Are you prepared for the update to your legal requirements as a Landlord to be part of a redress scheme? If you want to avoid a £5000 fine, you need to be! Follow the steps below to stay out of hot water!
In what could be described as the latest in a series of middle fingers to private landlords and a demand to pay more, the communities secretary, the “Rt Hon” James Brokenshire has announced that private Landlord’s will now be required to register with a property redress scheme.
But what is a redress scheme, how do they work, and how do you join one to avoid the fines? I’m going to spell all this out for you to help you stay on the right side of the law.
What is a Redress Scheme?
Up until now, property redress schemes have only been the domain of agents in the property world with each of them required to register to conduct business. In essence, a redress scheme is a bit like a mediation service. It is an independent voice that you can go to to escalate a complaint that is not being dealt with in a satisfactory manner by the landlord or agent you are complaining to.
How do Redress Schemes Work Currently?
The PropertyRedressscheme.co.uk is just one of the many existing redress schemes that Agents are required to join. They describe the process of how they handle complaints when they are made against an agent:
Firstly. In order for them to consider a complaint in the first place the following points must apply:
- The person being complained about must be a member of their scheme
- There must be a written complaint to the agent within the last 12 months
- It is at least 8 weeks since the complaint was submitted and the person you are complaining about still hasn’t resolved the issue.
Once a complaint meets those criteria, the redress scheme will then consider the complaint against the following criteria:
- Is there a legal obligation on the person being complained about to fulfil the request of the person complaining (For example if they hadn’t completed the necessary gas safety checks at the property)
- Have legal rights of the tenant been impinged?
- Has the agent acted in line with the code of practice it agreed to when becoming a member of the redress scheme?
- Has the agent carried out a transaction in a way it would be expected to?
- Has the agent acted unfairly, including examples such as being rude or aggressive, failing to explain things properly, incompetence in service, incurred avoidable delays?
The agent’s actions must also have resulted in a financial loss, aggravation, distress or inconvenience for the tenant.
Once the complaint is assessed against this criteria, and found to be genuine then the process will progress like this:
- The complaint handler will send details of the complaint to the landlord or agent in question to allow them to try to resolve the compliant privately. As a landlord you will have 10 working days to do this. If it is not possible then you have a further 10 working days to send you evidence to the scheme for why you don’t think resolution is possible.
- If you still don’t agree then the complaint handler will set out a plan for what they think is a fair route to resolution. This will take 15 working days. If there is still no resolution then the case progresses to point 3.
- The redress scheme will then provide a full analysis of the complaint and evidence for why they have recommended their proposed decision.
- Both parties will then be bound by the final recommendation of the scheme.
What is Changing
Under the plans that are announced today, private landlords will also be required to join a single redress scheme called the “Housing Complaints Resolution Service” which will be quickly accessible by homeowners and tenants when things go wrong, such as unresolved maintenance issues by landlords or property developers of new build properties. If a private landlord fails to join a redress scheme, presumably this HCRS that they are discussing, then they will be slapped with a £5000 fine… ouch!
There isn’t currently much detail on exactly how the system will work or what it will cost but if it’s anything like the existing scheme for agents then it’s likely to be a couple of hundred pounds for you to register (yes they found yet another way to reach into your pockets!), and will likely operate in a similar vein as the process descried above.
Balanced View of This Legislation
So I’m sure you’ve picked up on my pretty cynical tone towards this new move but let’s look at the balanced view.
One the one hand, yes this is just another move in a long list of moves that this government has made to make life more difficult for private landlords, increasing the requirements on them and finding what is likely to be yet another way of charging them for nothing.
Yet, when you’re running a property business this is likely to be one of the easier things to comply with and to be fair it will make it much harder for rogue landlords to get away with treating their tenants like to cash machine without providing good accommodation, and anything that makes their lives harder is good in my book.
My concern is that the system could be open to abuse for tenants. Property law already strongly favours the side of the tenant so I worry whether this could end up being just another tool that bad tenants could use to make things difficult for landlords and draw processes out. I guess that’s going to come back to having a solid tenant selection process for taking people on.
Let’s see what they come up with when they release more detail on the scheme and put forward the legislation to go with this.