Countdown to Right to Rent: 1 February 2016 Landlords Obligations

On 1 February 2016 the Right to Rent immigration checks scheme will go live across the country. This means that all landlords in England will be responsible for checking that new tenants are allowed to be in the UK before renting out their properties.

Right to Rent was introduced in the Immigration Act 2014 as part of the government’s policy to curb illegal immigration. The Act includes new measures to prevent people who are in the UK unlawfully from accessing key services, including private rented accommodation. Right to Rent was first piloted in the West Midlands in December 2014. Despite being controversial amongst landlord, tenant and immigrant groups, the government has decided to push ahead with a national roll-out of Right to Rent on 1 February 2016.

What is the Right to Rent?

Right to Rent refers to a person’s immigration status and whether this entitles them to rent property in the UK. A person may have a permanent Right to Rent, a time-limited Right to Rent or no Right to Rent. The Immigration Act 2014 makes private sector landlords responsible for checking whether prospective tenants have the Right to Rent before they enter into tenancy agreements. If they do not then they should not be granted tenancies.

The following people have a permanent, unlimited Right to Rent:

• British citizens
• European Economic Area nationals (citizens of EU countries plus Iceland, Lichtenstein and Norway)
• Swiss nationals
• People who have indefinite leave to remain in the UK

A person living in the UK on a time-limited visa will have a time-limited Right to Rent. This category also includes asylum seekers and other persons who are in the UK lawfully but have time-restrictions on their right to reside here.

A person who is living in the UK illegally has no Right to Rent and is disqualified from renting property. However, the Secretary of State is able to grant permission to rent to a person who, as a result of their immigration status, would otherwise not have the Right to Rent.

Does it apply to existing tenancies?

Right to Rent checks only need to be carried out in respect of agreements entered into on or after 1 February 2016 (if outside the pilot scheme area). Landlords are therefore not legally required to check the status of existing tenants. Nor are they required to carry out checks if a tenancy agreement entered into before 1 February 2016 is renewed after this date, provided the parties to the agreement are the same and there has been no break in the tenancy.

What are the landlord’s legal obligations?

The Right to Rent provisions are contained in Chapter 1, Part 3 of the Immigration Act 2014. Under s22 Immigration Act 2014 a landlord must not let an adult occupy premises under a residential tenancy agreement if that adult is disqualified as a result of their immigration status i.e. they do not have the Right to Rent.

A residential tenancy agreement includes not only the usual private sector assured shorthold tenancies but also licences, sub-tenancies and lodging agreements. It therefore applies widely to most forms of residential occupation provided the agreement grants the adult a right to occupy the premises as their only or main residence. Holiday lettings, for example, would be exempt as a result of this test.

Certain tenancy agreements are excluded such as tenancies arranged by the local authority, student halls of residence and long leases for more than 7 years. A full list of excluded residential tenancy agreements is set out at Schedule 3 of the Act.

The Act also only applies to adult occupants. This means that landlords do not need to check the immigration status of children provided they are satisfied that the child is under 18. If the child turns 18 during the course of the tenancy there is still no obligation to check their immigration status. New adults will however need to  be checked if the tenancy is renegotiated or follow up checks are required.  Landlords must check the immigration status of all adults occupying the property regardless of whether they are named on the tenancy agreement.

Landlords may be penalised if they contravene the Act. Breach of the rules is not a criminal offence but the Secretary of State can issue landlords with a civil penalty notice if the legislation has been contravened.

A contravention of the Act can occur in two main ways:

1. Pre-Grant Contraventions occur where a landlord grants a residential tenancy agreement to a person who does not have a Right to Rent.  When the agreement commences the person is disqualified from occupying property as a result of their immigration status.
2. Post–Grant Contraventions occur when a residential tenancy agreement is granted to a person with a limited Right to Rent and during the course of their occupation of the property their time-limited right expires and they become a disqualified person.

For pre-grant contraventions the landlord who entered into the residential tenancy agreement is the responsible landlord. However, for post-grant contraventions it is the landlord at the time of the contravention, not the landlord who granted the original tenancy, who is responsible and faces potential liability.

When to carry out checks

Where a person has a permanent Right to Rent, checks only need to be carried out the start of that person’s occupation of the property to confirm that the unlimited Right to Rent exists.

However, where a person has a time-limited Right to Rent, checks need to be carried out both at the start of the tenancy and again before the time-limited right expires or once 12 months has passed, whichever is later. If a time-limited right is due to expire, the occupier must take steps to re-establish the right before it comes to an end. If this is not possible then the landlord is under a duty to make a report to the Home Office. To avoid contravening the Act, the report must be made before the time-limited right expires.

Can I pass the responsibility on to my agent?

Landlords are able to assign the responsibility for contraventions to their agents, provided the agent is acting in the course of business. However, it must be recorded in writing that the agent is under an obligation to carry out the checks on behalf of the landlord. In such cases the Secretary of State is able to serve the agent with a penalty notice.

What about subtenants?

If tenants (including social housing tenants) sublet their properties or take in lodgers they then become responsible for carrying out the checks and complying with the rules. However, superior landlords can agree to accept responsibility for carrying out checks but the agreement between the landlord and superior landlord must be in writing.

What happens if there is a contravention of the rules?

If a landlord or agent is found to have contravened the Act the burden of proof falls on them to prove that they have a statutory excuse defence.  The Act is structured so that if a contravention is established the landlord or agent can avoid liability by raising a statutory excuse, for example, that they carried out all the necessary checks and/or notified the Home Office when they had to. A landlord could argue that they should be excused from paying a penalty because the responsibility for contravention rests with their agent. Retaining a clear record of the dates on which checks were carried out together with evidence of the documents checked is key to establishing a statutory excuse.

If the landlord or agent is unable to establish a defence then the Home Office can commence enforcement action and impose a financial penalty of up to £3,000. Currently there are no criminal sanctions for breaching the Act. Landlords and agents who are served with penalty notices have the opportunity to object to the Secretary of State and, if not successful, a further appeal lies to the county court.

Codes of Practice

The government has published two statutory Codes of Practice to assist landlords with understanding their legal obligations and carrying out checks. These are:

1. Code of Practice on Illegal Immigrants and Private Rented Accommodation
2. The Code of Practice for Landlords: Avoiding unlawful discrimination when conducting ‘Right to Rent’ Checks in the Private Rented Residential Sector

The first Code of Practice, despite being updated on 3 January 2016, still makes reference to the Right to Rent being implemented on a phased geographical basis. This is incorrect. The roll out of Right to Rent commences on 1 February 2016 and will be in force across the whole of England on this date.

Further Information

Anthony Gold is running detailed one-day seminars for agents and landlords who are interested from their London offices covering the legal position and giving advice on how to identify forgeries. If you wish to register your interest then email seminars@anthonygold.co.uk. The next seminar will take place on 19 January and more information can be found here

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*