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Residential Landlords: Don’t Fall Foul of Right to Rent!

What do residential landlords need to know about before renting out their property? One thing that every landlord should be aware of is the “Right to Rent” regime which we blogged about earlier this year. In basic terms, the regime requires landlords to carry out checks to ensure that they are not renting their property to a disqualified person (an illegal immigrant).

However, from 1 December 2016, landlords will commit a criminal offence if they knowingly rent out their property to a disqualified person, or have reasonable cause to believe that the tenant is a disqualified person. The offence attracts an unlimited fine (previously a maximum fine of £3000) and up to 5 years in prison.

A landlord may have a defence where it takes reasonable steps to terminate the tenancy within a reasonable time of becoming aware of the true status of their tenant. The Home Office has issued guidance for the courts when deciding whether or not the defence applies.  The guidance states that a “reasonable time” is the period needed by the landlord to end the tenancy by mutual agreement with the tenant or by taking steps to end it.  As for the “reasonable steps” a landlord needs to take, it will depend upon the nature of the tenancy agreement and the relevant statutory provisions that apply, but a court should take into account all of the circumstances.

If the landlord does not have a right to evict the tenant, there is now a statutory right to terminate the tenancy following receipt of a notice from the Secretary of State that the tenant is a disqualified person. The landlord can serve a prescribed form of notice on the tenant which will allow the landlord to recover possession of the property as if it were an order of the High Court. This will make it easier for landlords to legally evict disqualified persons. However, it goes without saying that a landlord risks criminal liability if it receives one of these notices from the Secretary of State and doesn’t take steps to evict the tenant within a reasonable time.

It remains to be seen how the courts will apply these sanctions in practice, but a relatively minor fine will probably be imposed on most landlords who fall foul of the regime, particularly where the breach has been inadvertent. In more serious cases involving repeat offenders or landlords who deliberately ignore the regime, tougher punishments including imprisonment will be on the cards.