FCA proposes extension of senior managers regime
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:
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;
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;
What does this mean for landlords?
In order to avoid contravening the new provisions, landlords must have procedures in place:
What does this mean for tenants?
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.
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