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

The government hints tenants could be awarded compensation of £25,000 under the PRS Ombudsman Scheme.

Under the Renters’ Rights Act, the PRS Ombudsman scheme will provide quick, fair, impartial and binding resolution for tenants’ complaints about their landlord.

However, as previously reported by Property118, Peers have warned the scheme could drive landlords out of the market.

Compensation above the £25,000 cap

During a debate, Baroness Taylor of Stevenage suggested that tenants could seek compensation above the £25,000 cap by taking their case through the courts.

She said: “Regarding the compensation cap of £25,000, this has been designed to align with the established cap for mandatory property agent redress, helping to support 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. We will keep the operation of the scheme, including the compensation cap, under review as part of our wider governance, monitoring and evaluation arrangements, with an initial review required within five years of the scheme being approved or designated.

“This will inform any future decisions on whether changes to the cap are necessary.”

£7,000 fine for failing to register to PRS Database

As previously reported by Property118, ministers have also suggested the possibility of combining the PRS database registration process with Ombudsman registration. However, they have not confirmed whether landlords will be required to pay separate fees for each scheme.

Under the Renters’ Rights Act, all landlords will need to sign up for the database, which will include information about their properties that tenants can access.

If a landlord lets or advertises a property without it first being registered on the database, they can be issued with a civil penalty of up to £7,000 or a £40,000 fine if they provide fraudulent information to the database.