Note: Articles on the Renters’ Rights Bill will be continuously updated as details emerge
Last updated 16 September 2024
Note: This section was published on 16 September 2024 following the first reading of the new Bill in Parliament on 11 September 2024
The new and revamped Renters’ Rights Bill was introduced to the Commons for its first reading on 11 September 2024 by the new Labour Government.
Although the Bill is very similar in substance to the previously introduced Renters (Reform) Bill by the Conservative Government, there are some subtle differences.
The Bill retains the introduction of a new ombudsman, which all private landlords in England with assured or regulated tenancies will be required by law to join, including those who use a managing agent.
This is aimed at supporting quicker and cheaper resolution when there are disputes – preventing them escalating to costly court proceedings by providing fair, impartial and binding resolution, to both landlords and tenants and reducing the need to go to court.
The ombudsman will be expected to resolve consumer disputes on a number of matters, including whether it is reasonable for a landlord to prevent a tenant keeping a pet at the property.
The ombudsman will also be able to offer tenancy mediation to landlords and tenants to resolve disputes when initiated by landlords. This is a service already offered by the Property Redress Scheme’s Tenancy Mediation Service, who may be able to link directly with the new ombudsman.
The Bill includes robust enforcement measures for the ombudsman service. Local councils will be able to take action against landlords who fail to join. This will include civil penalties of up to £7,000 for initial breaches and up to £40,000 or criminal prosecution for continuing or repeated breaches. Tenants will be able to seek rent repayment orders against their landlord if the landlord commits an offence by persistently failing to join the ombudsman service.
Read on for more background to the proposals on the ombudsman.
Note: this section was published on 22 May 2023 following the introduction of the previous Bill to the Commons on 17 May 2023 and is still relevant after the introduction of the Renters Rights Bill on 11September 2024 subject to a couple of minor amendments as noted.
One of the more interesting areas of the reforms within the Renters (Reform) Bill, for landlords, is the new ombudsman, which the Government has said is likely to be a single organisation overseeing complaints. This will be designed so that disputes between tenants and landlords can be settled quickly and cheaply, without going to court.
The new ombudsman for landlords will be in addition to the two schemes that exist to handle complaints by tenants and landlords about letting agents – The Property Ombudsman and the Property Redress Scheme. These government-approved schemes arbitrate complaints and offer binding redress. They are compulsory for agents to join if they want to trade legally, and agents must comply with each scheme’s adjudicator-led decisions.
Sean Hooker, Head of Redress at the Property Redress Scheme said, “We agree with the principle of a single route for tenants to access effective and affordable complaint resolution.”
“I cannot see how trying to solve the issue of consumer confusion, by introducing yet another ombudsman, is practical or will benefit anyone. Instead, integrating landlord redress and plugging the gaps - such as rent to rent - into the existing process, incorporating mediation but having a single, accessible entry point, with assistance guidance and signposting is the way forward.”
- Sean Hooker, Head of Redress And Ombudsman Office at The Property Redress Scheme
Membership of the new ombudsman will be a legal requirement for landlords, and local councils will be able to take enforcement action against those who fail to join. This will range from a civil penalty of up to £7,000, through to a £40,000 fine (these amounts have increased in the new Bill), with the possibility of criminal prosecution and a Banning Order for repeat offenders. There will be a fee for membership, which has not yet been confirmed.
The intention is that this system will be aligned with registration on the Privately Rented Property Portal, so landlords only have to submit their information once.
Following the introduction of the original Bill to Parliament on 17 May, Sean Hooker discussed the Ombudsman in his blog for LandlordZONE. He points out that what the Government announced they are putting forward, both in their fairer renting white paper and their press release just before the Bill went live, differs slightly from what is actually in the Bill’s wording.
The Government’s press release said, “A new Ombudsman will provide quicker and cheaper resolutions to disputes, while a new digital Property Portal will enable landlords to understand their obligations and help tenants make better decisions when signing a new tenancy agreement. This will give confidence to good landlords, while driving the criminal minority out of business.”
Sean explains, however, that
“the Bill says they may introduce landlord redress schemes and a private rental sector database and confers powers on the Secretary of State to procure these provisions in a manner they see fit. We will therefore get both a register and redress, but when and what this will look like remains to be seen.”
Sean, who has had a lot of input with the Government on the introduction of landlord redress and the form landlord registration will take, believes these are positive changes that help address the gap in dispute resolution for tenants whose landlords do not use an agent, or where the issues fall under the obligations of the landlord and not their agent. He also highlights that the final details of what will be put in place have yet to be revealed and the Government is still working on the model.
“We at the Property Redress Scheme will work with them to help develop a joined up and easily accessible system that helps raise standards in the sector and provides the reassurance and protection to the tenant that is needed.”
UPDATE AFTER THE NEW BILL WAS INTRODUCED:
“Of particular interest to me, is the recommitment to landlord redress and the provision in the new Bill is absolutely identical to the defunct Renters (Reform) Bill. The only significant change will be a hike in the fines for not joining a scheme.”
How the system will be set up is still wide open and the ultimate decision will be with the Secretary of State.
It could be one or many schemes, an existing scheme or schemes or totally new players. Watch this space.
The guidance says the Government will pursue the most appropriate route for designating or approving an ombudsman scheme and that there is likely to be a small fee to the landlord for each property covered.
Sean Hooker, Head of Redress at the Property Redress Scheme
