Renters Rights Bill – Blog Three: The Landlord Ombudsman

The Renters Rights Bill continues to reshape the private rented sector (PRS) with significant reforms aiming to improve transparency and accountability for tenants and landlords alike. As proposed under the last Renters Reform, the Government will introduce a new Private Rented Sector (PRS) Landlord Ombudsman Service. All private landlords in England with assured or regulated tenancies will be required by law to join,

What is the Landlord Ombudsman

The proposed PRS Landlord Ombudsman Service is designed to address tenant complaints about landlords, free of charge. It will be a legally required service that all private landlords in England, including those who use managing agents, must join.

Key Features of the Service:

• Fair and Impartial Resolution: The Ombudsman will handle complaints free of charge for tenants, offering a binding decision on disputes.
• Wide-Ranging Powers: The Ombudsman will be able to:
• Compel landlords to issue apologies.
• Require landlords to provide necessary information.
• Mandate remedial actions or payment of compensation.

The service aims to promote accountability in the rental marketing whilst providing tenants with a trusted and accessible resource for addressing grievances.

Benefits for Landlords 

For most, the primary focus of the Ombudsman is to assist tenants, landlords will also benefit from having access to a structured dispute resolution mechanism.

• Cost-Effective Resolution: Landlords can use the service to resolve disputes quickly without needing to resort to costly legal proceedings.
• Mediation Options: The government is exploring landlord-initiated mediation, allowing landlords to proactively address issues with tenants.

Landlords will need to comply with any decisions made by the ombudsman. Non-compliance may result in a landlord being expelled from the scheme and local authority enforcement action as below.

Compliance and Enforcement

Non-compliance with the Ombudsman scheme carries significant consequences for landlords. Local councils will undertake the enforcement of the measures which include:

Civil penalties: Landlords may be facing fines of up to £7,000 for initial breaches and up to £40,000 or criminal prosecution for continuing or repeated breaches.

Rent Repayment orders: Tenants will also be able to seek rent repayment orders against their landlord if the landlord commits an offence by persistently failing to join the ombudsman service.

Additionally, landlords may be expelled from the scheme for serious breaches, however, landlords may be reaccepted by the ombudsman service if they take the necessary steps to become compliant.

Timeline for Implementation

The government plans to implement the PRS Landlord Ombudsman Service shortly after the Renters Right Bill becomes law. A specific compliance date will be announced, and landlords provided with a deadline to comply. To fund the service, it is anticipated that landlords will likely pay a small annual fee to cover the cost for the running of the service.  The service will not allow landlord to complain about tenants but will allow landlord access to the service for dispute resolution. The service has stated they are exploring options for landlord-initiated issues to be resolved with tenants.

How does the Existing Ombudsman Work with Existing Schemes

Complaints about Letting Agents will continue to be made via the existing agent redress schemes. Should the landlord and agent both receive complaints, the Renters Right Bill will allow the PRS Landlord Ombudsman to work with the existing agent redress schemes to conduct joint investigations and, where appropriate, issue joint decisions.

What This Means for Tenants and Landlords

The introduction of the PRS Landlord Ombudsman is a significant step forward in creating a fairer rental market.

For Tenants:

• A free and impartial process for resolving complaints.
• Protection against landlords who fail to comply with the scheme.
• Greater accountability and improved rental experiences.

For Landlords:

• Access to structured dispute resolution and potential mediation services.
• Clarity on how to address tenant complaints effectively.
• Penalties for non-compliance encourage consistent standards across the sector.

Conclusion

The proposed PRS Landlord Ombudsman Service is a focal point of the Renters Rights Bill. By creating a transparent and accessible portal to handle complaints easier, the government looks to improve and create better relationships between tenants and landlords.

As we await further details on implementation, we recommend all landlords start preparing for these upcoming changes. Reach out to our Lettings team today for advice on how your rental opportunity may be affected.