The Private Rented Sector Ombudsman

The Renters' Rights Act proposes a new Private Rented Sector Ombudsman. While joining will be compulsory for landlords, agents also need to stay vigilant.

Proposed changes

Landlords will be required to register with the PRS ombudsman scheme.

A REQUIREMENT FOR LANDLORDS

A PRS ombudsman has been on the agenda for some time, having been initially proposed in the Conservative government’s Renters Reform Act.

The incumbent Labour Government is also pressing ahead with this, planning to make it a legal requirement for all private landlords to register with the Private Rented Sector Ombudsman scheme.

This is regardless of whether they manage properties themselves or through an agent. 

As opposed to the likes of Section 21 and periodic tenancies, there will be “significant lead-in time” before the Ombudsman is introduced.

A NEW REDRESS SCHEME

Currently, private tenants can make complaints via two redress schemes:

1. The Property Ombudsman (TPO) - an independent, not-for-profit organisation

2. The Property Redress Scheme (PRS) - a government-authorised consumer redress scheme

However, they can only use these to complain about letting agents, not landlords. This raises a couple of issues. 48% of landlords who do work with an agent can refuse the requests the agent makes on the tenant's behalf. This puts agents in a tricky spot and makes it difficult to find a resolution for the tenant.

The new Ombudsman is designed to address these systemic issues.

Implications

Tenants will be able to solve issues more easily, while landlords and letting agents face fines and more for non-compliance.

RESOLVING ISSUES WITHOUT GOING TO COURT

Tenants will be able to get “quick, fair, impartial and binding resolution for tenants’ complaints about their landlord.” They’ll be able to complain about anything a landlord has done or failed to do that has caused them harm, stress, or inconvenience (although valid issues have yet to be defined).

£40K FINES FOR REPEATED BREACHES

All private landlords must join the new Private Renters’ Ombudsman scheme, whether they manage properties themselves or use an agent. The government insists that fees will be kept proportionate and low.

Failure to register can result in civil penalties of up to £7,000, and repeat offences may lead to fines of up to £40,000 or even criminal prosecution.

Letting agents risk the same fines if their landlords don’t register

WHAT WE AS AGENTS NEED TO DO NOW

Soon, all landlords will be required to join the new PRS ombudsman scheme.

Agents who work with unregistered landlords will face fines and may even be banned from operating.

Here’s how you can get ready now:

Understand the requirements You and your landlords should familarise yourselves with the Ombudsman’s role, rules, and how complaints will be handled.

Update our complaints process A clear, fair, and accessible complaints procedure may help prevent complaints from getting to the level where the Ombudsman is needed.

Educate landlords Ignorance will be no excuse. Ensure your landlords know what’s required of them once the Ombudsman scheme launches. 

EXPULSION RISK

If a landlord ignores the Ombudsman's decision, they may be expelled from the scheme, preventing them from legally renting out properties. The Ombudsman's rulings can also be enforced through the courts, and tenants may be awarded a Rent Repayment Order (RRO) for up to two years' rent. The government is doubling the maximum RRO period to increase its deterrent effect.

Agents will no longer have to act as the middleman during the complaint process, as landlords will be directly accountable for tenant complaints. This means the burden of handling disputes will be shared.