From 1 February 2016 all landlords of privately rented accommodation in England must check, or arrange for an agent to check, that new tenants and occupiers have the right to be in the UK before letting the property to them. Where the tenant is a non-EEA national with a time limit on their stay in the UK, the landlord / agent must also make repeat checks. Civil penalties will apply if the checks or repeat checks are not done.
This new scheme is one of a host of changes brought about by the Immigration Act 2014 designed to make it harder for illegal migrants to stay in the UK and is the national roll out of a pilot scheme for landlords / agents in the West Midlands. Employers and banks already have to check the immigration status of individuals before allowing them to start work or open a new current account respectively.
Landlords / agents will have to request original documents from prospective (and, in some cases, actual) tenants showing their entitlement to be in the UK. Only particular original documents are acceptable. Photocopies are unacceptable.
The landlord / agent will have to view those documents in the presence of the prospective tenant or via live video link, take and date photocopies and keep the copies for 12 months after the tenancy has ended.
In fact, it goes further than this. The checks have to be carried out on the prescribed documents of all adults with a right to occupy the premises. If they are not named in the tenancy agreement, however, the checks will only be required if reasonable enquiries revealed or should have revealed the existence of such occupiers.
Can I avoid liability?
Landlords / agents must be proactive. It is not enough simply to include in tenancy agreements a prohibition against occupation by persons who do not have leave to enter or remain in the UK.
If the landlords / agents knew when entering into the tenancy agreement that the prohibition would be breached, or if they failed to carry out the prescribed document checks, they will have no defence to liability for a civil penalty. Shutting one’s eyes is not an option.
That said, landlords / agents are not expected to have the skill and knowledge of UK immigration officers. Some forgeries are very professional and difficult to spot. There is room for honest mistakes without necessarily incurring a civil penalty.
Checks will need to be done before offering a tenancy agreement. If a prospective occupier is overseas, however, and wishes to arrange accommodation for work or study in the UK in advance of their arrival, landlords / agents are allowed to check a person’s right to rent before taking up occupation of the property, rather than before the start of the tenancy agreement.
Where initial checks show that the occupier has time-limited leave to remain in the UK which expires during the tenancy, repeat checks will be required in those cases after a tenancy has been granted. This is in order to help tackle the problem of “overstaying.”
Landlords / agents should check documents for all adults who will occupy residential premises. It is widely known that excluding persons of a particular nationality or ethnic group in the provision of accommodation is unlawful discrimination. It is also possible to discriminate indirectly, for example, by rejecting a prospective tenant on the basis that they have only a limited right to be in the UK.
Specifically, the temptation may be to rent to persons who have ready access to documents, such as a British passport, which are easy to check, and to exclude prospective tenants whose immigration status is more complicated or whose documents are with the Home Office. Prudent landlords / agents will resist this temptation and will seek advice from the Landlords Checking Service where the prospective tenant's documents are with the Home Office.
What if there are potential problems with the documents?
If a prospective tenant cannot produce satisfactory documents, or if the documents are regarded by the landlord / agent as a possible forgery, they will be expected not to let to that individual. In those circumstances, there is no obligation to report to the Home Office provided that the landlord has not allowed the prospective tenant into occupation.
If repeat checks show that the occupier no longer has the right to rent in the UK, however, landlords /agents will be required to report this to the Home Office as soon as reasonably practicable. In these circumstances, however, they are not obliged to evict the occupier.
What happens if things go wrong?
The lease will still be enforceable, e.g. for rent arrears. However, those who fail to carry out document checks face a civil penalty of up to £3,000 in respect of each disqualified person allowed to occupy premises as their only or main home, not to mention the trouble and expense of dealing with enforcement action by the Home Office. The cost of multiple penalties can be significant and it is not a good idea to be on the Home Office radar.
Who pays the civil penalty?
Unless the letting agent has accepted responsibility under a written agreement with the landlord, the landlord is liable for the civil penalty under the scheme.
That is, the landlord at the time of the contravention. This may not be the same person who was the landlord at the time of entering into the tenancy agreement if the contravention is a failure to carry out repeat checks and the landlord has changed in the meantime.
Similarly, where there is a superior landlord in relation to the tenancy agreement, the liability for the civil penalty could rest with the superior landlord or the landlord depending upon what has been agreed between them in writing, unless there is a written agreement under which a letting agent has accepted responsibility.
Are there any exclusions?
In principle, all residential tenancy agreements are covered by the new scheme including sub-lets and licences. There is no distinction between types of property (farm houses are covered in the same way as an inner city block of flats), between sizes of property (even a single room occupied by a lodger is covered), or between types of landlord (the scheme applies both to businesses and to individuals).
However, landlords / agents will not need to check a tenant’s right to rent in the UK for residential tenancy agreements entered into before the scheme came into force.
There is also a narrow exclusion in relation to residential tenancy agreements entered into after the scheme came into force. This applies where the agreement is between the same parties as under the original agreement and the tenant has always had a right of occupation of the premises leased under the renewed agreement since entering into the original agreement, i.e. no break in the tenant’s right to occupy.
Children under the age of 18 are excluded. Certain types of accommodation are also excluded, for example, care homes, tied accommodation, specified student accommodation and holiday lets at least in case of bookings under 3 months. Long leases (over 7 years) are generally excluded as well.
Any other changes?
In parallel with the national roll out on 1 February 2016 of the scheme for landlords of privately rented accommodation and letting agents under the Immigration Act 2014, and the creation of civil penalties if things go wrong, an Immigration Bill is currently going through Parliament which will tighten things further in due course.
Specifically, it will be a criminal offence, which could see imprisonment of up to five years for landlords / agents, if they know or have reasonable grounds to believe that their property is occupied by a person who does not have the right to rent in the UK.
There will also be new procedures for swifter eviction of tenants without a current right to rent in the UK triggered by a notice from the Home Office. The landlord will then be expected to take action to evict the tenant.
For more information please contact Andrew Dekany - Partner, Employment and Immigration.