Factor is pulling out

pramsay13

I'm a landlord of a flat (although this issue would also be relevant if we were living in the property).
One of the owners is not paying the factor so the factor is pulling out at the end of the month, after warnings etc.
Most of the tenants are meeting soon to discuss the way forward, does anyone have any advice?
e.g. can we get a communal insurance policy, pool together to pay for cleaning, does it need to be a legal agreement? etc

Fire_Fox

Are you leasehold or freehold? What does your long lease say if leasehold? Does the factor have any advice for you? What about the freeholder (again if leasehold)?

scottishblondie

Are you in England/Wales or Scotland?

Fire_Fox

Factor is invariably Scotland.

Jowo_2

I have helped run self-factoring for a tenement in Scotland - I would rather poke out my eyes and eat them than do this again. Some of the owners would not pay - one became abusive. Many of the other owners would not help sort out repairs. Some did not have buildings insurance for their flats.

Many companies won't come out and fix issues in self-factored tenements unless you can assure them there is a common sinking fund they can be paid from, even then some aren't interested. Though Factors are unpopular and seen as rip-offs, they have relationships with good contractors and can usually send someone out speedily.

It consumes an inordinate amount of time and without the goodwill of all of the owners, it will be extremely frustrating. The worst thing is that the people who least contribute time or money to the fund are going to the fussiest about how its run and will hold you to account for everything.

I finally managed to get a majority of written votes by the owners to agree to be factored but one factor would not accept us even with majority voting (5 out of 8 flats) but another would.

I am glad its out of my hands now - since then we had problems with rats, drains, plumbing, locks, stairwell lights and more which would have had me running around like a blue ar*se fly while others looked on and criticised the quality and speed of repairs while not lifting a finger.

If you want to go down the self-factoring route, look at the Shelter website that gives excellent information how to set up an owners association and buy The Tenement Handbook. In fact, they tell you how to run the initial meeting - things have to be fairly formal, you can't be sloppy with its governance.

Think very carefully how you would feel about being told of a significant problem and the time you would have to spend finding someone to deal with it and whether you'd be better off having a professional do it. I used to come home from work with notes pushed through my door saying 'x needs fixing'.

When an owner doesn't pay, you can take them to the Sheriff Court (assuming that you have proof that the majority of owners consented to the work gonig ahead). Another option is to put a note of liability on the deeds at Registers Scotland which means which stays there for 5 years and means that if the property is sold, it must be settled by the seller or buyer.

To be honest, I'm surprised your Factor isn't prepared to do this and would rather walk away from the account because of the stinginess of one person- Factors routinely take owners to court.

If you want to find a new factor, then look at the Property Management Association of Scotland as its some kind of professional body but whether or not it's toothless, I couldn't tell you.

If you want to PM me, that's fine.

pramsay13

Thanks Jowo, great advice.
Yes it is Scotland as someone pointed out.
I'll have a look at other options for professional factors. I certainly don't fancy being the one doing the chasing and I've been in enough situations to recognise the kind of people Jowo is talking about.
The problem with getting another factor is that there will still be one person refusing to pay, so to get that to work long term everyone will have to chip in 1/7th more to pay for them, which doesn't seem right or sustainable.

Jowo_2

pramsay13 wrote: »

The problem with getting another factor is that there will still be one person refusing to pay, so to get that to work long term everyone will have to chip in 1/7th more to pay for them, which doesn't seem right or sustainable.

Why isn't the Factor sending them a 'letter before action' giving them a month to pay up and then taking them to the Sheriff court, then enforcing it if they don't pay up after the judgement?

Do you actually have to pay on their behalf - surely the Factor must take all the remaining owners to court if you don't want to pay it of your own volition? For instance, would it actually be worth the Factor paying 7 separate court fees if the owners all stand firm against paying the outstanding share when compared with the sum owned?

Is it a huge sum that has forced the Factor to walk away or is it because they have gained a judgement against the owner and its made no difference? I'm not familiar with Scottish law so don't know the options on how it could be enforced.

haras_nosirrah

Just an idea. If there is one householder not wanting to pay for a factor maybe offer him the job of being the self factor (the one who runs around and gets things fixed) If he refuses then say that he can have one or the other and if he doesn't want to be the factor then he can pay someone else to do it along with everyone else - may focus his mind a bit

eco-friendly_2

I'm not familiar with Scottish law so don't know the options on how it could be enforced.

If the factor obtained a decree(ccj) for the debt...

seizure of personal property/assets by Sheriff Officers
Wages arrestment
Inhibition (charge) on the property.

Seems crazy that the factor is not taking legal action?

scottishblondie

Self-factoring, as pointed out by others is messy. And if this person won't pay for the factor then it's entirely likely that they would refuse to pay any costs anyway. Surely the non-paying owner has signed a contract with the factor like everyone else, so I am also surprised that the factor isn't starting any kind of legal action against them. If someone in my building stopped paying I'm pretty sure the factor wouldn't just let it go like that!

Jowo_2

scottishblondie wrote: »

Surely the non-paying owner has signed a contract with the factor like everyone else

Not necessarily. My understanding of engaging a Factor is that they require the consent of a majority of owners, not individual contacts.

My experience is that many Factors won't touch a building where it is obvious that there is a large minority of owners who won't cooperate, who have a history of arrears. Ours took us on after meeting attended by the majority of the owners who gave verbal permission. Many will insist on a single buildings insurance policy to make it easier to sort out claims and ensure all are covered.

There is a Scottish law that compels owners to be responsible for the cost of maintenance of the common areas of the block and another which compels them to have buildings insurance. To me, its a bit like the relationship we have with Council tax - there isn't a signed contract but a legal obligation to pay it.

As per the previous posters, I am baffled the Factor is bailing out after a single refusal of payment on a single invoice by a single owner. They are usually very litigious.

To the OP - When talking to insurance brokers to see if I could find cheaper buildings insurance than the Factor offered, I was told it is harder to get this if there are buy to let landlords and DSS tenants in the building.