This is a new provision. The imposition of financial penalties for first and subsequent breaches of the requirement for landlords to be members of a redress scheme reflects the approaches taken in section 8 of the Tenant Fees Act 2019 and section 87 of the Consumer Rights Act 2015. Amending the maximum financial penalty to account for inflation will ensure that penalties continue to be an effective and proportionate deterrent.
Example: Where a landlord is not a member of an approved or designated scheme
A tenant of a private residential landlord raises a complaint with the only approved redress scheme – the Ombudsman scheme – and it is found that the landlord is not a member. The scheme takes reasonable steps to contact the landlord, informs them of the requirement to comply and the consequences of non-compliance. The landlord still fails to sign up, and the scheme then refers the case to the local housing authority in whose area the dwelling is. The local housing authority investigates the breach and determines, beyond reasonable doubt, that the landlord has not signed up to an approved redress scheme. The local housing authority subsequently issues a civil penalty of up to £7,000. The landlord pays the civil penalty and joins the Ombudsman scheme – no further action is taken by the local housing authority, and the Ombudsman will be able to investigate the original complaint made by the tenant if the issue remains ongoing.
Part 2: Residential landlord Chapter 2: Landlord Redress Schemes Section 66: Financial penalties Background