New mandatory landlord redress scheme and database for private sector landlords and tenants

This final ebriefing of our series focuses on the proposed introduction of landlord redress schemes and the private rented sector database set out in Part 2 of the Bill.

Just to note, the Bill is working its way through Parliament, so the provisions are liable to change. This ebriefing sets out the position as of today’s date (31 May 2023).

Which occupancy agreements does Part 2 of the Bill apply to?

The measures introduced by Part 2 of the Bill will apply to:

• assured tenancies under the Housing Act 1988; and
• regulated tenancies under the Rent Act 1977.

granted by:

•  private sector landlords; and
•  registered provider landlords of accommodation that is not social housing (i.e., market rent lettings)

(relevant tenancies).

Part 2 of Bill will therefore not apply to:

• assured tenancies of social housing accommodation granted by registered provider landlords;  
• periodic contractual tenancies;
• licences to occupy housing; and
• long leases.

(Although there is scope within the Bill for Regulations to be made, to bring some of these occupancy agreements within the scope of a relevant tenancy.)

Landlord Redress Scheme

The Bill makes it mandatory for all residential landlords of relevant tenancies (landlords) to be a member of a government-approved landlord redress scheme (a scheme).

It is the government’s intention to only approve one scheme, understood to be an ombudsman, which will provide for the independent investigation and determination of complaints against member landlords by or on behalf of prospective, current or former tenants about their proposed, current or former residential tenancy.  

It is not yet clear what will constitute a complaint under the Bill, but it is proposed that regulations are to be made dealing with:

• the requirement for landlords to be a member of a scheme before marketing a property to be let on a relevant tenancy;
• the types of complaints that may be made;
• the time to be allowed to resolve the issue before making a complaint;
• the circumstances where a complaint may be rejected;
• the payment of fees relating to membership in a scheme;
• the types of redress that landlords will be ordered by the scheme to provide to complainants including: providing an apology or explanation and paying compensation.
• Enforcement and decisions of the scheme;
• landlords to be expelled from the scheme; and
• decisions under the scheme to be enforceable as if it were an order of a court or tribunal.

The full extent and effectiveness of the scheme is therefore yet to be determined and will be set out in the regulations which will follow. It is though clear that the introduction of the scheme will bring parity with other housing tenures and ensure that a wider range of residents have access to a redress service, which it is anticipated will be quicker, cheaper, less adversarial, and more proportionate than the court system.

Private rented sector database

The Bill also proposes a new private rented sector database (the database), aimed to support the future digital privately rental property portal service (the property portal).

The database, once introduced, will be required to contain the following information:

• details of a person who is or intends to become a landlord (an active landlord entry);  
• details of any property which is, or is intended to be, let under a relevant tenancy (an active dwelling entry);
• details of any landlord who has received an order banning them from letting housing (a banning order), or who has been convicted of a banning order offence or who has a received financial penalty in respect of a banning order offence or other relevant conviction/financial penalty.

The Bill will mean that all landlords will need to have active landlord entries in the database as well as active dwelling entries for all properties they let under relevant tenancies.

In addition, all landlords must have active landlord and dwelling entries before marketing a property intended to be let under a relevant tenancy.

Much of the detail is still to be confirmed but the Bill provides for regulations to be made including:

• making entries in the database (including payment of fees by the landlord);
• keeping database entries up to date;
• verification, correction and removal of Database entries; and
• who has access to the information in the Database and what information will be made available to the public.

The exact information that will be publicly available on the database via the property portal is therefore yet to be determined and will be set out in regulations which will follow.

It is however anticipated that the database (as part of the property portal) will result in:

•  tenants being provided with greater transparency and information before deciding on whether to rent a property and throughout the duration of their tenancy agreement; and
•  local councils having access to information to assist them to identify the identity of landlords of poor quality/non-compliant properties, which will enable a more streamlined approach to enforcement action against such landlords.

What penalties can be imposed under Part 2 of the Bill?

Landlords who breach the relevant sections of Part 2 of the Bill can:

• receive a financial penalty of up to £5,000 for an initial breach; or
• commit a criminal offence if there is a continued or repeated breach, where a financial penalty of up to £30,000 can be issued as an alternative to prosecution.

Comment

Much of the detail is still to be confirmed but it is evident that these measures are part of a wider package of reforms designed to tighten up the regulation of private sector lettings.

It will be interesting to see the impact the Bill has on the private rented sector, amid concern that the Bill could result in some responsible landlords exiting the sector.

Landlords must ensure that they are ready for the new regime when it does come into force. We will be providing further updates here as the Bill progresses.

Registered provider clients should note that whilst these measures will not apply to the provision of social housing lettings, the measures will still apply in relation to any market rent assured tenancy arrangements. 

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Renters Reform Bill webinar – Part one

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Renters Reform Bill webinar – Part two

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For more information, please contact Jabir Dar, a solicitor in our housing management team.

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