The government has revealed details of how the Landlord Ombudsman service will work – and once again it involves huge potential expense for landlords.

The Ombudsman would investigate disputes, issue binding decisions and could award compensation of up to £25,000.

Labour’s Baroness Taylor of Stevenage – a minister in the Ministry of Housing, Communities and Local Government – has revealed the framework of the new service in the House of Lords.

On the subject of compensation she comments: “This has been designed to align with the established cap for mandatory property agent redress, helping to support that consistency across the housing redress landscape. 

“Of course, tenants will still be able to seek a remedy through the courts if they believe a higher award is justified. 

“We will keep the operation of the scheme, including the compensation cap, under review as part of our wider governance, monitoring and evaluation arrangements, with an initial review required within five years of the scheme being approved or designated. 

“This will inform any future decisions on whether changes to the cap are necessary.”

No exact details of the scheme’s rules nor its start date have been released, but the minister told a Lords committee: “The Housing Ombudsman Service, which provides redress to tenants in the social rented sector, will deliver the new private rented sector landlord ombudsman service, promoting consistency in redress across the sectors. 

“We will continue work to implement the service, including developing the further regulations required and setting up the service. We will give landlords sufficient notice and clear guidance before any future requirement to join the scheme comes into force.”

She goes on to say: “It is intended that this new framework will fill the gap faced by private renters, specifically where the responsibility for an issue lies with the landlord rather than the agent. 

“It is not right for a landlord to be able to get away from their responsibility because it is the agent that is part of a redress scheme. 

“We expect co-operation between the new service and the existing agent redress scheme where appropriate.”

She continues: “I met with the social housing ombudsman … and plans for delivering this service are well advanced. I know that they are working towards the practical delivery of this scheme. 

“The expectation is that, ultimately, a single organisation will administer redress across both private and social rented sectors.”