At the end of last month, the Communities Secretary James Brokenshire finally announced that private landlords will be legally required to become members of a redress scheme – or face a fine of £5,000 if you fail to do so.
This new initiative reflects earlier changes made to the lettings sector, where from October 2014, it became a requirement for all letting agents in England to become a member of a redress scheme.
The Rationale for the Scheme
The new scheme has been some time coming and well trailed. Last year Citizens Advice called for the introduction of a free and independent way for tenants to make complaints, in the form of an alternative dispute resolution system, across the private rented sector.
Gillian Guy, chief executive of Citizens Advice, said at the time: “Renters living in squalid or unsafe homes have limited options when landlords let them down. Tenants whose landlords dispute the need for essential repairs or improvements often end up having to pay out of their own pocket - and some fear being evicted in retaliation. Currently the time, complexity and cost of taking a rogue landlord to court means that this is a route taken by just one in 100 private tenants.”
As of today lettings agents must be member of either The Property Ombudsman (www.tpos.co.uk) or the Property Redress Scheme (www.theprs.co.uk).
Currently, landlords have no such obligation to register with a complaints system but this is now set to change...
The new scheme
The brand new ‘Housing Complaints Resolution Service’ will be developed with a new Redress Reform Working Group made up of representatives from across the sector, working with the industry and consumers to make it easier for people to claim compensation.
Launching the new plans, Communities Secretary James Brokenshire commented:
“The proposals I have announced today will help ensure all residents are able to access help when they need it, so disputes can be resolved faster, and people can get compensation where it’s owed.”
“It comes as no surprise that private landlords will, as letting agents already must, become members of a redress scheme. The fine of up to £5,000 for failing to do so is in line with what letting agents are charged, which, for once, signals consistency in Government policy.
At time of writing no date has been set for the introduction of the new rules but we’ll keep all our customers – landlord and renters – up dated as and when we know more.
Our HomeRenter team view
Personally, we believe this is a really positive step, not only in enhancing the protection on offer for millions of renters across the country, but also for recognizing that being a landlord is a serious endeavor with real responsibilities.
Our hope is that it will also help to encourage landlords to focus on customer service and building relationships with their tenants, which from our own research we know is both easier when landlords and tenants transact direct and cut out the middleman.