What is the Right to Rent?
On 1st December 2016 the Government introduced provisions 39, 40 and 41 of the Immigration Act 2016 (“the Act”) targeting residential landlords who fail to comply with their right to rent obligations. Section 39 and its implications for landlords and tenants has been summarised below.
Under the pre-1st December 2016 right to rent scheme residential landlords have already been required to carry out checks to confirm that all residential tenants who are looking to rent a property have a right to live in the UK:
- They must obtain and check original documents from the acceptable documents list set out in the Prescribed Requirements and the Code of Practice.
- These documents must be copied and kept during the tenancy and at least for a year after the tenancy ends.
The reason for carrying out these checks is because they give the landlord a statutory excuse against a civil penalty (a fine) if it later turns out that the person does not have permission to be in the UK.
Under section 39 of the Act a criminal offence will be committed if the following two conditions are met;
- an adult is occupying the premises whilst unlawfully living in the UK and;
- the landlord knows or has reasonable cause to believe that the premises were occupied as such.
The obligation is a continuing one. Landlords should check that the individual’s immigration status has not expired during the tenancy. If the checks indicate that the person is no longer entitled to remain in the UK, the landlord risks prosecution if he/she does not terminate the tenancy or fails to take reasonable steps to terminate it.
Section 39 means residential landlords and their agents who fail to comply with their obligations could face criminal sanctions;
- imprisonment for up to 5 years if tried in the Crown Court or;
- imprisonment for up to 12 months if tried in the Magistrates Court or;
- an unlimited fine or;
What does this mean for landlords?
In order to avoid contravening the new provisions, landlords must have procedures in place:
- Not only must landlords carry out checks against the prospective tenant but against any adult who may be occupying the property. They should therefore carry out regular inspections of their property.
- Landlords must keep up to date records of information of their tenants, such as visa expiry dates.
- Landlords should refer to the Immigration Act 2014 Guidance which provides information as to what are reasonable steps to terminate the tenancy after a check which indicates that someone is disqualified from renting. Taking reasonable steps within a reasonable timeframe will act as a defence. The easiest step would be for a landlord to ask the tenant whether they will consider ending their tenancy. If not, they can then take formal action. Landlords who carry out a follow-up right to rent check and find that someone is disqualified are required to report this to the Home Office as soon as reasonably practicable.
- Landlords should ensure that their lease agreements are drafted so that they require landlord consent on any assignment or sublease by their tenant. The landlord can then carry out checks against proposed tenants or sub-tenants to ensure they are entitled to live in the UK before giving consent.
- Landlords can avoid the obligations and criminal penalties under the Act by appointing agents. It is the agents who will then be responsible for checking an individual’s entitlement to live in the UK and would face criminal liability where they fail to comply with the Act.
What does this mean for tenants?
- Where the tenant’s visa is on a time limited basis, they should ensure that they make any application for extension of their visas in advance and keep records of the application.
- They should ensure that only those named under the tenancy agreement are in occupation to avoid risking any tenancy being terminated.
The introduction of “reasonable cause” under section 39 is onerous on the landlord as it is an objective standard which fails to take into account each landlord’s circumstances. There is a risk that some landlords may decide to refuse a tenancy based on mere suspicion of an individual’s immigration status; or they may evict an individual from the property as a result. They may refuse a person on the basis of their physical traits or their name to avoid criminal liability. In effect, the Act may encourage covert discrimination. However, the Code of Practice on illegal immigrants and private rented accommodation provides guidance; landlords must not discriminate when carrying out these checks, as only the listed documents should be considered when deciding whether the prospective tenant has a right to rent.
Arguably, the threat of prosecution will put unscrupulous landlords into check by ensuring that they comply with their obligations by obtaining records of all adults occupying under the tenancy. Although landlords can delegate their obligations to agents, it is fundamental to ensure that there is clear communication between them as to who is responsible for undertaking the checks to avoid the serious penalties under this section. Ultimately, it is the landlord who is responsible for ensuring appropriate procedures are in place before they rent out their properties.