What do property factors do?
Property factors provide a service to homeowners in buildings with shared spaces like apartment complexes, and tenements. Typically factors ensure that shared areas like stairways, doorways, lifts, roofing and guttering and possibly even gardens are maintained to a high standard and safety regulations are upheld. Factors can also advise and oversee investment in property improvements and help organise communal buildings insurance for residents.
How are factoring services paid for?
Homeowners will be charged a property management fee on a regular basis. When you buy a property with factoring services, these costs should be clearly explained to you by your solicitor. It’s not uncommon for there to be additional payments into a building maintenance fund to prepare for larger repairs or improvement projects too.
Taylor and Martin offer flexible billing arrangements and will always communicate costs transparently in advance. We never apply hidden fees, and we are always available to help you understand your factoring fees.
Why is a property factor involved in selling property?
To ensure a legal and hassle-free transfer of ownership, property factors should be involved during the sales process to ensure that final bills are paid. Property factors are responsible for keeping detailed records of work planned and completed in the buildings they manage and need to ensure relevant documentation is transferred to the new owners.
Homeowners in factored properties have additional legal responsibilities as outlined in the Deed of Conditions homeowners sign when they purchase a property. These responsibilities include keeping up to date on factoring fees and maintenance fund payments to keep your building’s shared areas in order as well as insuring the building’s common areas, which we’ve already produced a guide on.
Why does my property factor want to contact my solicitor?
The Taylor and Martin team need to liaise with the seller’s solicitor to make them aware of the status of the factored seller’s account, including any outstanding debts or liability for any accidental damage.
We also need to inform the solicitor of any planned works that are planned and fully or partially paid for by the seller. The solicitor will need details to inform a potential buyer of any property development funds and common insurance policies to give an accurate estimate of the factoring costs associated with the property.
We may also need to provide copies of important documents such as building warrants, warranties from completed work, and local authority certificates to the seller’s solicitor.
Our property experts will need your solicitor to confirm the address of the sold property, sale date, and the names of the buyers as well as their solicitor’s contact details. This is so we can ensure the factoring services and common insurance policies continue to protect all homeowners seamlessly.
What happens to my factoring account when I sell my home?
Our team will start to prepare your final bill up to the date of the sale. This will include all outstanding management fees, cost of repairs, insurance premiums and any contributions to a maintenance or development fund.
We’ll work out the daily rate for regular costs such as cleaning and make sure these are clearly shown. If you have a credit on your account we will make arrangements to return this to you. We’ve previously made a guide to factoring fees in Scotland which helps explain our approach to billing.
How are outstanding bills handled when selling a factored property?
The seller is responsible for paying all outstanding charges or debts in full, these cannot be passed on to the buyer. If you’re not sure which areas of the building you are responsible for then we can help you understand your commitments.
If your factored property has a sinking fund for larger maintenance, and development projects your contributions won’t be returned during a sales process. However these funds are often considered an asset during property sales – a solicitor will be able to advise the seller on this.
We’ll make sure you’re aware of what you need to pay for and why, alongside reported issues where work hasn’t yet been carried out which are excluded.