Buying your first flat comes with a vocabulary nobody teaches you. Somewhere between the home report and the missives, the words "property factor" appear, usually attached to a monthly or quarterly charge you were not expecting. Because you are not just buying a home. You are buying into a building, with running costs, a repair history, and a financial position that all become partly yours on the day you get the keys. This guide explains what a factor is, what you are paying for, and what to check before you commit to a purchase.
What is a property factor?
A property factor is a company (or sometimes a council or housing association) appointed to manage the shared parts of a building or development on behalf of the owners. In a block of flats, that typically means the roof, the external walls, the stairwell, the entry system, communal lighting, gardens, and anything else the owners share.
The factor arranges maintenance, instructs contractors, organises communal buildings insurance, keeps the accounts, and bills each owner their share of the costs. The factor works for the owners collectively. You and your neighbours are the client.
Factoring is a regulated activity in Scotland. Under the Property Factors (Scotland) Act 2011, anyone operating as a factor must be registered on the Scottish Property Factor Register, and it is a criminal offence to operate without registration. Every registered factor must also comply with the Property Factor Code of Conduct, a statutory code covering how factors communicate, handle money, arrange repairs, and resolve complaints.
Do I have to pay a factor?
If the flat you are buying has a factor in place, then in almost all cases, yes. The obligation to contribute to shared costs comes from your title deeds, not from a contract you personally sign. When you buy the flat, you take on the obligations that run with it.
This is worth absorbing early: the deeds are the rulebook. They set out which parts of the building are shared, how costs are divided between owners, how decisions are made, and sometimes how a factor is appointed or replaced. Your solicitor should walk you through them before you conclude missives. Ask them to.
Where the deeds are silent or incomplete, the Tenements (Scotland) Act 2004 fills the gaps with a statutory default called the Tenement Management Scheme. Under that scheme, owners make decisions about shared repairs by majority vote, and costs are usually split equally between flats. You can read more in our guide to who pays for what in a shared building.
What does a factor actually do for the money?
A reasonable question, and one worth asking of any factor. The core of the service usually includes:
Arranging maintenance and repairs. From routine work like gutter cleaning and stair lighting to coordinating major projects such as roof repairs. A good factor also inspects the building and plans ahead, rather than waiting for things to fail. Our guide on prevention rather than cure explains why that matters for your wallet.
Managing contractors. Sourcing quotes, checking that contractors are insured and competent, instructing work, and checking it was done properly before paying.
Communal buildings insurance. Most developments insure the building as a whole under a block policy. The factor arranges this and handles claims. It is worth asking whether the factor earns commission on the premium; some do, and it affects the incentive to shop the policy around.
Money management. Collecting each owner's share, holding funds for the development, paying contractors, and issuing invoices and statements. The Code of Conduct requires factors to keep clear, transparent accounts.
Communication. Keeping owners informed about work, costs, and decisions that need an owner vote.
What a factor generally does not cover: repairs inside your own flat, neighbour disputes, and council matters like bin collections. The factor manages the shared fabric of the building.
The costs to expect as a new owner
Think of this as your second housing bill. The mortgage is only part of the monthly picture, and in some developments the building side can add £50 to £200 or more a month once everything below is counted. The flat may be new to you; the building's costs are not. Expect some or all of the following:
The management fee. The factor's own charge for its work, usually billed quarterly. This is separate from the cost of any actual maintenance.
Your share of communal costs. Cleaning, gardening, communal electricity, lift maintenance if the block has one, insurance, and repairs. These vary with the building. A modern block with a lift, a door entry system, and landscaped grounds will cost more to run than a walk-up stair. And if the block has a lift, you share its costs whether you use it or not in most developments, so ask how old it is, when it was last modernised, and whether money is being set aside for it.
The outside space. Landscaping, bin stores, external lighting, play areas, and private roads all need maintained, and their costs are shared like everything else. Unadopted roads and private car parks deserve particular attention: the council does not maintain them, so resurfacing eventually lands on the owners. Ask what external works are expected over the next five to ten years.
A float. Many factors ask each owner for an upfront payment, held as a credit against the development's account, so there is working money available for repairs. It is typically refundable when you sell, once anything outstanding is cleared. It is worth asking why the float sits at the level it does: has it risen because costs have risen, or because the development has had trouble with non-payers? And if a development changes factor, outstanding development debt may be settled from the float before the balance is returned to owners. Our guide to sinking funds and floats explains the difference between the two funds.
Sinking fund contributions. Some developments build up a long-term fund for big future costs such as roof renewal or lift replacement. If the development you are buying into has one, that is generally a good sign of forward planning. A very low fund does not always mean there is a problem, but it does mean larger works will need funded by owners when they arise, usually upfront before work can proceed.
On both funds, remember: you are buying into the current position of each pot, not starting from scratch. A seller's contributions usually stay in the development's account, which can mean you benefit from money already sitting there, or inherit the gap where it should have been. Ask what the balances are and what they are already committed to. And whatever the funds hold, it is sensible to keep your own buffer for building surprises; a few thousand pounds is a commonly suggested cushion for unexpected communal repairs.
Before you buy, ask the selling agent or your solicitor for the last year of factoring invoices and the current Written Statement of Services. Together they show what the building actually costs to run, not just what the schedule says.
Check the building's fire safety position
This deserves its own section, because it is the area where buying blind can cost the most, financially and otherwise. Since Grenfell, detailed investigation across the UK has repeatedly found that flatted buildings of many eras do not perform the way their original fire strategies assumed: defective fire-stopping, combustible materials, buildings not built quite as designed. Scotland now has a formal framework for assessing and remediating affected buildings under the Housing (Cladding Remediation) (Scotland) Act 2024, and a building can sit in that process for a long time.
None of this should put you off buying a flat. It should change what you ask before you offer:
- Is there a current fire risk assessment for the common parts, and are any actions outstanding? A well-managed building can show you the assessment and the status of every action it raised.
- Does the building have an external wall system in scope for assessment? For some buildings, particularly newer or taller ones, your lender may ask for an EWS1 form or a Single Building Assessment before approving the mortgage. Missing paperwork here can stall a purchase, or a future remortgage, on its own.
- Is the building in any assessment or remediation programme, and who is paying? Remediation can take years, and the funding position matters enormously.
- Are any interim safety measures in place? A waking watch or temporary alarm arrangement is not automatically a dealbreaker, but it means a known risk is being bridged rather than fixed. Understand what it is bridging, and on what timescale.
- What is the evacuation strategy? Most flatted buildings operate a stay-put policy; some, where compartmentation cannot be relied on, have moved to simultaneous evacuation. You should know which applies before you live there.
Your solicitor can raise all of these through the seller. A building whose factor answers them quickly, with documents, is telling you something good about how it is run.
Questions to ask before you conclude missives
- Who is the factor, and are they registered? You can check the Scottish Property Factor Register online.
- What is the management fee, and what does it include? See our guide to understanding your factor invoice.
- Is there a float, and how much? You will usually need to pay this on entry.
- Is there a sinking fund, and what is the balance, and what is it already committed to? A healthy fund reduces the risk of surprise bills.
- Are there any planned, overdue, or discussed major works? You could inherit a share of a large bill. Ask too about known issues with the roof, lifts, drainage, render, or stonework, and have your solicitor check for a Notice of Potential Liability for Costs registered against the property.
- Are there arrears, disputes, or unresolved owner votes in the development? Owners who do not pay can slow repairs for everyone, and a live dispute is something you inherit along with the keys.
- What do the title deeds say about cost shares? Equal shares, floor area, or a formula in the deeds. Know your fraction before you buy.
- Can I see recent accounts and owners' meeting minutes? Minutes reveal what the building is actually wrestling with: the disputes, the deferred repairs, the works on the horizon.
- How will future works be funded? A plan with money behind it, or a shrug. The answer tells you what your first years of ownership will feel like.
- What is the building's fire safety position? The section above sets out exactly what to ask.
The theme running through all ten: do not just assess the flat. Assess the building. A beautiful flat can still come with low reserves, poor block finances, or major repairs around the corner, and the right questions up front save serious stress later.
What is a Written Statement of Services?
Every factor in Scotland must give each homeowner a Written Statement of Services, usually shortened to WSS. It is required by the Code of Conduct and it sets out, in writing, what the factor does, what it charges, how billing works, how complaints are handled, and how the arrangement can be ended. Read it. It is the closest thing you have to a contract with your factor, and it is the document any dispute will be tested against.
What if things go wrong?
You are not stuck. If a factor falls short of the Code of Conduct or its duties, the first step is the factor's own complaints procedure, which the WSS must explain. If that does not resolve matters, any single homeowner can apply to the First-tier Tribunal for Scotland (Housing and Property Chamber). The Tribunal can order a factor to take action or pay compensation. You do not need your neighbours to agree before you apply.
And if the development as a whole loses confidence in its factor, owners can usually change factor by majority decision. It takes some organisation, but it is a well-trodden path. Our guide on switching property factor covers the process step by step.
Frequently asked questions
Is a property factor the same as a landlord or letting agent?
No. A letting agent manages a tenancy on behalf of a landlord. A factor manages the shared parts of a building on behalf of all its owners. If you own your flat, the factor works for you and your fellow owners, not the other way round.
Can I opt out of the factor and just look after my own flat?
You remain responsible for your own flat either way, but you cannot usually opt out of shared costs. Your title deeds bind you to contribute your share of maintaining the common parts. Opting out would mean your neighbours subsidising your building's roof, walls, and stair, and the deeds are written to prevent exactly that.
How much are factor fees in Scotland?
There is no single reliable average for the management fee itself, and be cautious of any page that quotes one. What you can plan for is the whole building bill: fee plus communal costs, which in some developments comes to £50 to £200 or more a month depending on what the building has (lifts, grounds, concierge) and what it needs. The right comparison is not "cheap versus expensive" but whether the charges are transparent, whether you can see what they cover, and whether the service behind them is delivered.
Do I need to worry about cladding or fire safety paperwork when buying?
You need to ask about it, which is different from worrying. For buildings with external wall systems in scope, lenders may require an EWS1 form or Single Building Assessment before lending, and Scotland's cladding remediation framework means some buildings are in a formal assessment or works programme. Ask through your solicitor whether the building is affected, whether the fire risk assessment for the common parts is current, and whether any actions from it are outstanding. Clear answers with documents are a good sign in themselves.
Does the factor decide what work happens in my building?
Not unilaterally, in a well-run arrangement. Decisions above agreed authority levels should go to the owners, usually by majority vote under the deeds or the Tenement Management Scheme. Emergency and safety work is the usual exception.
What happens to the float when I sell?
A float held as a credit on the development account should be returned to you, less any outstanding charges, when you sell. Ask the factor to confirm the process in writing when you notify them of the sale.
General information only. Individual title deeds, factoring arrangements and circumstances differ.
AboveBoard Homes is an Edinburgh property factor for owners who want clearer communication, transparent pricing, and a more proactive approach to looking after shared buildings. Thinking about a building you are buying into, or a factor you have just inherited? Get in touch. You do not need to have everything worked out before speaking to us.
