A warning was sent out to owners of self-catering accommodation businesses yesterday to seek legal advice if they are unsure about their factoring responsibilities.
Sheriff Patrick Hughes was speaking at Oban Sheriff Court after dealing with the case of 69-year-old John Christlieb, director of Melfort Pier Holidays Ltd.
Mr Christlieb, of Melfort Pier, Kilmelford was on trial accused of acting as a property factor while unregistered.
He pleaded not guilty and the case against him, the first of its kind, was found to be not proven.
The court heard in written submissions that Mr Christlieb and his wife Etonella, 68, sold five of their 18 houses at Melfort Pier and continued to operate the remainder as a holiday lets business.
They continued to maintain and upkeep the land and charged the owners of the private houses a fee.
The sheriff found that Mr Christlieb “had reasonable excuse” for believing that he did not require to be registered.
Outside of court Mr Christlieb said: “The judgement that has been handed down affects Gleneagles with its 52 houses, Melfort Club with its 32 houses and Cameron House by Loch Lomond. They are all residential properties in terms of the Act.”
He said it would impact on all other self catering businesses in Scotland.
The action was raised under Section 12 of the Property Factor Scotland Act 2011.
Sheriff Hughes said that Melfort Pier Holidays qualified as a property factor.
He said that while the five properties might not be inhabited all year round, they were all classed as residential properties.
He said: “If the five properties did not exist the land would still need to be maintained. I am satisfied the maintenance and management of the land is being done by Melfort Pier in the course of its business.”
However the sheriff said it was clear the arrangement with the five properties pre-dated the act.
He said: “When they became aware of the act Melfort Pier made inquiries and consulted with the Scottish Government. The government didn’t have a definitive answer.”
The sheriff said the company was mistaken to think it did not require to be registered as a factor. But he added: “I understand the reasons why this mistake could be made.
“The 2011 Act is a significant piece of legislation. There may well be other people or businesses who may find themselves in the same position.
“If anyone is in doubt about their applicability they are advised to take legal advice at the earliest stage.”
