Blog: Why landlord redress makes sense in this day and age
Paul Shamplina, founder of NRLA recognised suppliers Landlord Action and Chief Commercial Officer at NRLA partners Hamilton Fraser Total Landlord Insurance, writes about rental reform and Landlord Redress.
I do not need to remind the seasoned landlords out there that the buy-to-let market has seen massive regulatory change in recent years, particularly during the pandemic with eviction suspensions and extended notice periods, as tenants struggled to pay their rent.
There are already over 150 pieces of legislation to comply with and with every passing year, buy-to-let investors appear to be jumping through more and more regulatory hoops. This year will be no different, with the rental reform White Paper, part of the Government’s levelling up plan, due in the spring, which is set to bring sweeping reforms to the sector including the abolition of Section 21, a national register of landlords and a decent homes standard. It has been a long time coming, but mark my words, once the plans are out, the changes will happen a lot quicker than people expect.
Looking ahead slightly further, on the not-too-distant horizon we also have the impending EPC changes that are part of the Government’s plan to achieve its net zero carbon emissions target by 2050.
There’s been a consultation on this subject that is now closed, with a proposed route forward - that rental properties meet a compulsory energy performance certificate rating of band C on new tenancies by April 2025, and on all rented properties by April 2028, and a recommended £10,000 cap on upgrade costs. With the planning and investment needed the changes will be on us before we know it. Listen to what CEO of the NRLA, Ben Beadle, had to say to me on this very topic in the latest Hamilton Fraser podcast.
It’s certainly been a turbulent time for landlords, with many finding it difficult to stay on top of the regulatory landscape and keep up with the speed of change. A recent study identified that one in four landlords don’t feel on top of changing regulations and 13 per cent find it challenging to comprehend them.
This highlights the importance of being part of an association like the NRLA to gain access to the expert support and resources needed to keep up and adjust, whilst making sure any changes are implemented correctly.
No more, I hear you cry! However, here’s the thing - aside from the difficulties in keeping on top of the changes, more regulation could make the sector fairer and more transparent. It will also help plug the gaps and close the loopholes that clearly exist in the current legislation. More laws, yes, but they need to be introduced in a balanced way that doesn’t penalise or alienate landlords.
Like it or not, our industry requires high levels of legislation to help improve standards. However, not when it’s good for one group (ie the tenant) but harms another (the landlord). We know that some of the recent and impending legislation will unfortunately cause landlords to leave the sector, and that’s not what we want. This is why the process needs to engage with all parts of our industry, to strike a coherent and balanced approach that works for everyone. And there has been a merry-go-round of consultations, round tables and committees, trying to get the blueprint right and avoid the unforeseen consequences. The NRLA published a very thought-provoking report setting out the NRLA vision and proposals for the private rented sector, ‘A New Deal for the Private Rented Sector’, large parts of which I fully agree with.
We will see the full scope of reforms when the rental reform White Paper is released, but we know the Government is considering a national register that all landlords must join, with rogue landlords being ejected from the database.
A rogue landlord database was launched in 2018 providing a list of landlords who have been given a banning order. But only local authorities can see who is listed on the database, and if the figures are to be believed only a handful of characters appear on it. The NRLA recently published a report showing how patchy enforcement is around the country. With an estimated landlord population now exceeding 2.65 million, the new National Landlord Register needs to be easy to use and accessible to everyone, including the public.
The new law will also see the introduction of a form of redress for tenants so they can hold their landlord to account.
The Property Redress Scheme, who like Landlord Action are part of Hamilton Fraser Group, have been providing redress to consumers for a variety of property related issues, including poor agent service, holding deposits and repairs not being done on time, since 2014 when all lettings and property management agents were required by law to join a government approved redress scheme.
With a lot of landlords still choosing to self-manage, we’ve been pre-empting and calling on the Government to take this step for several years now. The majority of landlords are decent, compliant, and professional, do their homework and either join a landlord association (the NRLA now represents over 95,000 members, 10 per cent of the private rented sector or use a qualified agent.
However, there are a significant number of amateur landlords who unconsciously undermine good landlords, and tenants deserve the right to redress for complaints. They need somewhere to go when things go wrong and someone to help put it right.
Landlord redress needs to include help and advice on what landlords should do to protect themselves and needs to be given at the outset. We would like to see references and inventories as a mandatory part of this process.
There are numerous organisations in the industry already that have the skills and expertise to provide valuable services offering strong dispute resolution, competency training, best practice, and guidance.
A mandatory system of redress, delivered by competent bodies, would protect tenants, support landlords and make it easier for enforcement agents to track down those landlords who want to operate under the radar.
However, making it mandatory could still be some time off and we await further details on timeframes. The Property Redress Scheme is therefore launching a pilot landlord redress scheme in association with the NRLA starting in April. The NRLA will offer a year’s membership to the pilot to all their landlords. For the first time, tenants will be able to raise complaints to an independent redress scheme, whereby a case assessor will work to encourage early resolution of disputes or arrive at decisions to provide a fair resolution to a wide range of tenancy issues linked to the NRLA code of conduct.
This pilot scheme will allow us to obtain information and experience of running a redress scheme direct for landlords.
As a government authorised redress scheme for letting agents and one of a range of private rented sector solutions at Hamilton Fraser, the Property Redress Scheme is the ideal partner for the NRLA to offer this service to their landlords.
Finally, under plans unveiled in the Government’s levelling up strategy, in a mission to improve housing conditions, private landlords will be required to bring their properties up to a set of national standards, with about 800,000 forced to refit homes to meet requirements to be “safe, warm and in a good state of repair.
- To read more about the pilot scheme mentioned in this article, and to sign up for FREE before 31st March 2022, click here.
