Few documents cause more quiet frustration than a factoring invoice. It arrives quarterly, the total moves around, and the line items can read like another language. This guide breaks down what each part of a typical Scottish factoring invoice means, what you are entitled to ask about, and how to judge whether you are getting value.
One principle before the detail: every fee should be understood, not simply inherited. If a line on your invoice cannot be explained, that is a communication failure, whoever your factor is. The Property Factor Code of Conduct requires factors to be transparent about charges and to keep financial records that support them. You are allowed to ask.
The two different things on your invoice
Most confusion about factor fees comes from mixing up two very different numbers:
The management fee is what the factor charges for its own work: coordinating repairs, managing contractors, running the accounts, arranging insurance, communicating with owners, chasing arrears. It is the factor's income.
Communal costs are what the building itself costs to run: cleaning, gardening, electricity for the stair lights, lift servicing, insurance premiums, repairs. This money passes through the factor to contractors and suppliers. It is not the factor's income.
A factor with a modest management fee can still preside over expensive communal costs if procurement is lazy. Equally, a slightly higher management fee can be the better deal if it buys real oversight that keeps contractor costs honest. Judge the whole invoice, not just the fee line.
Line by line: what you are likely to see
Management fee
Usually a fixed amount per property, billed quarterly. Check your Written Statement of Services for exactly what it includes. Common inclusions are routine communications, arranging maintenance, financial management, and insurance administration. Common exclusions, charged separately, are major works project management, paper copies of documents, and administrative support when you sell.
Cleaning, gardening, and routine services
Recurring contracted services, typically billed at cost and split between owners according to your title deeds. Reasonable questions to ask: when was this contract last reviewed or benchmarked, and what is the schedule of visits?
Communal electricity
Stair and landing lighting, door entry systems, lift power, car park lighting. Usually modest per owner, but worth glancing at. A sudden jump can indicate a tariff lapse or a faulty installation.
Buildings insurance
In most developments the whole building is insured under one block policy, and each owner pays a share of the premium. Two things you are entitled to know: what the policy covers (ask for the schedule and the certificate) and whether your factor takes commission on the premium. Commission is common in the sector. AboveBoard takes none, because a factor that earns a percentage of the premium has a quiet reason to prefer a bigger premium. Whoever your factor is, ask the question.
Repairs and maintenance
Individual jobs: a leaking downpipe, a failed door closer, a blocked drain. Each entry should say what was done, where, and what it cost. If a repair line is vague, ask for the works order or contractor invoice behind it. The Code of Conduct entitles you to clarity about how your money was spent.
Lift, plant, and equipment servicing
If your building has a lift, expect regular servicing charges plus periodic inspection fees. These are normal and necessary. Our guide on the true cost of lifts explains what is routine and what should prompt questions.
Float or sinking fund contributions
A float is working money, held as a credit so the development can pay for repairs without waiting for every owner to pay in. A sinking fund is long-term savings for major future costs. They are different tools and your invoice should keep them distinct. Full explanation in our guide to sinking funds and floats.
Late payment or administration charges
If these appear, the Code of Conduct says any charge for late payment must relate to actual cost and must not be punitive. A factor also cannot apply interest to a debt that is genuinely in dispute and before the First-tier Tribunal.
How costs are split between owners
Your share is set by your title deeds first. Deeds may specify equal shares, shares by floor area, or a formula. Where the deeds are silent, the Tenement Management Scheme under the Tenements (Scotland) Act 2004 provides the default: usually equal shares, unless one flat is much larger than the others. If your share seems wrong, the productive question is specific: "Which deed clause or statutory rule sets my percentage?" A competent factor should answer with a source, not a shrug. More detail in who pays for what.
Five signs of a healthy invoice
- You can tell the management fee apart from communal costs at a glance.
- Repairs are itemised, with location and description, not bundled into "general maintenance".
- Insurance is transparent: premium visible, commission position stated.
- Your apportionment is stated or easily traced to the deeds.
- The invoice matches what you were told to expect. Planned work should have been communicated before it appears as a charge.
Five reasonable questions your factor should answer
- What does the management fee include, and what is charged separately?
- When were our recurring contracts (cleaning, gardening, insurance) last reviewed against alternatives?
- Do you receive commission or any benefit from our insurance or contractors?
- Can I see the contractor invoice behind this repair charge?
- What is our float balance and how has it moved this year?
None of these are hostile questions. A factor confident in its numbers will answer them plainly. Persistent evasion tells you something too.
When fees feel too high
"Too high" needs a benchmark, and here honesty matters: there is no official average factoring fee in Scotland, so treat any confident industry average with scepticism. The better tests are:
- Transparency. Can you see what you are paying for, line by line?
- Linkage. Does each charge connect to a service actually delivered?
- Procurement. Are contracts challenged and benchmarked, or rolled over year after year?
- Outcomes. Is the building actually well maintained, with problems caught early rather than firefought late?
A cheap fee attached to a deteriorating building is not value. This is not about cutting service. It is about removing inefficiency.
If, after asking questions, you believe charges breach the Code of Conduct, use the factor's complaints procedure first. If that fails, any individual owner can apply to the First-tier Tribunal (Housing and Property Chamber), which can order repayment or corrective action.
Frequently asked questions
Why is my invoice different every quarter?
The management fee is usually stable, but repairs and services vary with what the building needed. A wet winter means more gutter and roof callouts. Check the itemised repair lines; they should explain the movement.
Can the factor charge me for work I did not agree to?
For routine maintenance within agreed authority levels, yes; that is what the factor is appointed to do. For larger works, owners should be consulted and decisions made per your deeds or the Tenement Management Scheme, usually by majority. Emergency and safety work is the standard exception, and rightly so.
Do I have to pay if I am unhappy with the service?
Withholding payment is risky and usually counterproductive, because your neighbours end up covering the shortfall and arrears can escalate to recovery action. The stronger route is to dispute the specific charge in writing, use the complaints procedure, and escalate to the Tribunal if needed. Note that a factor should not apply interest to a genuinely disputed sum while a Tribunal case is live.
What is a float and why did I pay one when I moved in?
It is working capital for your development, held as a credit against your account so repairs can proceed without a whip-round. It should be returned, net of anything owed, when you sell. See our float and sinking fund guide.
My neighbour pays less than me. Why?
Almost always apportionment: your title deeds may split costs by floor area or a set formula rather than equally. Ask the factor to cite the clause. If the deeds are silent, statutory default rules apply.
General information only. Individual title deeds and circumstances differ.
AboveBoard Homes is an Edinburgh property factor built around transparent invoicing: itemised charges, no insurance commission, and fees that reflect the work involved. If your current invoice raises more questions than it answers, get in touch. We are happy to explain what good looks like.
