Tenants could claim £25,000 in compensation under PRS Ombudsman scheme

Summary: The government has indicated that tenants may claim up to £25,000 in compensation through the new PRS Ombudsman scheme under the Renters’ Rights Act. Landlords face new compliance requirements, including mandatory registration on the PRS database, with penalties of up to £7,000 for non-compliance.

Tenants could claim £25,000 compensation under PRS Ombudsman scheme

The government has revealed that tenants may be entitled to compensation of up to £25,000 under the Private Rented Sector (PRS) Ombudsman scheme, established by the Renters’ Rights Act. This scheme aims to provide tenants with a quick, fair, impartial, and binding resolution to complaints against landlords.

However, concerns have been raised by peers that the scheme might prompt some landlords to exit the rental market, as previously reported by Property118.

Compensation above the £25,000 cap

During a recent debate, Baroness Taylor of Stevenage explained that while the compensation cap is set at £25,000 to align with existing property agent redress limits, tenants may still pursue higher awards through the courts if justified.

She stated: “The compensation cap of £25,000 supports consistency across the housing redress landscape. Tenants will still be able to seek a remedy through the courts if they believe a higher award is justified. The scheme’s operation, including the cap, will be reviewed within five years to determine if changes are needed.”

£7,000 fine for failing to register on PRS database

Ministers have suggested potentially combining the PRS database registration with Ombudsman registration, though it remains unclear whether landlords will face separate fees for each, as previously reported by Property118.

Under the Renters’ Rights Act, all landlords must register their properties on the PRS database, which tenants can access for information. Landlords who let or advertise properties without registration risk a civil penalty of up to £7,000. Providing fraudulent information to the database may result in fines up to £40,000.

Practical support for TLA members

With the introduction of the PRS Ombudsman scheme and new registration requirements, landlords face increased compliance responsibilities. TLA membership offers access to practical guidance and compliance resources to help landlords understand and respond to these changes effectively.

TLA is currently BETA testing ORBIT™, its new property management and compliance platform designed to assist landlords and letting agents in organising property records, managing essential documents, and keeping track of compliance activity. This platform aims to bring together property information and TLA’s support tools in one accessible system.

Members can explore resources tailored to the evolving private rented sector and prepare for new obligations under the Renters’ Rights Act. Those interested can explore TLA membership or learn more about ORBIT™ BETA access.