section 2—Meaning of “property factor”
Amendments 37 and 38 moved—[Patricia Ferguson]—and agreed to.
Amendment 39, in the name of Patricia Ferguson, is grouped with amendments 1 to 5, 22, 27, 107, 109 and 110. If amendment 39 is agreed to, amendments 1 and 2 will be pre-empted.
Section 2(1) provides a definition of a property factor in three scenarios, which can be summarised as a traditional factor of flatted dwellings, a council or housing association factor and a land management company factor. At paragraph 62 of its stage 1 report, the committee recognised the need to tighten the drafting
“to ensure that there is no doubt as to whether a land-owning maintenance company is covered by the Bill’s provisions.”
In consultation with my legal team, I have considered the issue. With the support of Consumer Focus Scotland, we propose a much tighter definition that will add new paragraphs (c) and (d) to section 2(1). Amendment 39 deals with land-owning maintenance companies. The committee will note that we have anticipated the possibility of a land-owning maintenance company delegating its functions to a third party—proposed new paragraph (d) covers that.
The minister’s amendment 1 is helpful and we have incorporated its wording in amendment 39. Amendment 2 is unnecessary, given that we use the concept of owners of related properties, which implies two or more owners and which is defined by the Title Conditions (Scotland) Act 2003. Through amendment 110, I propose that the bill should adopt that definition in its interpretation section.
I support the minister’s amendments 4, 5, 22 and 27, which deal with persons or associations that are excluded from being property factors for the purposes of the bill. However, I remain to be convinced that amendment 3 is needed, as section 2(1)(b) deals with local authority or registered social landlord factors generally.
My amendments 107, 109 and 110 propose changes to section 28—the bill’s interpretation section—to define the concepts of “facilities”, “land” and “related properties”, which I believe is necessary to capture land-owning maintenance companies as clearly and objectively as possible.
I move amendment 39.
The amendments all relate to the definition of “property factor”; I will speak first about the Government’s amendments. There is a high level of consensus between the Government and Patricia Ferguson in what we are trying to achieve—the issue is how best to achieve it.
Amendment 1 relates to section 2(1)(c) and seeks to ensure that land maintenance companies are covered generally by the definition. The first part of the amendment deletes the reference to ownership, given that in some cases land may continue to be owned for a period of time by the developer rather than the land maintenance company. Amendment 1 also ensures that under section 2(1)(a), only those carrying out a business are caught by the definition at section 2(1)(c).
Amendment 2 provides that the definition at section 2(1)(c) applies only when the land is available for use by the owners of two or more properties. Section 2(1)(c) as currently drafted might cover individuals who grant someone a servitude or access rights and require a payment in exchange so that the land can be maintained. Amendment 2 puts beyond doubt that private arrangements of that nature are not covered.
Amendment 3 is linked to amendment 1, which restricts section 2(1)(c) to those who operate as a factor as part of a business. Amendment 1 could have the effect of taking local authorities and housing associations in land management cases out of the definition, but amendment 3 ensures that they are still covered.
Amendment 4 excludes various bodies and parties from the definition of “property factor”. The first exclusion at proposed new paragraph (a) is for the Queen’s and Lord Treasurer’s Remembrancer, and the second exclusion at proposed new paragraph (b) is for development management schemes. The third exclusion at proposed new paragraph (c) puts it beyond doubt that sub-contractors who are working on behalf of the property factor or land maintenance company will not themselves be caught by the definition of “property factor”.
Amendment 5 gives ministers an order-making power to amend the definition of “property factor” that is subject to affirmative resolution. As a result, amendment 27 excludes the power to amend the definition of “property factor” from powers to make statutory instruments under the bill that are subject to negative resolution procedures.
Amendment 22 relates to the power at section 26 for ministers to delegate functions. The amendment provides that ministers may not delegate the order-making power to amend the definition of “property factor”.
Turning to Patricia Ferguson’s amendments, we have a major concern about amendment 39, which refers to “related properties”. Amendment 110, which was also lodged by Patricia Ferguson, would provide that “related properties” has the meaning that is given in section 66 of the Title Conditions (Scotland) Act 2003. However, the definition in the 2003 act is lengthy and complex, and serves a particular purpose in relation to manager burdens. It is not clear to what extent some aspects of the definition of “related properties” would be applicable to land as maintained by land maintenance companies.
That is an unnecessary complication, and there may be unintended consequences. We would not want an unduly narrow and technical interpretation of the concept of “property factor” under section 2(1) of the bill that relies on concepts that have been imported from the 2003 act, which has a different legal context. The amendments that I have lodged avoid such complications and seek to ensure that all property factoring arrangements are covered in section 2(1).
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Patricia Ferguson also lodged amendments 107 and 109 in this group. Amendment 109 defines “land”, and amendment 107 defines “facilities”. We have concerns about those two proposed definitions as they rely on references to “related properties”, which, as I have already indicated, produces an uncertain result.
I appreciate why Patricia Ferguson considers that definitions might be helpful under the bill, and the Government is happy to meet her and her advisers to see whether any definition should be added at stage 3.
There might be further unintended consequences from amendment 39’s proposed insertion into section 2(1) of new paragraph (d), which refers to persons who are
“instructed to carry out management and maintenance”.
That might cast further doubt on whether subcontractors who are engaged by property factors are excluded from the definition. Our amendment 4 seeks to remove any doubt by creating an express exclusion.
I invite the committee to agree to Government amendments 1 to 5, 22 and 27, and to reject Ms Ferguson’s amendments 39, 107, 109 and 110.
I thank the member in charge of the bill and the minister for their comments. As we are all aware, the committee was exercised at stage 1 about the definition of “property factor” and the desire to include those who had both a land ownership role and a factoring role. The member in charge has gone some way, through amendment 39, to ensuring that we do that, which is helpful.
Having listened to the minister’s concerns, I am not convinced that the amendment would have the unintended consequences that he spoke about. However, I hope that there will be an opportunity for further discussion and that the matter can be addressed again at stage 3. The amendment relates to an important point, which the committee wished to ensure was covered in the bill, so I hope that we can get a definition that achieves that.
The minister will no doubt comment on this when he winds up, but if I understood what he said, his amendment 3 was lodged only in consequence of amendment 1. Does he accept that amendment 3 is not necessary if amendment 39 is agreed to? That is what Patricia Ferguson said.
Amendment 3 is obviously linked to amendment 1. If amendment 1 falls, amendment 3 will be redundant.
In drafting amendment 39, we were careful to refer back to the concerns that the committee raised about clarity and the definition in respect of property managers, recognising that there is more than one model of property manager operating in Scotland—hence the specific nature of the amendment.
I will try to answer some of the minister’s concerns, which I appreciate are genuine. I also appreciate his offer of further meetings, the purpose of which would be to come to a consensual agreement on the matter. When it comes to third-party contractors, our specifying that responsibility arises only in respect of the burdens that are placed on owners in their title deeds suggests to me that contractors would be excluded. Furthermore, we mention that
“in the course of the person’s business”
they are obliged to manage or maintain land, and that helps to give clarity as to who is caught by that aspect of the provisions.
Indeed, the element to do with the burdens in the title deeds would also help to clarify whether a developer who was acting in lieu of owners at the beginning of a new development would be captured by the provisions. I press amendment 39.
The question is, that amendment 39 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Chisholm, Malcolm (Edinburgh North and Leith) (Lab)
McNeil, Duncan (Greenock and Inverclyde) (Lab)
Mulligan, Mary (Linlithgow) (Lab)
Against
Doris, Bob (Glasgow) (SNP)
Johnstone, Alex (North East Scotland) (Con)
Morgan, Alasdair (South of Scotland) (SNP)
Tolson, Jim (Dunfermline West) (LD)
Wilson, John (Central Scotland) (SNP)
The result of the division is: For 3, Against 5, Abstentions 0.
Amendment 39 disagreed to.
Amendment 1 moved—[Alex Neil]—and agreed to.
Amendment 2 moved—[Alex Neil].
The question is, that amendment 2 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Doris, Bob (Glasgow) (SNP)
Johnstone, Alex (North East Scotland) (Con)
Morgan, Alasdair (South of Scotland) (SNP)
Tolson, Jim (Dunfermline West) (LD)
Wilson, John (Central Scotland) (SNP)
Against
Chisholm, Malcolm (Edinburgh North and Leith) (Lab)
McNeil, Duncan (Greenock and Inverclyde) (Lab)
Mulligan, Mary (Linlithgow) (Lab)
The result of the division is: For 5, Against 3, Abstentions 0.
Amendment 2 agreed to.
Amendment 3 moved—[Alex Neil].
The question is, that amendment 3 be agreed to. Are we agreed?
Members: No.
There will be a division.
For
Doris, Bob (Glasgow) (SNP)
Johnstone, Alex (North East Scotland) (Con)
Morgan, Alasdair (South of Scotland) (SNP)
Tolson, Jim (Dunfermline West) (LD)
Wilson, John (Central Scotland) (SNP)
Against
Chisholm, Malcolm (Edinburgh North and Leith) (Lab)
McNeil, Duncan (Greenock and Inverclyde) (Lab)
Mulligan, Mary (Linlithgow) (Lab)
The result of the division is: For 5, Against 3, Abstentions 0.
Amendment 3 agreed to.
Amendments 4 and 5 moved—[Alex Neil]—and agreed to.
Section 2, as amended, agreed to.
Section 3—Application for registration
Amendments 40 to 42, 114, 43 and 44 moved—[Patricia Ferguson]—and agreed to.
Section 3, as amended, agreed to.
Section 4—Registration
Amendment 45 moved—[Patricia Ferguson]—and agreed to.
Amendment 46, in the name of Patricia Ferguson, is grouped with amendments 48, 55, 60, 84 and 86.
This group of amendments deals with compliance with the property factor code of conduct. The bill requires property factors to demonstrate “reasonable compliance” with the code. The Scottish Government observed that given that the code would set out minimum standards the drafting gives rise to the danger that factors might be able to provide a service at a lower level than is envisaged in the code, which is not the intention. Accordingly, the amendments would remove the word “reasonable”, to ensure that there must be compliance with the code as a minimum standard.
I move amendment 46.
I strongly support the amendments in the group. They are important, because the code of conduct is at the heart of the bill. Indeed, the legislation will come in two parts and we will need to scrutinise what is in the code of conduct in due course. Obviously, I had concerns that the word “reasonable” might be a way in which factors could get round the intention of the bill. It is better to remove it, because that makes it absolutely clear to everyone that the code of conduct must be adhered to. The amendments are important ones to what, in my mind, is the most important aspect of the bill.
As no other members want to speak, I call the minister.
Thank you, Presiding Officer—I mean convener. That was perhaps forecasting what will happen after the election.
There is no chance of that. Anyway, move on quickly.
The Government is content with amendments 46, 48, 55, 60, 84 and 86. Some of the amendments ensure that there must be full compliance with property factor enforcement orders, which is entirely appropriate. In addition, many of them relate to the code of conduct, which will be published under section 13 and which will set out minimum standards. To require only reasonable compliance with standards that are set at the minimum level would not work. Simply requiring compliance, as Ms Ferguson’s amendments will do, is preferable.
The approach taken to the section 13 code of conduct is different from the approach taken by the Government-led stakeholder group, which has developed a draft statement of quality standards for a voluntary accreditation scheme. The rationale for the voluntary scheme is to encourage best practice whereas, clearly, the minimum standards that are required for statutory registration cannot be set at too exacting a level. The differences in approach between the code of conduct and the accreditation scheme mean that the accreditation scheme standards cannot just be taken and used as the code of conduct. Thought and consultation will be needed on the code.
Amendment 46 agreed to.
Amendment 47, in the name of Patricia Ferguson, is grouped with amendments 49, 56, 57, 61 and 62.
I will be brief again. The amendments in the group are technical in nature and will help to ensure consistency in the use of the terms “property factor code of conduct” and “property factor enforcement order”.
I move amendment 47.
The Government is content with the amendments in the group, which we believe will improve the clarity of the provisions to which they relate.
Amendment 47 agreed to.
Amendments 48 to 52 moved—[Patricia Ferguson]—and agreed to.
Section 4, as amended, agreed to.
Section 5—Section 4: considerations
Amendments 53 to 57 moved—[Patricia Ferguson]—and agreed to.
Amendment 6, in the name of the minister, is grouped with amendments 21, 24 and 29.
These amendments relate to the recovery from property factors of costs that are linked to the dispute resolution service under part 2 of the bill.
The intention is to ensure that the costs of the dispute resolution service are not met just by the taxpayer. Amendment 21 provides ministers with the power, subject to the affirmative resolution procedure, to make provision for the recovery of costs. Charges may be imposed to recover the costs of the panel, the president of the panel and the committee that arise from their functions under part 2.
11:30
Amendment 21 also lays down that charges may be levied on factors only when the president of the panel refers an application to the committee and when a property factor enforcement order is made. Section 17(2) provides that the president may reject an application and not send it to the committee if there is good reason for rejecting it. That ensures that factors should not be landed with charges for malicious complaints. Ministers will be obliged to ensure that income from the charges
“does not exceed the relevant costs.”
Amendment 6 relates to section 5, which lays down matters to which the Scottish ministers are to have regard when deciding whether a person is a fit and proper person to be registered as a property factor. Section 5 includes cases in which the factor is or has previously been a property factor. Amendment 6 provides that in such cases ministers shall have regard to any failure to pay charges that are levied on factors in respect of the dispute resolution service.
Amendment 24 is a consequential amendment to section 26, to ensure that ministers’ power to make regulations on charges on property factors cannot be delegated. Amendment 29 is another consequential amendment. It amends section 27 to exclude that regulation-making power from the list of statutory instruments under the bill that are subject to negative resolution procedures.
I invite the committee to agree to amendments 6, 21, 24 and 29.
I move amendment 6.
I am supportive of this group of amendments, which will enable the Scottish ministers to make rules requiring property factors to pay for the cost of proceedings in certain cases, on what I hope will be a polluter-pays basis. That will be a matter for ministers and Parliament to determine, but I support the amendments.
Amendment 6 agreed to.
Amendment 58 moved—[Patricia Ferguson]—and agreed to.
Section 5, as amended, agreed to.
Sections 6 and 7 agreed to.
Section 8—Removal from register
Amendment 59, in the name of Patricia Ferguson, is grouped with amendments 63 to 71.
This group contains some tidying-up amendments, as well as some more substantial amendments that address a particular issue that the committee highlighted at stage 1.
In paragraphs 81 to 83 of the committee’s stage 1 report, concern was expressed that if a factor were deregistered there would need to be transitional arrangements to prevent a break in continuity of service. Our solution to that important concern is to amend section 8(7) with amendments 65 and 66.
Amendment 65 sets the date of removal from the register at 21 days after notice of impending removal is given to the property factor under section 8. The period of 21 days ties in with the 21-day period of appeal for which section 11(2) provides, so a factor will not be deregistered immediately.
Amendment 66 requires the public notice, as defined by section 14(3), that is to be given of the date of removal to include notice to local authorities, who could circulate information to advice networks and, perhaps, the media. That would provide customers of a factor that was to be deregistered with notice of that possibility and enable them to take steps to ensure that a replacement factor was appointed or, at least, that continuity of basic services was provided as an interim measure.
I move amendment 59.
The Government is content with all the amendments in the group, which reflect a number of suggestions that we made to the member in charge of the bill.
Amendment 59 agreed to.
Amendments 60 to 66 moved—[Patricia Ferguson]—and agreed to.
Section 8, as amended, agreed to.
Section 9—Effect of refusal to enter in register or removal from register
Amendments 67 and 68 moved—[Patricia Ferguson]—and agreed to.
Amendment 116, in the name of Patricia Ferguson, is grouped with amendment 117.
Following discussions with Consumer Focus Scotland after stage 1, I accepted that, on land-owning maintenance companies, there was a need to link the bill to the Title Conditions (Scotland) Act 2003 in relation to deregistration of companies such as property factors and, of course, in relation to the ability of home owners to take decisions in accordance with that act, whether on the appointment of a new property factor or of no property factor, if that was their decision. The position is complex, in that the company will still own the land. I fully accept that that issue needs to be addressed, but for a number of reasons I do not believe that it can be addressed in the bill.
Civic Scotland would need to be consulted on what would, in effect, be a compulsory purchase provision, and the complexity of the issue means that there must be a particular focus on it. The relatively radical nature of the provision could also be well beyond the bill’s competence, given what the standing orders say on bill amendments that go beyond a bill’s general principles. However, amendments 116 and 117 would at least clarify the law as a consequence of deregistration under the bill, and would make the necessary consequential amendments to the 2003 act.
I move amendment 116.
The issue of how to deal with property factors who are also landowners exercised the committee at stage 1. The member in charge of the bill is absolutely right to say that the issue is particularly complex, and it is disappointing that we will not be able to resolve the situation at this stage. Despite the extensive consultation that she clearly carried out for stage 1, that consultation did not particularly address the issue and was unable to furnish us with solutions.
Whatever happens after the elections in May, I hope that the next Government will return to the issue, as it was flagged up to the committee as an issue of concern. The member in charge of the bill was correct to say that we will not be able to address it. I welcome amendments 116 and 117, as far as they go in addressing the issue, although I think that we will return to it.
There are two main technical problems with amendments 116 and 117. First of all, the bill empowers ministers to refuse to register or to deregister a land maintenance company. The burden of the title deeds to pay the company for maintenance would remain, which would provide an income stream that the deregistered company might seek to sell on to a registered company. The bill does not deal with that issue, I presume because the member in charge took the view that a deregistered land maintenance company should be entitled to sell its assets. If that is indeed the view, it follows that any new powers that would be available to residents to appoint a new manager might need to reflect the fact that burdens in title deeds might still exist. Residents could seek to vary or discharge those burdens by applying to the Lands Tribunal for Scotland under part 9 of the Title Conditions (Scotland) Act 2003.
Secondly, there is a clear defect in amendment 116, which seems to offer a choice between sections 28 and 64 of the 2003 act. We do not think that such a choice can be provided, given the different ways in which the sections work. Section 28 is about the power of a majority to appoint a manager of community burdens, subject to the title deeds or where nothing is laid down in them. On the other hand, the provision in section 64 allows for a two-thirds majority to dismiss and replace a manager of related properties in relation to a manager burden once a time period has elapsed, regardless of what is provided in the deeds. Amendment 116 would create further uncertainty in providing for the appointment of a new factor or no property factor in accordance with the title deeds. Again, it is unclear how that relates to the specific provisions on the appointment of new property managers in sections 28 or 64 of the 2003 act.
We are also uncertain about the exact impact of amendment 117. To extend the 2003 act to property factors in the way that the member proposes might well add to rather than reduce confusion, and would also bring into play concepts such as related properties, which could create uncertainty and complicate matters unnecessarily.
The Government has an alternative approach. We have recognised that further provision might be needed to deal with the consequences of deregistration, including its interaction with existing legislation such as the 2003 act. The Government’s amendment 26, which we will discuss next week, seeks to empower ministers to make ancillary provision by affirmative resolution or order to give full effect to the bill. My officials and I are happy to meet Ms Ferguson and her advisers to go through the various scenarios and to discuss how the ancillary provisions powers that are proposed in amendment 26 might be used. If together we conclude that more powers are needed in the bill, I am happy to consider with the member the need for any amendments at stage 3.
In the meantime, I ask the member not to press amendments 116 and 117.
Does the member wish to press or seek to withdraw amendment 116?
I am going to press amendment 116, convener, although I thought that I would get the chance to respond.
I am sorry—you do.
I hope that what I have to say will be helpful.
I entirely agree with Mrs Mulligan that it is unfortunate that it has not been possible to introduce a provision that will solve once and for all the problem of covering the full situation of those who depend on land management companies for maintenance of the common parts of an estate or other development. Nevertheless, those who find themselves in such a situation must have an opportunity to avail themselves of the provisions in the bill, so to that end we have tried to define who the persons in question might be—for example, factors also include land maintenance companies—and are giving people recourse to the panel.
That said, we need to consider what will happen if such a company is deregistered. I think that it is extremely unlikely that a land maintenance company will be deregistered, because too much rides on their ability to perform the tasks on behalf of owners on estates and developments. Although it is unlikely that they would allow themselves to get to that extreme, we have to work on the basis that no matter how unlikely a scenario is, it may occur. Amendments 116 and 117 attempt to give people some back-up and reassurance in that situation.
11:45
Amendment 116 makes it clear that where land management companies are deregistered, the home owner can still make decisions about the land under the 2003 act. However, the act mentions managers, and we are making it clear that that also means a factor or a property manager, in this case. The minister suggested that we are giving people an either/or scenario. What we are actually doing is referring to either of the situations in which people might find themselves. At the point at which it has to be adjudicated it will be clear to them, bearing in mind the burdens on their title deeds, which of the scenarios applies to them. We are not introducing confusion, as was suggested by the minister.
The question is, that amendment 116 be agreed to. Are we all agreed?
Members: No.
There will be a division.
For
Chisholm, Malcolm (Edinburgh North and Leith) (Lab)
McNeil, Duncan (Greenock and Inverclyde) (Lab)
Mulligan, Mary (Linlithgow) (Lab)
Against
Doris, Bob (Glasgow) (SNP)
Johnstone, Alex (North East Scotland) (Con)
Morgan, Alasdair (South of Scotland) (SNP)
Wilson, John (Central Scotland) (SNP)
Abstentions
Tolson, Jim (Dunfermline West) (LD)
The result of the division is: For 3, Against 4, Abstentions 1.
Amendment 116 disagreed to.
Amendment 69 moved—[Patricia Ferguson]—and agreed to.
Section 9, as amended, agreed to.
Section 10—Section 9: interpretation etc
Amendments 70 and 71 moved—[Patricia Ferguson]—and agreed to.
Amendment 72, in the name of Patricia Ferguson, is grouped with amendments 7 and 108. If amendment 72 is agreed to, amendment 7 will be pre-empted.
Given the importance of the definition of “homeowner” for the purposes of the whole bill, on reflection I believe that it would be better if the definition was moved to the interpretation section, which is section 28. Although the minister has lodged an amendment to the existing definition in section 10, I suggest that that is not necessary now, given the new and comprehensive definition that is proposed in my amendment 108.
Amendment 108 proposes a definition of “homeowner” that includes all possible property factoring scenarios in which the home owner is a residential occupier, and traditional property factoring arrangements, as well as those for land-owning land maintenance companies.
I move amendment 72.
My amendment 7 and Patricia Ferguson’s amendments 72 and 108 are aimed at ensuring that all customers of property factors, including customers of land-owning land maintenance companies, can use the dispute resolution service in part 2 of the bill. However, the Government amendment is preferable, so I invite the committee to agree to amendment 7 and to reject amendments 72 and 108.
Amendment 7 is straightforward. Part 2 of the bill provides a dispute resolution service. Under section 16 of the bill, a home owner can apply to the home owner housing panel to resolve a dispute with a property factor. “Homeowner”, as currently defined in section 10(5) of the bill, refers only to an owner of land or buildings. As the customers of land-owning land maintenance companies do not generally own the land being managed or maintained, they could be excluded inadvertently from the dispute resolution service.
To resolve that, amendment 7 expands the definition of “homeowner” so that it will cover
“an owner of residential property adjoining or neighbouring land”
that the owner can use and is managed or maintained by a factor. That ensures that for all types of property factors—as described in section 2(1) of the bill—their customers, as home owners, will be able to have recourse to the dispute resolution service.
Amendments 72 and 108 also deal with access by land maintenance company customers to the part 2 dispute resolution service. Patricia Ferguson and the Government are both trying to achieve the same effect. However, we do not consider that Patricia Ferguson’s amendments work technically.
In the definition that amendment 108 proposes, both paragraphs (a) and (b) of the proposed new definition of “homeowner” for section 28 of the bill would refer to “an owner of land”, which does not cover cases in which the owner is a land maintenance company. That takes us back to the problem that we are trying to resolve. I appreciate that paragraph (b) is meant to provide a clear alternative to paragraph (a), but we do not think that the drafting achieves that.
In addition, amendment 108 refers to “related properties”. That term would be defined by amendment 110, which was also lodged by Patricia Ferguson, by using the definition in the Title Conditions (Scotland) Act 2003. The definition in the 2003 act is complex and is used in a different legal context. To use it here would produce a highly uncertain result, so I invite the committee to agree to Government amendment 7 and to reject Patricia Ferguson’s amendments 72 and 108.
I have a feeling that these amendments are probably redundant, in view of the fact that the minister won the vote on an earlier amendment, so I will not press them and seek to withdraw amendment 72.
Amendment 72, by agreement, withdrawn.
I am sorry, convener, but I just want to clarify that when Patricia Ferguson referred to “these amendments” being redundant, was she just referring to her own amendments?
Yes. I will clarify that. I am sorry for causing confusion; it will probably not be the last time. My amendments 72 and 108 are redundant because the committee voted against my amendment 39 earlier. For that reason, I will not press my amendments, but I think that the minister’s amendments are still relevant.
That is helpful.
Amendment 7 moved—[Alex Neil]—and agreed to.
Section 10, as amended, agreed to.
Section 11—Appeal against refusal to register or removal from register
Amendment 73, in the name of Patricia Ferguson, is grouped with amendments 74 to 79, 8, 80 and 23. I point out that amendment 8 will pre-empt amendment 80.
Section 11 covers the procedure for appeal against refusal to register or removal from the register. The amendments in my name in this group contain technical changes to improve the clarity and purpose of section 11. However, I think that the Scottish Government’s position is that amendment 80 is not strictly necessary, given that a general power is available to the Court of Session to regulate civil procedure in the sheriff court. If that is the minister’s view, I am happy to accept his position and to move all my amendments except amendment 80, and to support the minister’s amendments 8 and 23, which would mean that section 11(12) would be removed from the bill.
I move amendment 73.
I thank Patricia Ferguson for her statement on amendment 80. We are content with all the other amendments in the group and are happy to support them. I do not think that there is a need to go into further detail, quite frankly, if we are happy to agree that amendment 80 be dropped.
Amendment 73 agreed to.
Amendments 74 to 79 moved—[Patricia Ferguson]—and agreed to.
Amendment 8 moved—[Alex Neil]—and agreed to.
Section 11, as amended, agreed to.
Section 12—Offence of operating as a property factor without registration
Amendment 81, in the name of Patricia Ferguson, is grouped with amendments 82 and 83.
This small group of amendments will make minor but important typographical changes to improve the precision of section 12 by using the word “when” instead of the word “after” in relation to appeals when an offence is or is not committed when a property factor operates as a property factor without being registered.
I move amendment 81.
The Government is content with the amendments. They are based on suggestions that we have made and they will add clarity to the bill’s purpose.
Amendment 81 agreed to.
Amendments 82 and 83 moved—[Patricia Ferguson]—and agreed to.
Section 12, as amended, agreed to.
Section 13—Code of conduct
Amendment 84 moved—[Patricia Ferguson]—and agreed to.
Section 13, as amended, agreed to.
Convener, is it possible to make a point about section 13? Do we have a debate on the section?
We have just agreed to section 13.
Do we not have the chance to debate the section?
You can put something on the record, if you wish.
I have been prompted by a debate earlier this morning to raise the question. We might want to return to the point at stage 3, but it seems to me that the “minimum standards” that are referred to in the second line of section 13 could be open to two different interpretations. In his contribution to earlier amendments around the word “reasonable”, the minister suggested that minimum standards could not be the same as or similar to the draft code of accreditation that has already been consulted on. The implication of what the minister was saying is that the code of conduct would embody relatively weak standards that everyone should meet, and that best practice would be far beyond that. The alternative interpretation of “minimum” is that the standards should be strong and everyone should have to adhere to them, but some people can do even better than just meeting those standards.
Given that the code of conduct is the pivot of the bill, I am concerned that the minister is using the word “minimum” in different ways. Patricia Ferguson’s intention is that the standards should be strong. I suppose I should have lodged a probing amendment on that, and I might do so at stage 3. If it is in order, I would welcome comments from the minister and Patricia Ferguson.
12:00
I think that it is not in order to get additional comments. We are in unusual territory, however. Your comments are on the record. We will move on.
After section 13
Amendment 115, in the name of Patricia Ferguson, is in a group on its own.
I am happy to help Mr Chisholm with his difficulties later—or at least the one that relates to the bill. [Laughter.]
Amendment 115 is on the registered property factor identifier. The system of registration under the bill is designed to protect the Scottish public and ensure minimum standards among registered property factors. Clearly, the public should be able to check and identify easily that a property factor is properly registered. Amendment 115 will require Scottish ministers to devise a form of identification that registered property factors should use in their communications with home owners or in general advertising of their factoring services. I am conscious that there is a similar provision on landlord registration in the Private Rented Housing (Scotland) Bill. It is appropriate to include this provision in this bill. Given the debate about whether to have a mark or a registration number, I thought it appropriate to refer to an “identifier”. I will leave it to ministers to ensure consistency at a later date.
I move amendment 115.
We are sympathetic to the aim of the provision, but more work needs to be done before we can agree to it. We have some questions in that regard. What would the identifier be used for? Will it be part of the registration process? Is it to help customers to know that their factor is registered? Is it to allow factors to demonstrate that they are registered? Is it for all those objectives? We also need to ask whether statutory provision is needed at all. A registered factor will want to demonstrate to customers that it is registered. As part of the registration process, ministers are likely to give a registration number to each registered factor. Those points might suggest that nothing statutory is needed in terms of an identifier.
One point is clear: amendment 115 contains no sanctions if a factor does not use the identifier. If we impose a duty, a sanction must also be available to us if the duty is not complied with. The Government cannot, therefore, support amendment 115 as it is currently drafted. We could amend section 8(2)(b) of the bill to include a sanction such that a factor’s failure to comply with the duty to include the identifier, or inappropriate use of the identifier, could lead to deregistration. In devising sanctions on any failure to comply with a statutory duty, we need to take account of the fact that, under the bill, there are circumstances—albeit that they are limited—in which unregistered factors can operate. Section 12 envisages two such circumstances: first, when ministers are considering applications for registration during the transitional introductory period; and, secondly, when deregistration is being appealed.
As I said, a bit more work is required on amendment 115. I suggest that Patricia Ferguson seek leave to withdraw the amendment for now. I commit to the Government’s discussing further her ideas with her. I hope that we can agree on a stage 3 amendment that satisfies all the points that have been raised.
In view of the minister’s helpful comments, I seek leave to withdraw amendment 115.
Amendment 115, by agreement, withdrawn.
Section 14 agreed to.
That concludes day 1 of our stage 2 consideration of the Property Factors (Scotland) Bill. I thank you all for your attendance.
Meeting closed at 12:03.