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Scottish property managers

Launched June 2008

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Purpose of the study

The purpose of the study was to determine whether the market for residential property management services in Scotland was working effectively. The study assessed the current level of competition in this sector and investigated whether the existing mechanisms through which owners of flats in a block or homes employ property managers to look after common and shared property gave rise to significant consumer detriment. The study also looked at the supply of communal land maintenance services to property owners in Scotland.

(Study followed in-house work.)

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Findings

The findings of the study were:

  • competition in this market was not working well for consumers
  • the level of switching was very low and that consumers often did not understand their rights and obligations, and did not have a clear understanding of the standards they expect from a property manager
  • when things go wrong, there was no effective redress mechanism.

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Recommendations

  • The report recommended a number of significant changes to the property managers market in Scotland.

  • The early implementation of a self-regulatory scheme with an independent complaints redress mechanism promoted by the Scottish Government, if this fails to be effective, there is a case for statutory regulation.

  • The Scottish Government to develop an advice service for proprietors and managing agents.
     
  • Details of management fees and obligations be available when buying a property, and that this should become a requirement under the Homebuilders Code.

And in specific relation to land maintenance services that:

Consumer Focus Scotland should help bring forward a test of the legislation that enables owners to switch their land maintenance company.

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Action following market study

  • On 13 May 2009 The Scottish Government responded to the OFT's report on property managers.  

  • OFT responded to the Scottish Government's response (May 2009) to the OFT Market Study recommendations. OFT welcomed the Scottish Government's commitment to a robust complaints and redress system in the proposed accreditation scheme. OFT advised that a dedicated source of specialist advice is likely to be required given the complex nature of the requirements and to enable development of requisite expertise or experience in the area. 

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Market study details and report

See press release OFT finds significant problems in Scottish property management market 12 February 2009

Download Property managers in Scotland - a market study (pdf 405 kb) February 2009

Annexes - all pdf files.

The formal response from Scottish Government can be viewed at the Scottish Government website 13 May 2009

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Background information

See press release OFT launches market study in Scottish property factoring 17 June 2008.




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