The government has provided further details on how the proposed Landlord Ombudsman service will operate, confirming that landlords could be required to pay tenants compensation of up to £25,000 if complaints are upheld.
The new Ombudsman will be responsible for investigating disputes between landlords and tenants, issuing legally binding decisions and awarding compensation where appropriate. The scheme forms part of the government’s wider plans to strengthen protections for tenants in the private rented sector.
Compensation cap set at £25,000
Speaking in the House of Lords, Baroness Taylor of Stevenage, a minister at the Ministry of Housing, Communities and Local Government, outlined the proposed framework for the service.
She explained that the maximum compensation award of £25,000 has been designed to match the existing compensation limit used by mandatory property agent redress schemes. The government believes this will provide greater consistency across the housing complaints system.
However, tenants who believe they are entitled to more than the Ombudsman can award will still have the option of pursuing additional compensation through the courts.
The government also confirmed that the compensation limit will be reviewed as part of the scheme’s ongoing monitoring process, with an initial review expected within five years of the service becoming operational. Any future changes to the compensation cap will be considered following that assessment.
Implementation still underway
Although ministers have confirmed how the Ombudsman will operate, the government has not yet announced a launch date or published the full rules governing the scheme.
Baroness Taylor said that the Housing Ombudsman Service, which currently deals with complaints from tenants in the social rented sector, will also oversee the new Ombudsman service for private landlords.
Work is continuing on the regulations required to establish the scheme, and landlords will receive advance notice and detailed guidance before membership becomes compulsory.
Closing a gap in tenant protection
According to the government, the new Ombudsman is intended to address situations where responsibility for a complaint lies with the landlord rather than a managing agent.
Currently, letting agents may already belong to a redress scheme, but landlords themselves are not always covered. Ministers believe this creates a gap in tenant protection, allowing some disputes involving landlords to fall outside existing complaints procedures.
The government expects the new landlord service to work alongside current agent redress schemes where appropriate, ensuring complaints are handled efficiently depending on who is responsible for the issue.
A single complaints system
Baroness Taylor also confirmed that discussions with the Housing Ombudsman Service are well advanced and preparations to deliver the new service are already progressing.
The long-term aim is for a single organisation to manage complaints and redress across both the private and social rented sectors, creating a more consistent system for landlords and tenants alike.
While further details are still to be released, the proposed Ombudsman scheme represents another significant change for private landlords, with the potential for legally binding decisions and compensation awards of up to £25,000 where complaints are upheld.
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