Right to rent

Right to Rent Checks for All Residential Landlords begun since January 2016

Mandatory Licensing Scheme
This applies to houses in multiple occupations (HMO's) of three or more storeys occupied by five or more people, making up two or more households.

Immigration status checks has applied to whole of England
The Immigration Act 2014 introduced a requirement for residential landlords to conduct checks on new adult tenants and occupiers to ensure that they have the right to reside in the UK. The aim is to make it difficult for illegal migrants to rent property. Landlords in certain parts of the West Midlands have had to carry out these checks since December 2014. From 1 February 2016 the scheme has applied to all residential landlords in England.

What is the right to rent?
Essentially, a person has the right to rent if they are a British citizen or an EEA or Swiss national or if the person has leave to remain in the UK. Other people are disqualified from renting property in the UK.

The implications for Landlords
Landlords must not allow properties to be occupied by people who are disqualified from renting. Landlords can be fined up to £3,000 for breaching this rule. However, landlords will not be fined if they can demonstrate that they have carried out appropriate checks on their tenants’ immigration status. Landlords may also avoid liability by appointing a letting agent to carry out the checks. The appointment must be made in writing.

What checks are required?
The checks are like the “right to work” checks that employers are required to undertake. The Home Office right to rent tool can be found on our website. There is also a User Guide available and a more detailed Code of Practice on our website. For more complex cases, a check can be requested from the Home Office’s Landlords Checking Service by submitting an online form. Landlords must retain copies of the tenant’s documents for the duration of the tenancy and for one year after. The information must be kept securely and in accordance with the Data Protection Act 1998.

Implications for letting agents
As mentioned above, if a landlord uses a letting agent to negotiate the letting, and the agent is expressly responsible (under a written agreement) for carrying out the checks, the responsibility for carrying out checks and paying any fine falls on the agent rather than the landlord. Our Residential Lettings Agency Terms and Conditions already include a clause making the agent liable for carrying out right to rent checks if they apply to the area in which the property is situated.

Other recently applied changes
The Immigration Bill 2015-16 is gone through in the Parliament. It is enacted, whose summary is given here:

• Make it harder for illegal migrants to rent property in the UK by giving landlords new eviction powers.
• Create new criminal offences for landlords and lettings agents who deliberately and repeatedly let properties to illegal migrants. Guilty parties will face a fine and/or imprisonment. We will provide further information when the draft legislation has been finalised.

Rights to rent top cause of stress for third of landlords in today’s market

According to a new report, Rights to Rent is causing landlords huge stress and worry, especially in areas of the UK with a high penetration of immigrants.

The study, shows that Rights to Rent is the number one cause of stress for over a third of BTL landlords, ahead of dealing with tax and inland revenue, raising finance, handling tenant complaints and void periods.

Only rent arrears and sorting out property repairs are rated as more stressful than the new immigration checks.

Landlords in areas with highest level of immigration like London and the South East, the West Midlands, the East of England, and the North West are suffering the most under the new legislation. What’s more, landlords are concerned that they are paying over the odds for all the reference checks that they now must make, to ensure compliance.

Research from the Residential Landlords Association (RLA) shows that in February 2016, when the new Right to Rent came into force, a staggering 90% of landlords in England and Wales had received no information from the government on their legal duties under the new rules.

The research also found that 72% of landlords did not understand their obligations under Right to Rent and 44% will only rent to people who have documents that are familiar to them. Since 1 February, landlords are legally obliged to make sure their tenants have the right to be in the country and report those who do not to the authorities. Landlords found breaking the Right to Rent rules will face punitive fines of up to £3,000. Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

Any queries, feel free to contact 99home.