Reforming the Private Rented Sector Reform in England | Introduction of a new landlord ombudsman
The 2022 white paper A fairer private rented sector outlines the Government’s plans to introduce a new Landlord ombudsman that all landlords in England must sign up to. As an already well respected impartial provider of dispute resolution services to landlords, tenants and letting agents, TDS has a keen interest in improving dispute resolution in the sector.
In June 2022, the Department for Levelling Up, Housing and Communities (DLUCH) published its white paper “A fairer private rented sector”. Their objective is to fundamentally reform the private rented sector (PRS) and level up housing quality.
The adjudication service provided by tenancy deposit schemes is currently the only ADR service that is specifically designed for private rented sector disputes. It is mandatory for letting agents to belong to a redress scheme but not landlords. Many landlords and tenants have no options for resolving disputes other than courts and tribunals. The Government plans to remove these gaps in the dispute resolution landscape by introducing a new single Private Rented Sector Housing Ombudsman that all landlords must sign up to. This is outlined in the 2022 white paper “A Fairer private rented sector”.
Under the Government’s proposals all landlords will need to join the Ombudsman, regardless of whether or not they use a letting agent. The Ombudsman will have powers to put things right for tenants, including compelling landlords to issue an apology, provide information, take remedial action, and/or pay compensation of up to £25,000.
The Government has recently carried out a pre-market engagement exercise to prepare for the potential procurement of a supplier. TDS has expressed interest in establishing and maintaining the statutory PRS Ombudsman.
The Government also plans to strengthen mediation and alternative dispute resolution to enable landlords and tenants to work together to reduce the risk of issues escalating.
Reforming dispute resolution: Evidence base
Research funded by the TDS Charitable Foundation and Safe Deposit Scotland Charitable Trust, showed that the dispute resolution landscape in the private rented sector is complex and confusing and does not assist many landlords and tenants. There are several different providers of redress so knowing which where to go if you have a housing problem can be difficult and courts and tribunals often present multiple barriers such as cost, complexity and lengthy procedures.
Although landlords and tenants can contact their local authority for assistance, other research funded by our charitable foundations, showed that local authorities approach to regulating the sector varies significantly. Many councils lack adequate resources and staff to respond to complaints and tenants can be reluctant to report an issue in the first place.
TDS Policy Position
TDS welcomes the move towards reforming dispute resolution in the private rented sector. Based on our experience of delivering ADR and early resolution for deposit disputes, we support the wider use of mediation, conciliation and early neutral evaluation techniques to actively resolve complaints early. However, we believe the evidence base for using these techniques within the private rented sector needs to be improved and that consideration should be given to the range of approaches that are available to help landlords and tenants resolve disputes early, not only mediation.
We would welcome clarification on DLUCH’s overarching vision for dispute resolution in the PRS and how the requirement and key objectives for the new Ombudsman fits within this. In particular, more consideration needs to be given to how we can ensure that the system is accessible and that the new Ombudsman does not add to existing complexity and confusion. We are particularly interested in the introduction of a single point of access for all housing redress schemes as one possible solution.
The role and capacity of the wider advice and support landscape has been largely absent from current policy discussions. Drawing on our experience of funding a range of projects within our charitable foundations, we believe these organisations will have a key role in supporting, particularly vulnerable tenants, to access the Ombudsman. TDS believes there should be more advice and support for both landlords and tenants. Linked to the above, more attention needs to be awarded to how tenants will be encouraged to access the new Ombudsman.