Support, Advice and Experience within the Property Market

Get Ready for right to Rent

From Robert Ulph on January 21, 2016

This week I wanted to go over and make everyone aware of new checks you will need to make if you are a Landlord or agent . ‘Right to Rent’ goes live across England from 1 February 2016, and agents and landlords will have to carry out quick and simple checks to ensure potential tenants have the right to rent their property in the UK.

Right to Rent was first introduced as a trial in some parts of the West Midlands in December 2014 and the extension to the rest of England is the next phase of the roll out. Landlords and agents, and anybody who sublets or takes in lodgers, could face a financial penalty of up to £3,000 per tenant if they are found to be letting property to someone who has no right to stay in the UK. This week just before this new checks become law I thought it was a good time to go over what needs to be done if you are a Landlord who doesn’t currently use an agent as it may be time that if any of your rented properties do become available that you may decide that it would now be better to use an ARLA agent to do these background checks and these new “right to rent check” for you, so here goes.
Under Section 22 of the Immigration Act 2014 a landlord must not authorise an adult to occupy property as their only or main home under a residential tenancy agreement unless the adult is a British citizen, or European Economic Area (EEA) or Swiss national, or has a Right to Rent in the UK.

WHAT ARE THE CHANGES?
The law introduces a requirement from 1 February 2016 for all landlords of private rental accommodation in England to carry out Right to Rent checks for new tenancy agreements to determine whether occupiers aged 18 and over have the right to live in the UK legally.

NOTE: The law does not apply to children (under the age of 18) living at the property and you only need to check people who will be using your property as their only or main home. You do need to conduct checks on all adult occupiers not just the tenancy holder.

WHO NEEDS TO DO THEM?
You need to make Right to Rent checks if you are a private landlord; have a lodger; are sub-letting a property; are an agent appointed by a landlord to make Right to Rent checks.
Any occupier who sub-lets all or part of their accommodation to a person for money will be classed as landlord under the law and liable for penalty. However, the sub-letter can ask their landlord to accept responsibility for conducting checks and this agreement should be made in writing.

In addition, under the law landlords can agree in writing with an agent who is responsible for conducting checks and so liable to a penalty. The agent can then carry out the checks and where necessary, make a report to the Home Office. The agent must also report back to the landlord. If an agent’s Terms of Business state they will undertake reference checks on the tenant, the agent will become liable for the Right to Rent checks. Clauses which attempt to remove the liability for Right to Rent checks will not remove liability.

NOTE: The Right to Rent check applies to new tenancy agreements
on or after 1 February 2016 Existing tenancy agreements are unaffected
and landlords or their Agent will not be required to carry out retrospective checks.

WHAT YOU NEED TO DO IN 3 STAGES:
STAGE 1 – Establish who will live in the property. Obtain, Check and Copy one or more original documents that demonstrate the Right to Rent in the UK for all adult occupiers for that property in the presence of the holder. Acceptable documents include a UK passport and a permanent residence card or travel document showing indefinite leave to remain. The full list of documents can be found on the government web site or you can contact me for more information at the end of this article.

NOTE: In circumstances where a tenant is arranging their tenancy from overseas this is more challenging. One course of action is to do checks by video call and agree the tenancy subject to an ID check on arrival.

You don’t have to do further checks if the person doesn’t have any restrictions on their right to stay in the UK (such as if they are a British, EEA nations or non-EEA nationals with the right to be in the UK definitely).

If you use a tenant referencing agency you still need to see original documents and make copies yourself. You should retain clear versions or electronic records of the documents and record the date when you did this.

NOTE: Checks should be carried out in the presence of the holder to ensure the documents match and there are no obvious causes for suspicion such as photographs that are an unsatisfactory likeness.

If the tenant’s permission to stay in the UK is time limited, you’ll have to make a follow up check on the tenant.

NOTE: Record any dates regarding occupants who have a time limited right to be in the UK (which will be on their passport visa, passport stamp or biometric residence permit).
Securely store copies of all documents throughout the tenancy and for at least one year afterwards.

STAGE 2 – Where the initial check shows that a person has the right to be in the UK for a limited time you can let to that person but you must also make a follow up check.
In the case of Landlords who let their properties themselves Agents will need to inform them that they need to do the follow up checks and keep evidence of this communication.

NOTE: Follow up checks must be carried out just before the expiry of date of the tenant’s right to be in the UK or 12 months after the original check whichever is the later.

STAGE 3 – If the follow up check shows that the person no longer has the right to be in the UK you must make a report to the Home Office using:
www.gov.uk/report-immigration-crime

NOTE: The report must include the full name and address of the occupier, the date they first took up occupation plus copies of their documents when you first undertook the initial Right to Rent check. You must also include your name and contact address or where relevant the contact details of the agent.

WHAT COULD HAPPEN IF YOU DON’T DO THEE CHECKS?
You can be fined up to £3,000 per occupier if you rent a property to someone who isn’t allowed to stay in the UK and you can’t show that you checked their Right to Rent.
You can also be fined if you make a follow up check and don’t make a report to the Home Office saying that a tenant’s stay has run out or you don’t make a follow up check on a tenant who has a time limited permission to stay in the UK: www.gov.uk/penalties-illegal-renting

If all this sounds like a lot of work remember that most reputable ARLA agents have been doing these sort of checks years anyway as part of their commitment to vet all tenants who rent a property through their companies. Pennington has had a process in place for years but with the new “right to rent” we will just be making extra checks to make sure we are following the law. If it all sounds too involved please do not hesitate to contact me on 01473 214343 or e-mail robert@pennington-online.co.uk