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Residential lettings: Ten things that landlords should know about “right to rent”

1. New obligation to check tenants’ residential status

New checks are being phased in which require landlords to verify the immigration status of prospective occupiers before granting a residential tenancy or risk a penalty of up to £3,000 for each breach.

2. Pilot scheme started 1 December 2014 in the West Midlands

On 1 December 2014 a pilot scheme began in Birmingham, Walsall, Sandwell, Dudley and Wolverhampton.  The new rules are expected to apply more widely from sometime in 2015 after the Home Office has evaluated the pilot.

3.  Will the scheme apply to all residential tenancies?

The scheme will apply to all residential tenancy and other agreements where a rent is payable and the premises are occupied as a person’s main or only home unless the letting is excluded (see below).  The scheme will capture assured shorthold tenancies, leases, licences and sub-leases.

4. What are the exclusions?

A range of property types are excluded from the provisions including: social housing, care homes, hospitals, hospices and other healthcare accommodation, hostels and refuges, local authority and asylum-seekers’ accommodation, mobile homes and accommodation tied to employment.

Institutional student accommodation (i.e. owned or managed by an educational establishment) is exempt. All halls of residence are also exempt whether or not they are owned by an institution or a private investor.  This is to avoid duplication of checks which are done for students by the educational establishments.  Other privately-owned accommodation is not exempt.

5. Are there any exceptions for long leases?

Yes.  Leases for a term of seven years or more which do not have a right of termination before seven years have expired are excepted from the new rules.  All other residential leases (including assured shorthold tenancies) will be caught.

6. Who carries out the checks?

It is expected that most landlords will delegate the checks to letting agents as agents can be liable instead of the landlord if the agent has accepted responsibility for complying with the scheme on behalf of the landlord.

7. What do the checks reveal?

Checking a tenant’s immigration status will reveal whether they have a “right to rent”.  People will fall into three broad categories:

  • those with an unlimited right to rent;
  • those with a time-limited right to rent; and
  • those with no right to rent at all.

Where tenants have a time-limited right to rent, a landlord has to conduct follow-up checks every 12 months or on expiry of the person’s permission to be in the UK, whichever is the later.  Tenants do not have a right to rent if either: (a) they do not have permission to enter or remain in the UK or (b) the terms of any permission prohibit occupation of the premises.

8. How to carry out the checks

The Home Office has provided an online checking tool which indicates whether a property is affected by the scheme and provides information on how to carry out a check. Where tenants do not have their documents, landlords can request a check through the Home Office by using an online form. The checking service will then provide a yes/no answer within 2 working days.  In most cases, the Home Office considers that submitting a request will only take a matter of minutes.

9. What happens on repeat lettings?

As a repeat letting to the same tenant will still be a new letting, landlords or their agents should check the immigration status at the beginning of each new lease.  This appears to apply even where the tenant has an unlimited right to rent on the first letting; there is nothing in the Home Office guidance to suggest that the initial check will suffice for subsequent lettings.  It is to be hoped that practical issues such as these will be flushed out in the pilot scheme and addressed in the final guidance.

10. Where can I find out more?