Right to rent checks, introduced on 1st February this year following a pilot scheme in the West Midlands, have now been in force across England for several months.
The legislation requires all landlords to make sure that prospective tenants are in the country legally before the commencement of a tenancy. If you use a self-regulated agent to let your property, they are likely to carry out this check on your behalf, but you should ask them to confirm it in writing. If you let and manage yourself, be aware that the rules apply to lodgers and sub-tenants as well – anyone living in the property, even if they’re not named on the tenancy agreement or the let does not have a written agreement (1).
You need to check that the tenant’s documents are originals, belong to them, and that expiry dates for visas and work permits, etc., have not expired. If their permission to be in the UK is time limited, you must review the tenant’s position before the expiry date. The checks tend to take between 20 minutes and an hour to complete, and the Home Office has a free helpline and online checking system (2) if you are not sure whether the documentation you have been given is valid.
If you fail to make the checks, or to make them properly, and are found to be letting a home to a tenant who is here illegally, you can be fined £1,000 for a first offence and £3,000 thereafter. So it is vital you not only understand what you need to do, but are also aware of potential issues you could come across. Needless to say, as with all lettings administration, you should keep a clear record of everything you have done, in case of any investigation.
Difficulties in implementing the Right to Rent checks
Type of identification you are given by the tenant.
The most obvious and common proof of identity you’re likely to come across is a UK or EU passport, but there are numerous visas, work permits, foreign passports and other valid proof of a person’s right to be in the country that will almost certainly be unfamiliar to you.
According to research by the Residential Landlords Association, carried out prior to the checks being introduced, 44% of landlords said they would only accept documentation that was familiar to them (3). The issue there is that it has the potential to be seen as discrimination, for example, not renting to an EU citizen who has every right to live and work in the UK, simply because you are unfamiliar with their identification, or turning away a UK national who does not have a passport.
What if your tenant starts sub-letting?
Although it is their responsibility to perform right to rent checks on sub-tenants themselves, it’s advisable to get it in writing that you have not offered to make the checks on their behalf. This will ensure that your tenant cannot argue there was a verbal agreement that they wouldn’t be responsible. If they sub-let without your knowledge, you will not be held liable for the sub-tenant (4).
Timing issues, especially with Visa’s
Because the checks must be carried out within 28 days of the start of the tenancy, if you’re letting to overseas nationals on a time-limited visa (often students), who tend to arrange accommodation several months in advance, you may have to make the checks twice. You will need to have made the checks in order to confirm the tenancy, then will have to re-do them within that 4-week window in order to satisfy the current legislation requirements. If you have a number of this type of let, repeating the checks could be onerous, certainly from a time perspective. ARLA is currently working with the Home Office to try to find a practical solution. (5)
The future of Right to Rent legislation
One surprising thing about this legislation is that if a landlord or an agent discovers someone is here illegally, there is no requirement for them to report the individual to the Home Office. That means the prospective tenant is free to simply carry on trying to find accommodation and increases the likelihood of them ending up in cheap, sub-standard accommodation, with an unscrupulous landlord who is flouting the law.
All of this highlights how important it is to keep up to date with lettings legals and the extent to which a single piece of legislation can increase the amount of time spent on administrating a let. Once again, landlords who currently let and manage themselves face a big decision about whether to continue. If you use an agent that is a member of ARLA, NALS or RICS, of course there is a fee for their service, but you have the peace of mind that they take on the responsibility for the majority of the legal aspects of the let. That can save you a lot of time and almost negate the chance of you falling foul of the law.
Related Blog on Mortgage Advice Bureau: How will the new Right to Rent checks affect landlords 4th December 2015.
This information has been provided by our partner Mortgage Advice Bureau. For more information relating to Mortgages or for Mortgage Advice please visit Mortgage Advice Bureau.