Right To Rent – Cut Out The Pain

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Hello readers.

I was recently interviewed by BBC Radio Kent with respect to the new “right to rent” changes. I would like to make you aware of updates that effect us all.

In January 2016, the government introduced new legislation allowing only those legally permitted to stay in the UK the so-called “right to rent”, regardless of individual ability to cover rental costs.

We as property investors and landlords have now joined the ranks of border control, without the need for an interview or the benefits of training, uniform, and pay. We stand side-by-side with full-time immigration and border control officers, protecting the UK borders by undertaking passport and ID checks. Unlike these professionals, however, landlords who fail to correctly carry out these checks face fines and even imprisonment.

We now have a duty to ensure all residents are legally permitted to stay in the UK. This includes not only tenants listed on the tenancy agreement, but also lodgers, and individuals residing at a property who are not registered on an agreement. Yes, that’s correct – this includes any form of sub-letting in the property.

Landlords won’t be able to defend themselves by saying “I didn’t know that my tenant was sub-letting”. Ignorance is not considered a defence. The owner or landlord now has a duty of care and will need to show that not only have immigration checks been undertaken before the commencement of the tenancy, but also that they have visited the property in order to confirm that all tenants are legal.

As of December 1st, new parts of the Immigration Act 2016 now apply, consolidating the right to rent regulations that came into effect earlier this year.

Agents acting on behalf of landlords, or landlords themselves if they manage tenancies, will be committing a criminal offence if they have “reasonable cause to believe” that the apartment or house they are letting is being rented by a tenant disqualified under right to rent regulations.

How will the government check that landlords are undertaking our duty in respect of the new legislation, we wonder?

We all hope and pray for a trouble-free tenancy, in which the tenant pays rent on time and takes care of the property. However, should we as landlords or our managing agents ever need to serve Section 8 notice which does not refer specifically to the Immigration Act 2016, it will be regarded as invalid and tenants will have a technical defence in possession proceedings.

Not only does Section 8 require reference to the Immigration Act 2016, but landlords also need to show the court that all reasonable steps have been taken in order to confirm the tenants’ identity and prove a right to rent in the UK.

It is now also an offence for agents to manage a property on behalf of a landlord where they have “reasonable cause to believe” that a tenant does not hold a right to rent based on their immigration status.

The penalties for both offences on indictment are imprisonment for up to five years and/or an unlimited fine; penalties on summary conviction are imprisonment for up to twelve months and/or, again, an unlimited fine.

So who does right to rent include?

Right to rent covers British citizens, EEA, and Swiss nationals. All they need do is provide a current passport or national identity card. There are also a range of other documents available to prove an applicant for a property has a legal right to rent.

What isn’t clear, however, is how this will change when Article 50 is enacted. This ultimately comes down to the question of a hard or soft Brexit. A soft Brexit may still permit some free movement between the UK and EEA countries, whereas a hard Brexit would see free movement stopped altogether.

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There may be nationals from other countries that also have permission to live in the UK or a time-limited right to rent in the UK. They will need to present acceptable documents, including a valid passport that has been endorsed, biometric immigration documentation, or an immigration status document indicating that the named person may stay in the UK for a limited period.

What about fraudulent documents?

Clearly this can be a problem – and if we get this wrong it could also lead to a fine. We need to check that the documents belong to the holder, that they appear genuine, and show no signs of being tampered with. Care must be taken to ensure that photographs and dates of birth are consistent across the documents and with the tenant’s appearance. It must also be confirmed that permission to stay in the UK has not expired.

The rule of thumb is the ensure all documents are checked before commencement of tenancy. As soon as a resident takes up tenancy in a property, then a tenancy agreement has begun by law, even in cases where no physical tenancy agreement has been signed.

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Of course, this causes a great deal of frustration, and we would rather that responsibility for the checks belonged to the government instead. But as legislation is now in place, we have no choice. To make life easier, letting agents can be asked to run the checks on a landlord’s behalf. They will then become liable for any fines in the event that right to rent does not apply. In any event, a tenant should not be allowed to move in until checks have been completed.

With the introduction of this legislation, we at Family Homes have invested a large sum of money in not only our computer systems, but also in training our ever-growing team. We are happy to lend our experience to cut out the pain of running the legally required checks.

Please do not hesitate to contact me or one of the team at Family Homes by phone on 01795 473434. Alternatively, please visit the Family Homes website or email sunil@familyhomes.co.uk.

 

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