Regulation of residential lettings is on the increase. On
1 December 2014, residential landlords (or their appointed agents)
in the pilot area of Birmingham, Walsall, Sandwell, Dudley and
Wolverhampton become liable for civil penalties of up to
£3,000 per illegal adult tenant. The intention is that,
following an evaluation in the Spring, this will be rolled out
nationwide next year. The scheme is not yet fully finalised
and the information in this article is therefore subject to
Landlords will be able to avoid this liability by performing immigration document checks which give them a "statutory excuse" if a properly checked tenant is then discovered to be an illegal immigrant.
Landlords will be able to delegate their document checks to an agent, in which case the agent also becomes liable for the civil penalties. Landlords and agents therefore need to understand their obligations and adapt their tenancy agreements and terms of business.
Agents and landlords will sometimes need to ask relatively intrusive and culturally sensitive questions of a prospective tenant to establish whether a right to rent check is necessary. In making these enquiries they will need to comply with equality and data protection laws - and also try to avoid causing offence.
The new law will apply to new tenancies where the property will be the tenant's main home. Licences and lodgers are included, and sub-lettings are also affected. There are some exclusions, including short holiday lets, care homes, hospitals, some student accommodation, and long leases for over seven years with no break clause.
The checks, which must normally be performed prior to a tenancy agreement being signed (and always before a tenant takes up occupation of a property), involve:
- establishing which adults will be using the property as a main home;
- obtaining, from each adult tenant, documents evidencing immigration permission to reside in the United Kingdom. There are official lists of acceptable documents. EEA passports are included;
- checking the documents in the presence of the document-holder (either in person or via live video link). If a tenant cannot provide the documents, but has a Home Office reference number, the landlord can request an online 'right to rent' check from the Home Office Landlord Checking Service;
- copying the documents, and retaining a copy together with the date of the check;
- identifying any time limit on the tenant's right to rent, diarising and performing follow-up checks. In the event that the tenant loses the right to rent, the landlord can maintain the statutory excuse by reporting the tenant to the Home Office.
Official guidance asserts that the checks are simple and will in most cases take a matter of minutes. Unfortunately from experience, immigration document checks are often not so straightforward. Landlords and agents need to have an understanding of:
- immigration status - there are many different ways in which an individual can demonstrate a right to rent. Sometimes this is clear and straightforward. Sometimes it is not. False or unfamiliar documents are not uncommon.
- unlawful discrimination under the Equality Act 2010 - there is a risk of unlawful discrimination by agents and landlords seeking to avoid the new civil penalties. Compensation is potentially unlimited and negative publicity can result. Refusing to let a property to tenants based on the protected characteristics of race, colour, nationality, ethnic or national origins is direct discrimination. So is inconsistency in the application of checking procedures. Indirect discrimination (for example operating a checking process that applies to everyone, but puts tenants with a protected characteristic at a disadvantage, and which cannot be justified) is also unlawful.
- data protection compliance - passports and other immigration documents contain sensitive personal information. The storage and disclosure of such information is tightly regulated by the Data Protection Act 1998. This includes disclosure to the Home Office, or between agent and landlord.
Landlords and agents will need to apply a mix of property, equality and data protection laws. Getting this right is going to take more than the "matter of minutes" that the official guidance has suggested, but a little bit of preparation will go a long way towards avoiding the common pitfalls.
HOW WE CAN HELP YOU
We can provide expert advice and training on:
- how to spot the residential arrangements that are within scope of the new law;
- how to conduct a statutory 'right to rent' check, and how to keep records and audit trails establishing the statutory excuse against a civil penalty. We can also give opinions when the documents an individual produces appear unusual;
- revising tenancy agreements to take account of the new laws;
- revising terms of business between agent and landlord to take account of the new laws;
- avoiding unlawful discrimination against tenants;
- compliance with data protection laws when storing copies of tenants' immigration documents, and providing information about a tenant to the Home Office;
- defending discrimination claims and objecting to and appealing penalty fines.
We will be arranging seminars to assist landlords and agents to prepare for the new regime. The seminar will be free of charge and the dates are to be confirmed shortly.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.