Avoid a £3000 fine.
Are you ready for Right To Rent?
It’s been a busy time for landlords of late – new laws, regulations, tax changes coming out of the woodwork left, right and centre. It’s no wonder many smaller landlords wonder whether the Government has the knives out for them! That said, change happens and like all new things most of the fear comes from the unknown.
Once you know exactly what is involved you can set about getting on with business.
This month I’m focusing on the looming Right To Rent checks that from the 1st February 2016 ALL landlords (or letting agents acting on their behalf) are required to make on ALL tenants commencing a new rental contract.
So what is Right To Rent and what do you need to know / do?
About Right To Rent
The view of many landlords is that Right To Rent is effectively the Government’s way of discharging some of its duties to check the legal immigration status of people within the UK. It is illegal to rent property to any person(s) who is/are not legally entitled to remain within the UK.
As of 1st February 2016, Right To Rent makes it a legal requirement that landlords or their agents must carry out a range of checks that a tenant or lodger can legally rent a residential property within the UK. Landlords who fail to do so (or ensure their letting agent has done so) can be fined up to £3000 if they rent their property to someone who isn’t allowed to stay in the UK.
A useful checking tool to walk you through the steps can be found here.
So when must you carry out Right To Rent checks? The guidance states that these must take place within 28 days before the start of a new tenancy. Landlords must make checks for:
- all adult tenants (aged 18 and over)
- all types of tenancy agreements, written or oral
That said, tenants in some types of accommodation (such as social housing and care homes) won’t need to be checked. You can find the full guidance here
All landlords in England will have to make checks from 1 February 2016.
How do you make checks?
To remain within the law and avoid a potential £3000 fine landlords or letting agents acting on their behalf must:
- Check which adults will live at the rental property as their only or main home.
- See the original documents that allow the tenant to live in the UK.
- Check that the documents are genuine and belong to the tenant, with the tenant present.
- Make and keep copies of the documents and record the date you made the check.
Landlords can be fined up to £3,000 for renting a property to someone who isn’t allowed to stay in the UK.
With regards to checking the original documents, with the tenant(s) present. The Government has issued guidance stating that it will be acceptable to check via Skype or some other type of video link if a tenant is not able to attend a face to face meeting with the landlord or agents.
The full landlord’s guide to checking and list of all documents that are acceptable to comply with the Right To Rent checks can be found here.
How do you check that the property is used as the tenant’s only or main home?
Under the guidance, a property will usually be classed as a tenant’s only or main home if:
- they live there most of the time
- they keep most of their belongings there
- their partner or children live with them
- they’re registered to vote at the property
- they’re registered with the doctor using that address
Check their original documents
The law is clear that landlords or their agents need to check that:
- the documents are originals and belong to the tenant
- the dates for the tenants’ right to stay in the UK haven’t expired
- the photos on the documents look like the tenant
- the dates of birth are the same in all documents (and are believable)
- the documents aren’t too damaged or don’t look like they’ve been changed
- if any names are different on documents, there are supporting documents to show why, eg marriage certificate or divorce decree
If the tenant is arranging their tenancy from overseas, landlords or their agents must see their original documents before they start living at the property.
You can read the full guidance on illegal immigrants and private rented accommodation here.
Make a copy of the documents
When landlords or agents copy the documents you must:
- make a copy that can’t be changed, eg a photocopy
- for passports, copy every page with the expiry date or applicant’s details (eg nationality, date of birth and photograph), including endorsements, eg a work visa or Certificate of Entitlement to the right of abode in the UK
- copy both sides of biometric residence permits
- make a complete copy of all other documents
- record the date you made the copy
It’s vital that you keep copies of the tenant’s documents for the time they’re your tenants and for one year after. This allows you to evidence that you have discharged your duties fully under the new law.
Remember – make sure you follow data protection law to ensure that you are storing tenant’s data securely. Full guidance can be found here.
You must make a further check on a tenant if their permission to stay in the UK is time limited. Landlords or their agents can receive a fine (also known as a civil penalty) if they don’t do this.
You must make a further check either:
- just before the expiry date of your tenant’s right to stay in the UK
- within 12 months of your previous check
You won’t have to make a further check if your tenant doesn’t have any restrictions on their right to stay in the UK.
If your tenant doesn’t pass a further check
If you find that your tenant does not pass the original or subsequent checks then you must tell the Home Office. You might receive a civil penalty if you don’t if you find out that your tenant no longer has the right to rent or stay in the UK.
Landlords and agents can choose to evict tenants who do not have the right to remain in the UK if they want to. You must follow the rules for evicting tenants.
Where lodgers are concerned – you can choose to end your tenancy agreement with them. How much notice you give your lodger will depend on which type of tenancy they have with you.
The legal duty for carrying out Right To Rent checks rests with landlords. However, landlords can ask any agents that manage or let their property to carry out the check for them. If you are opting for this route then you should ensure that you have this agreement in writing. Letting agents are also advised to ensure that they have covered this understanding and agreement in writing to carry out the checks on a landlord’s behalf. Letting agents should carry out all of the steps above, including retaining copies of the documentation checked.
This is a contentious issue. The Deregulation Act made it easier for tenants to sub-let a rental property. Technically, under Right To Rent if a tenant sub-lets the property without you knowing, then they are responsible for carrying out checks on any sub-tenants. Under this scenario they will then be liable for any civil penalties if they don’t carry out the checks correctly.
Phew…so as you can see, Right To Rent certainly adds a fair bit of extra administration work to the mix for landlords and agents. This is in addition to the new compliance laws introduced 1st October 2015 in England and Wales and 1st December 2015 in Scotland regarding the fitting of CO alarms – see my November blog post here. However as a responsible landlord or letting agent, with a little bit of careful forward planning now Right To Rent needn’t be a nightmare.
To help our clients further, LME Move is able to assist landlords and agents with the delivery of a Right To Rent administrative facility to ease the pain. Feel free to contact myself or one of our team if you’d like further information / advice.
Wishing you all a peaceful festive season and until 2016!
Sue Clear is Property Compliance Executive at LME Move.
Got a question for Sue or need further Right To Rent advice?
Get in touch with Sue and her colleagues here