Welcome to the second of a three-part series on issues landlords in the residential sector need to consider.
Assured shorthold tenancies (ASTs), in essence, allow a landlord to charge whatever rent can be agreed in the open market and to obtain possession provided that the fixed term has expired or there is a landlord’s option to break and the tenant has been allowed to stay for a minimum of six months.
However, recent developments have increased the administrative burden on landlords.
Residential landlords and their agents should start planning ahead for the new requirement to conduct pre-letting checks into the immigration status of all proposed residential occupiers. In short, if residential occupiers cannot produce satisfactory evidence of their right to rent in the UK, landlords should not rent to them. Landlords who rent to illegal migrants without carrying out the checks will be liable to fines of up to £3,000 per illegal occupier. It is expected that this obligation on landlords will be rolled out in phases across the UK during 2015.
Final details of how the new requirements will work in practice need to be finalised
Part 3 (not yet in force) of the Immigration Act 2014 (“the 2014”) Act prohibits landlords from allowing adult illegal migrants to occupy premises under a “residential tenancy agreement”. Details may change following the results of a pilot which is being carried out in England. Landlords can, however, avoid paying the fine for contravention by demonstrating either that the prohibition does not apply or that prescribed checks were undertaken.
So what does it mean in practice?
The prohibition only applies to “residential tenancy agreements”, that is letting arrangements where:-
- a rent is payable;
- the premises are occupied as a person’s main or only home and
- the arrangement is not excluded under Schedule 3 of the 2014 Act.
Subject to the above, the new checks (and prohibition) apply to all types of residential letting arrangements including assured shorthold tenancies, leases, licences and sub-tenancies.
When applicable, landlords will be expected to establish within 28 days before the tenancy agreement is entered into that the proposed tenant and all other adult occupiers are either British, European Economic Area or Swiss nationals or have a “right to rent”- i.e., the occupiers’ immigration statuses are such that they have a right to live in the UK (for the moment at least).
The legislation contains a list of documents that the landlord can accept as proof of immigration status. The landlord will have to see the original document in the presence of the occupier and then copy or record the contents of the documents, noting the date when the check was taken.
In general terms, the checks will not be required for:-
- student accommodation (including halls of residence);
- accommodation in hospitals, hospices, care homes, hostels and refuges;
- social housing (where the immigration status of prospective occupants is already checked);
- accommodation provided by an employer to an employee in connection with their employment and
- lettings entered into for seven years or more (which do not contain a break during the first seven years).
Who needs to comply?
- “landlords” in the broad sense of the word, i.e. anyone renting out accommodation for people to live in anywhere in the UK. This includes subletting, serviced accommodation and sharing arrangements;
- letting agents, managing agents, and relocation agents who agree to carry out the checks on behalf of the “landlord”. Responsibility for completing the checks must be transferred to and accepted by the agent in writing;
- providers of accommodation to paying guests who use the accommodation as their main residence. Potentially, this could catch owners of hotels, guest houses and bed and breakfast providers.
Fines of up to £3,000 per illegal migrant can be levied. The actual penalty level is likely to be determined on a case by case basis depending on certain factors including whether:-
- a penalty has been levied before and
- whether there are multiple illegal immigrants and whether the person breaking the rules is a private individual renting out their home.
The moral of the story? Check and check again. Better to be safe than sorry. In our next article, we will highlight some practical top tips to help you avoid falling foul of the law.
If you missed the first blog in the series you can find it here.
In the meantime if you need legal advice as a tenant or landlord our expert team of property lawyers at Slater and Gordon can help. Call us on freephone 0800 916 9083 or contact us online and we will call you.