The Government looks set to introduce a compulsory redress scheme for private landlords.
The redress scheme will enable tenants to complain through a ‘housing complaints resolution service’ allowing them to have quick access to resolve problems and issues they face with their housing. The idea being that anyone, no matter what the issue can have a one stop shop to voice their complaint regarding housing. Housing Minister 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.”
The redress scheme will also cover developers and freeholders so that owners have a redress scheme for any issues they experience. Any developers wanting to participate in help to buy will need to be a scheme member by 2021.
Landlords could face a fine of up to £5000 should they fail to sign up for a redress scheme, with the additional possibility that this could be escalated further after multiple offences.
The full consultation outcomes can be viewed here.
Landlords, freeholders and developers should certainly be considering the cost implication of a redress scheme which will clearly need funding. There is already a requirement for letting and managing agents to be member of a redress scheme of which there are currently two to select from. There are concerns that the funding of a redress scheme will inevitably be passed back down to the renter, increasing what they are currently paying to cover the additional expenses of the landlord, in a market that has seen rental prices increase year on year since 2011.
Too much red tape
Landlords must already register the tenancy deposit with a scheme as well as fulfil other obligations such as joining appropriate licensing schemes and although this additional redress scheme might be necessary that perhaps it could be integrated seamlessly with some of the other systems and processes already in place instead of adding yet another burden to landlords. You can find more detail here about the scheme.
David is an authorised High Court Enforcement Officer and our Director of Corporate Governance