The government has set out how the new mandatory Landlord Ombudsman service will work under the Renters' Rights Act 2025, confirming a compensation cap and a structure that brings private landlords into a redress system that previously only applied to letting agents and social housing.
Under the framework announced in the House of Lords, the Ombudsman can investigate tenant complaints, issue binding decisions, and award compensation of up to £25,000 per complaint. Tenants seeking a larger award retain the option of pursuing the matter through the courts instead. The compensation cap is explicitly aligned with the existing cap for mandatory property agent redress, to keep the two systems consistent.
Who has to join, and what happens if they don't
Every private landlord letting in England will be required to join the scheme, with no exemption for occasional, family, or accidental landlords, other than those whose property is fully managed by an agent already belonging to a redress scheme. Failure to join carries its own financial risk, separate from any individual compensation award:
Civil penalties for landlords failing to join the scheme
| 1st failure | 18% | |
| Continued non-compliance | 100% |
First failure to join: up to £7,000. Continued non-compliance: up to £40,000. Bars scaled to the higher figure.
Source: Renters' Rights Act 2025 government framework announcement, House of Lords, July 2026.
What the Ombudsman can and cannot do
The scheme is designed to handle service-quality and statutory-duty complaints, disrepair, poor communication, unfair deposit deductions, and harassment, rather than rent disputes or possession proceedings, which remain a matter for the courts. Tenants must generally raise the issue with the landlord first and allow a reasonable period, typically 28 days, before referring the matter to the Ombudsman.
No implementation date has yet been confirmed; further legislation is required before membership becomes mandatory, and the government has said landlords will be given sufficient notice ahead of any requirement coming into force.
Disclaimer: This article summarises the government's announced framework, which has not yet been brought into force, and is for general information only. It does not constitute legal advice. Landlords and tenants should seek independent advice specific to their circumstances once the scheme's operational details and start date are confirmed.
