Right to rent checks: What are the risks and obligations?

The ‘right to rent’ scheme came into force nationwide on 1 February 2016 as another weapon in the Government’s arsenal against illegal migration in the UK.  This requires landlords with property in England to check the immigration status of their tenants for all tenancies starting on or after 1 February 2016.  Landlords must ensure not to rent to people who do not have the lawful right to reside in the UK.

Landlords who fall foul of the new requirements could face both civil and criminal liability.

Who does the scheme apply to?
The scheme applies to landlords (businesses and individuals) who let accommodation with a lease or tenancy agreement, occupiers who sub-let their accommodation and landlords and occupiers who take in paying lodgers.

Who is responsible for conducting the checks?
The landlord will usually be responsible for carrying out the necessary checks of its tenants.  However, if a landlord relies on an agent to let or manage their property, they may agree in writing that the agent will take responsibility for conducting the right to rent check on behalf of the landlord.  If landlords wish to pass this obligation on to the agency they must ensure that there is a written agreement in place between the agency and the landlord and that it makes it clear who is responsible for carrying out the right to rent checks.  If an agent establishes that a person does not have the right to rent and reports the matter to the landlord prior to a tenancy being granted, the landlord becomes liable to a penalty if the tenancy goes ahead and the tenant does not have the right to rent.  In these instances an agent should keep written records to show they passed on the information to the landlord.

In the situation where a tenant sub-lets the property without the landlord’s knowledge, it becomes the tenant’s responsibility to carry out checks on any sub-tenants.

Obligations
Checks are required for all types of tenancy agreements, whether written or oral, and in most cases must be carried out in the 28 day period before the start of a new tenancy. 

To conduct the check, the responsible person must:

  • Confirm that any tenants will live in the property as their only or main home in the UK.  This is usually the case if they live there most of the time, keep their belongings there, they are registered to vote at the property and/or they’re registered with the doctor using that address;
  • Ask all tenants aged 18 or over (whether they are named in the tenancy agreement or not) for original documentary evidence showing they have the right to reside in the UK, such as a valid British or EEA or Swiss passport or a non-EEA passport, together with a valid UK visa or Biometric Residence Permit.  The documents provided must be on the list prescribed by the Home Office;
  • Check any documents provided by the tenants are valid with the tenants present (including checking that the names, dates of birth and photographs are consistent, the dates for the tenant’s right to stay in the UK hasn’t expired and that the documents do not appear to be forgeries); and
  • Make and keep copies of the documents, together with a record of the date the check was carried out. Copies should be taken of all passport pages bearing the passport expiry date or applicant’s details (such as nationality, date of birth and photograph) and visa endorsements.  If a biometric residence permit is provided, both sides must be copied and all copy documents must be in a format which cannot be altered.  The copies must be held for the whole time the individual is a tenant and for one year thereafter.

If the person is unable to provide their immigration documentation because they have an outstanding application with the Home Office the landlord will need to contact the Home Office via an online checking service.

Where a tenant has a time limited right to reside in the UK, the person responsible for carrying out the check will also need to carry out a further check either just before the expiry date of the tenant’s right to stay in the UK or within 12 months of the previous check, whichever is later.  If the further check is not undertaken and the tenant’s permission to stay in the UK expires or the tenant loses their right to be in the UK, the person responsible for carrying out the checks could be liable for a civil and/or criminal penalty.

If a potential tenant fails a right to rent check, the person conducting the check must inform the Home Office of this and may be fined if they do not do so.

Penalties for failing to comply
If a tenant does not have the right to rent and the responsible person did not carry out the correct right to rent checks, the responsible person could be issued with a civil penalty of up to £3,000 per illegal adult tenant.

A new criminal offence has also been introduced for landlords or their agents who know, or have reasonable grounds to believe, that the property is being occupied by a tenant with no right to rent in the UK.  The potential criminal sanctions include up to five years imprisonment.

We understand terms will be implied into residential tenancy agreements allowing landlords to terminate a tenancy where a tenant does not have the right to rent and it should become easier for landlords to evict tenants who have no right to rent.

The risk of discrimination
It is feared that, rather than carry out the checks, some landlords and agents may select tenants on the grounds of their name or ethnicity.

A survey carried out by the Joint Council for the Welfare of Immigrants (JCWI) in 2015 found that 42 per cent of landlords surveyed said that right to rent checks would make them less likely to let a property to someone who does not have a British passport, while 27 per cent said they would even be reluctant to engage with people who had foreign-sounding names or accents. 

This approach could expose landlords and their agents to claims of race discrimination from prospective tenants. The consequences of losing such a claim could be severe. In addition to any compensation ordered by the courts and the complainant’s legal costs, landlords may be required to change their practices and might receive unwelcome publicity causing them to lose business.
 
Avoiding discrimination claims
To minimise the risk of discrimination claims, landlords and agents should ensure that they apply the right to rent checks in a fair, justifiable and consistent manner, regardless as to whether they believe the prospective tenant to be British, settled in the UK or a person with limited permission to be in the UK.

In particular, landlords and agents should also ensure that no prospective tenants are discouraged or excluded from renting the property because of their personal appearance or accent or anything else associated with their race or nationality. They should also not make and act upon assumptions about a person’s immigration status on the basis of their colour, nationality, ethnic or national origins, accent, ability to speak English or the length of time they have been resident in the UK. 
 
Finally, landlords should consider stating in adverts for rental properties that all prospective tenants will be asked to provide documentary proof of their right to rent to satisfy the right to rent checks.  Prospective tenants should not be treated less favourably if they produce acceptable documents showing a time-limited right to stay in the UK.

Comment
Although the Home Office has set up an online checking tool for landlords to help to guide them through the checking process, these are still onerous obligations to impose on private individuals or even on professional letting agents who are not trained immigration officers. 

Potential sanctions and civil penalties will almost certainly deter landlords from offering their properties to non-British or non EEA nationals or those with a more complicated immigration status (such as family members of EEA nationals) who cannot immediately provide the necessary documents to evidence their right to reside in the UK.  This clearly raises the potential for discrimination against any such individuals from being able to rent properties in the UK.

Further, landlords and agencies should consider updating tenancy agreements to make it clear that tenants must have the right to rent in the UK at all times during the term of the tenancy and require tenants to provide satisfactory evidence of their UK immigration status upon demand.

Landlords or agencies with queries around the new obligations or any uncertainties as to whether or not a prospective tenant has the right to rent in the UK should consider taking professional legal advice.

Article by Adam Landy, Senior Associate.
First published in Residential Property Investor, March 2016

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