Shamplina Speaks - Redress: Should greater accountability be feared?

It goes without saying that any decent landlord wants to provide their tenants with a safe and secure home and to stay on the right side of the law. However complicated that may be when there are estimated to be more than 168 individual rules and regulations that apply to the private rented sector. Being a good landlord can be challenging and it is becoming more and more difficult for landlords to tick every box, especially for self-managed landlords.

As they continue to wait for the Government’s White Paper on rental reform, aimed at providing a better deal for renters as part of its levelling up agenda, landlords are understandably worried about keeping up with all the changes. And many are feeling that the pendulum is swinging too far in favour of tenants, to the detriment of landlords. 

The White Paper, now due in the spring, has been a long time coming. As a result, most landlords will already be familiar with the expected content – a shakeup of the eviction process and the abolition of Section 21, lifetime deposits and the recent revelation that private rented homes will need to meet a ‘Decent Homes Standard’.

Dubbed the ‘biggest change to the rental sector for a generation’, there is no doubt that, once the plans are out, they will bring sweeping reforms to the sector. But should these reforms be feared by landlords?

We will see the full scope of the reforms once the White Paper is released - in the latest Hamilton Fraser podcast Ben Beadle, CEO of the NRLA, warned that landlords should be worrying more about the upcoming energy efficiency targets than proposed rental reforms. My personal opinion is that there will be so many changes that they can’t all come in at once. But one thing we know already is that the Government is planning to change how landlords can be held to account, through the introduction of a mandatory redress scheme for landlords and establishing a landlord register. England is the only country in the UK that doesn’t currently require landlords to be either registered or licensed, so it’s no big surprise that this is on the table. 

I would argue that just one scheme is necessary and that if a landlord redress scheme was introduced, this would de facto be a landlord register.

I would also argue that the introduction of mandatory landlord redress is not something to be feared by the majority of landlords who are decent, compliant and professional, or use a qualified agent. But the fact of the matter is, there is a significant number of amateur landlords attempting to self-manage, who simply aren’t up to the job. What’s more, many of them are blind to their own short comings. But managing a tenancy these days is not for the faint hearted, and tenants who are renting direct from landlords don’t currently have any come-back when things go wrong.

Lettings and property management agents have been required by law to join a government approved redress scheme since 2014. The Property Redress Scheme (PRS), part of the Hamilton Fraser Group, has been providing redress to consumers – landlords and tenants - since then on a range of issues, from poor agent service to repairs not being done on time. If agents have to be members of a redress scheme, why not landlords?

Previous attempts by government to find a solution to the implementation and delivery of landlord redress have been unsuccessful, yet there are many organisations with the skills and expertise to offer a solution.  The two letting agent redress schemes - the PRS and the Property Ombudsman, and government authorized deposit protection schemes such as mydeposits, are experienced at running effective schemes that provide complaint resolution. The PRS also set up a tenant mediation service during the pandemic to help with rent arrears as an alternative to courts, and this also works for resolving other tenancy issues, such as disputes over repairs.

Implementation and delivery aside, the bigger challenge facing mandatory landlord redress could be getting buy in – landlords will need to see a redress scheme as a mutually beneficial way of solving grievances, rather than just a ‘big stick’ regulation way of solving disputes. 

Judging by how long it has taken for the 2007 legislation around deposits to bed in, getting landlords to sign up to a mandatory redress scheme might not be straightforward. Will a self-managed landlord with one property, who doesn’t see themselves as a landlord, understand that they need to belong to a redress scheme, by law? Would there be fixed penalty notices for non-compliance?

Of course, there will need to be clarity about what a tenant can make a complaint about, to distinguish between true or spurious grievances, and how this links to the abolition of Section 21 and other legislation – a deposit dispute wouldn’t come under redress, and landlords would need to be protected against spurious complaints aimed at avoiding paying the rent.

Realistically the most common grievances would be around carrying out repairs in a timely fashion, gaining access, landlords not dealing with issues in the property and regulatory issues the landlord hasn’t abided by. The process will need to incorporate help and advice from the outset on what landlords should do to protect themselves. 

I think, if done properly, landlord redress would provide sufficient recourse for tenants and mean tenants can rent directly from landlords with confidence, without the need for landlord registration as well. And it would be a better means of collecting data, which is all landlord registration would really achieve.  Landlord redress can only be good for the industry - the challenge lies less in the implementation and more in shifting landlords’ mindsets into recognizing that being part of a redress scheme is about being a professional landlord and understanding that the tenant is the customer.

Landlords who self-manage are going to have to accept that their tenants will have the right to mandatory redress in the future. It won’t be long before tenants are asking landlords, ‘who is your redress scheme provider?’, so landlords need to be able to answer this question, or explain that they are fully managed by a letting agent and know who their redress scheme provider is. For agents there is an opportunity to upsell their fully managed service from let only because let only landlords will still have to be part of a redress scheme. It you don’t have time to self-manage, the answer is to use a letting agent on a fully managed service. But make sure you do your due diligence on the agent! 

* Paul Shamplina is founder of Landlord Action, Chief Commercial Officer at Hamilton Fraser, and is on Channel 5's "Nightmare Tenants, Slum Landlords” *

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