New redress scheme plans for PRS landlords

It’s something that has been talked about for the past few years, but on 24th January the Government finally announced firm plans for private landlords to be legally required to become members of a redress scheme, with a fine of up to £5,000 if they fail to do so. This follows a consultation that ran from February until April last year and is part of a wider move to simplify the redress process within the property market, helping to make it fairer and more transparent for everyone.

As it stands currently within the PRS:

• • There is no obligation for landlords to register with a complaints system although some need to be licensed/registered (e.g. Scotland, Wales, N.Ireland and specific schemes in local authorities)
    
    
  • Membership of a trade association is voluntary for letting agents, although many have joined one, e.g. ARLA and RICS
    
    
  • In terms of redress, there is a legal requirement to be members of a redress scheme:
    - The Property Ombudsman or The Property Redress Scheme
    - Deposit protection schemes offer their own third-party dispute resolution 
    - Tenants can complain to trading standards or the local council if they don’t feel their complaint is being heard…

…in short, there are a lot of different routes to complaint and redress, none of which seem particularly straightforward, particularly for more vulnerable tenants. As such, this announcement from the government is bound to be welcomed by tenants.

The Communities Secretary, Rt Hon James Brokenshire MP, gave details on the proposed introduction of the Housing Complaints Resolution Service, a single point of contact where both homeowners and tenants will be able to go for advice and to air grievances when things go wrong.

The release on the GOV.UK website stated: “Establishing a single housing complaints service for all residents – no matter whether they rent or own their home – will prevent people from battling with their landlord or builder to resolve issues on their own and make it easier to claim compensation where it’s owed.”

And, although there is no specific mention of it in this latest announcement, there is still the matter of a dedicated Housing Court, which would give tenants a more accessible route to hold their landlords to account. A consultation on whether this is needed closed on 22nd January and feedback is currently being analysed, so we can expect an announcement later in the year. More information is available on the government website.

As to the impact on landlords, no cost has been suggested yet but it’s likely to be relatively low. The good news is that this is just one more in a series of steps that have been taken over the past few years to weed the rogues out of the market, meaning there should be even less sub-standard accommodation for tenants and a better reputation and more business for professional landlords.